Cyprus

[SK in CV]

[quote=paramount]So this is not a case of: Politicians stealing citizens money and handing it over to the banksters?

Also, is this really a deflationary move? They could have instead just printed up more money, right?[/quote]

No, Cyprus doesn’t have its own money to print.

[paramount]

[quote=SK in CV][quote=paramount]So this is not a case of: Politicians stealing citizens money and handing it over to the banksters?

Also, is this really a deflationary move? They could have instead just printed up more money, right?[/quote]

No, Cyprus doesn’t have its own money to print.[/quote]

I meant the ECB since Cyprus is part of the EU.

[patb]

german taxpayers won’t pay for the bailout.

[livinincali]

[quote=The-Shoveler]Watching this unfold is like watching that dumb and dumber movie.

I doubt it will have much effect for our markets at this point, Ben and his buddies in Japan have their targets for the markets and I think they really do have the ability to hit them.

They cannot afford not to.

I think that is key IMO.[/quote]

Japan has been trying to push their market higher for 20 years. Ben Bernanke didn’t stop the market from dropping more than 50% in 2008. The people that are pushing the market higher are those that now naively believe in a power that Bernanke doesn’t really have. They’ll eventually get slaughtered in the popping of the bubble like they always do. Might need to go a lot higher first, I can’t tell you when it will happen, just that it will. The only sure thing from the fed is that they can always create a bubble somewhere and they never see it until after the fact.

[The-Shoveler]

I respectfully disagree, while they could not stop the 50% drop they did prevent it from turning into a depression and they did know what they were doing and what would happen IMO.
I say no big crash until everyone is feeling really over confident and inflation brings local municipalities back above water (not going BK left and right) we are not there yet (IMHO anyway).

Also until this year Japan was cratering more to their older population that was transitioning to fixed income and would not tolerate ANY inflation.
That seems to have changed in a big way.

The move to $10.00 minimum wage is just the start, I think we will be at $15 dollars before 2020.

[spdrun]

You’re assuming that we’re not in a high period during a depression right now. Look at what’s going on in Europe (not just Cyprus, but unemployment and GDP contraction).

Between sequestration and Europe, I suspect we’ll feel the pinch too in the next 2-3 months, even if it’s just a 5-10% pullback. Not sure if a $10 minimum wage will do a lot other than making employers more reluctant to hire — it’s cheaper to have one employee working longer hours (even at double time) than having two.

If the minimum wage goes to $10, it should be combined with mandatory 4 weeks of vacation plus higher overtime rates. 2x time for 40+ hr per week. 4x time for 55+. 8x time for 70+. 16x time for 85+.

Both encourage efficiency and spread the wealth around.

[livinincali]

[quote=The-Shoveler]I respectfully disagree, while they could not stop the 50% drop they did prevent it from turning into a depression and they did know what they were doing and what would happen IMO.
I say no big crash until everyone is feeling really over confident and inflation brings local municipalities back above water (not going BK left and right) we are not there yet (IMHO anyway).
[/quote]

How do you know that they actually prevented a depression rather than just postponing it and potentially making the next downturn worse. At this point most people would agree that fed policy was a significant driver in the housing bubble and that policy was put in place to avoid the pain of the 2000 stock market bubble popping.

Every time we’ve gone into recession in the past 20 years it’s worse than the previous one and the fed does more and more policy accommodation. What are they going to do the next time we inevitably go into recession. I really think we’re all just hoping we don’t go into recession soon because we all know there’s nothing much the fed or congress can do to bail us out.

[The-Shoveler]

I would say, yea really minimum wage needs to be about $15 right now (that would just be making up for inflation which is not tracked), it needs to be $15 and then tied to asset inflation as should all wages.
But I think it will be a slow transition.

Yea I could see a small pull back, but not a major correction until inflation has a chance to take hold.
The fed cannot continue to bail out the local gov’s
and the local Gov’s need inflation to bring the tax base up.

[spdrun]

Local governments both in CA, NY, and NJ are over-bloated. How about firing half their employees without pension?

Basically, that’s what Chris Christie is doing in NJ in a figurative sense — reigning in the local governments while NOT allowing them to increase taxes much. Harsh medicine but 100% needed.

Lastly, local governments have gone bankrupt even during inflationary times. Remember the 70s? “FORD TO CITY: DROP DEAD – President vows he’ll veto any bailout.” (For NYC.)

[The-Shoveler]

I think that was a special case, but even then I think the inflation eventually made them whole.
As long as you limit the pension to only say 3% inflation adjustment, 7-9 percent inflation will make these issues disappear very fast.

[spdrun]

Why should we support parasites instead of giving them a kick out the door? Too many cops already. Same goes for the prison industry. Legalize drugs, let the druggies kill themselves, and save 50% on police, court, and incarceration costs.

We pay for teachers who are accused of misconduct to sit at desk jobs twiddling their thumbs, since it’s too hard to fire them. That needs to change as well. The solution is bitter medicine for the overpaid workers, not dicking everyone over via inflation.

Remenber: public SERVANT. Not public PARASITE.

[Jazzman]

[quote=patb]german taxpayers won’t pay for the bailout.[/quote]
This is certainly one aspect of it, and the IMF seems to have been pushing hardest for this levy. This has been building for awhile, with large protests against austerity that have not grabbed media attention prior to now. Cyprus depends on tourism, foreign retirees and it’s banking sector. It is a tax haven. So it’s not just a banking sector bailout, since the economy is affected. The route of the problem was exposure to Greek debt. Cyprus is divided into the Greek Cypriot and Turkish Cypriot (occupied) side. The Greek Cypriots have always maintained strong links with Greece.

Russians account for nearly 50% of deposits, and Brits make up a large number of retirees due to favorable tax treatment. I believe income tax used to be on a remittance basis, not on world wide income, and there is no CGT. There is money laundering, probably on a big scale, so a clean up is the quid pro quo for the bailout. We’ve seen big anti money laundering and tax evasion tactics by European and US powers. The message is if you want the benefits of club membership, play by the rules. I don’t think you would get away with this levy in the PIGS countries. Cyprus has always been bullied.

[The-Shoveler]

Assuming you have more debt and leveraged assets than cash (ie.. you’re an average American).
Moderate inflation is not so bad. (my car I bought new was worth more the day I paid it off three years later than when I drove it off the lot in 1973).

[spdrun]

And that’s the problem. Our economy is based on indebtedness to consume mostly unnecessary stuff (made by people yellower than us these days) and working 50 hour weeks with 2 weeks of vacation per year. Our goal should be stability and savings, not constant production and purchase of unneeded goods for the sake of “growth” numbers — the environmental effects of this are deleterious.

Inflation just keeps the masses on the treadmill like good little fucking hamsters. Why not let housing prices drop to levels where a family can afford to live on a single average income in a decent area, for example? Employment should be a means of people supporting themselves, not an end in and of itself.

I’m typing this on a 6 year old computer that still works fine, BTW. My car is closer to 30 years old…

[The-Shoveler]

Most Americans live in the world I described.

[Author]

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