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Cyprus banks may collapse on Monday

Mar 22, 2013

Here is a good article that confirms what I have been writing all week. The only positive thing about this is that we in America will not be the first ones to be hit. Whatever happens in Cyprus will spread to Greece, Italy, Spain, and Portugal. By that time, the EU itself will be in trouble, and only then the US banks will feel its full effects. So watch the news, and don't be caught by surprise.

http://www.naturalnews.com/039588_Cyprus_banking_crisis_collapse.html

(NaturalNews) As you may have suspected, there's far more to the Cyprus bank  crisis story than meets the eye. It turns out the shutdown of Cypriot banks has  caused a large-scale financial shutdown of the  Russian government which uses Cyprus banks for most transactions....

USA  Today reports, "If it does not find a way by Monday, the European Central  Bank said it will cut off emergency support to the banks, letting them collapse.  That would throw the country into financial chaos and, ultimately, cause it to  leave the eurozone, with unpredictable consequences for the  region."
Until then, the banks remain closed, and everybody knows the  minute they open, every account holder will immediately transfer their money  out of the banks, causing a near-instant bank run and a collapse.

The worry across the eurozone now is that this imminent bank collapse will  trigger account holders in Greece to start taking their money out of the bank,  too. The Greek banking system is already in such sad shape that it only takes a  very small percentage of account holders withdrawing their funds -- perhaps 5%  or so -- to topple Greek banks. That's because the banks  are roughly 95% leveraged with fractional reserve accounts and complex  debt instruments.

Once bank runs begin in Greece, they will spread across  the EU. Fear will kick in everywhere and depositors will run on the banks in  Spain, Italy and even the UK. Germany is arguably in the safest position to  defend against bank runs, but even its banks are unwisely leveraged beyond  reasonable ratios....

 

 


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Dr. Stephen Jones


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