Wednesday 27 March 2013

The Euro Bezzle: why Cyprus banks won't open yet

J K Galbraith one of the few economists worth reading categorised bankers loss progression thus:



First come the losses and the stupidities committed by bankers working for their own self-interest. Then come the rogue traders, unable to ‘fess up on market bets gone wrong. The last to arrive is the bezzle.
That was John Kenneth Galbraith’s word for the outright frauds – the “inventory of undiscovered embezzlement” – that are built up when markets are good. These can be kept hidden for as long as the lies hold up.
The perpetrators are in no hurry to be uncovered, as they face public wrath, not to mention the possibility of many years behind bars. But truth will out.

This is what is going on in Cyprus right now. As I wrote yesterday because of this fraud no one has any idea how much money is left in Cyprus banks. The Cyprus government's cronies were tipped off weeks ago and got their money out then with the help of the bezzle. At the same time a huge inflow of funds into Jersey banks and othe tax havens. There have even been reports of UK depositors moving their funds off shore. This is now going to accelerate.

It also explains why an independent audit of Spanish banks has been resisted by the Spanish government. They know if you go into a Spanish bank traders office you are likely to find a drawer stuffed full of duff deals that are not shown on the bank's books.

Things are going to get a whole lot worse. My advice is get your funds out of Euroland and its wholly owned subsiduary UK plc. Keep your deposits less than 100000€, split it between a number of banks. The Farage educational trust is domiciled in the IOM. I recommend this prudent move to all UKIP members.

I will not be surprised if Cyprus bank openings are further delayed. Pity the poor soul who has just transferred his funds to a Cyprus bank to fund the purchase of his retirement home. They will end up with half their money at best plus no house. That is the benefit the EU brings to the ordinary citizen.

2 comments:

The Journalist said...

Of course, good point, there has been so much theft, in both banking and the state sector, this is much of the problem, we now see the same situation in government offices such as the DVLA private come state partnerships, being funded by the tax payer to the benefit of stake holders, Greece was the same, this road only heads in one direction as we have all seen. by these examples.

peter said...

Good to see there's a blog that allows democratic uncensored comments. unlike some of pro-Tory
come Labour type blogs.