Jim Sinclair has been well ahead of the curve on what the EU/IMF’s confiscation of Cyprus bank deposits means to especially the ex-KGB Russians who are saving their money in Cyprus.
To get Sinclair’s insight, read or listen to the interviews he did with King World News in the past few days.
Sinclair – One of the Most Important Events in History & Gold
Sinclair – All Hell Is Breaking Loose After Cyprus Catastrophe
Sinclair – Cyprus Disaster Is Much Bigger Than Being Reported
For example, Sinclair said to Eric King in his first interview on the weekend that:
The wire reports on the Cyprus situation are working overtime to try to make the case that 80% of the deposits belong to the people of Cyprus, and only 20% of the deposits belong to the Russians. That’s absolutely false. After 1985, when the ‘Robber Barrons’ of Russia took over the general economics of Russia, that was the transformation from the KGB to private business. The primary place for exported Russian funds was Cyprus.
Now, there is one leader in the world that would be very dangerous to challenge and that is Putin of Russia….
What’s just happened is the IMF has backed up, lauded, supported, and publicized, as if it were a victory, the taking of 10% of what really turns out to be 80% of Russian ‘black money.’ Russian ‘black money’ is KGB money, now in business. The leader of Russia (Putin) was a former KGB official. Whose money do you think they have taken? This is the biggest mistake the IMF could possibly have ever made.
In the context of the above, the following article in the Financial Times today will make a lot more sense.
Sinclair reckons this is because Cyprus government officials are literally fearing for their lives if they go ahead and steal ex-KGB money.
More confirmation of Sinclair’s thesis comes from EPJ that is reporting that Russia Will Consider Restructuring its Loan to Cyprus. Cyprus taxpayers may have to pay higher interest rates on their loan from Russia. The Russians might want to get their money back this way.
Also see Bob Wenzel’s take on implications of the deposit confiscation on the public’s behaviour.
First, you will see many in these countries being reluctant to add new money to their current deposits. The mattress, gold, silver and bitcoins will be the new places to store money.
Second, at the first hint of intensifying crisis in any eurozone country, a move to pull money out of banks will be very swift. Thus, even if there is no immediate run on banks that does not mean the banking system is safe from bank runs in the future. Regardless of what happens at this point in Cyprus, even if the tax is killed, the situation is pretty close to the way Krugman calls it, although to be more accurate the neon sign the IMF and other bankster tools are flashing says, “be prepared to stage a run on your banks at anytime!”