18 March 2013

From Organic Design
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The first haircut goes to Cyprus!

On Saturday, Cypriot deposit-holders got a nasty surprise when they learned that EU ministers and the IMF agreed to massive bailout plan for Cyprus, which includes a one-time tax of 9.9% on Cypriot bank deposits that exceed 100,000 euros, as well as a tax of 6.75% on smaller deposits.

The unprecedented decision, which appears to punish ordinary citizens for failures in the financial system, has sparked panic and protests as people queued up at ATM machines to rescue their savings. Many cash machines ran out of banknotes because of the panic withdrawals.

It would be hard to over-emphasize how significant the Cyprus situation is. The EU demonstrated under no uncertain circumstances that they will destroy the rule of law to maintain their own power. It was a recognition of tyranny that many of us have always assumed was the case but yesterday became reality.

Bitcoin jumped up a few dollars going over USD $50 shortly after the Cyprus haircut occurred showing that a significant loss of faith in the fiat currencies has likely been caused by the haircut (edit: now two weeks after the haircut, Bitcoin is over $90!). Expect gold to go up shortly too and silver even more as it's unnaturally far below it's usual 1/16th of gold's value.

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