UK Citizens Look To Withdraw Funds From EU Countries After Cypriot Decision

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The decision in Cyprus to rob depositors was always going to have a negative outcome. The following story from ZeroHedge should come as no surprise that worried UK expats are looking to move their funds away from countries that have perceived banking weaknesses. We clearly have entered a new era which can only have a positive outcome for precious metals as a way to preserve your wealth from confiscation.

UK’s deVere advisory group reports, “more and more expats in Spain, Italy, Portugal and Greece are now not unreasonably worried for their deposits in these countries,” and are seeing a “surge” in the number of British expats seeking advice about moving funds out of eurozone’s most troubled economies. As EUBusiness reports, “Whether the institutions like it and accept it or not, there is a real risk of a major deposit flight from these countries as people feel their accounts could be plundered next.” It is hardly surprising obviously (as we noted earlier the bid in German bunds) but we fear this escalation in cash exodus from the periphery will increase the need for a broader EU capital control scheme sooner rather than later.

 

Via EUBusiness,

Independent financial advisory company deVere Group on Tuesday reported a “surge” in the number of British expats seeking advice about moving funds out of some of the eurozone’s most troubled economies following the Cyprus bailout deal.

According to deVere Group chief executive Nigel Green, “more and more expats in Spain, Italy, Portugal and Greece are now not unreasonably worried for their deposits in these countries.”

He added: “Over the last week, since the messy deal to bailout Cypriot banks began, our financial advisers in these areas have reported a significant surge in enquiries from expats who are looking to safeguard their funds in other jurisdictions which are perceived to be safer.

Whether the institutions like it and accept it or not, there is a real risk of a major deposit flight from these countries as people feel their accounts could be plundered next.”

Jeroen Dijsselbloem, who heads the Eurogroup of finance ministers, said the costs of bank recapitalisations should not fall on tax payers, but on bondholders, shareholders and, if necessary, uninsured deposit holders.

Source: ZeroHedge

Mexico To Restrict Cash Transactions

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Another country has joined the list for limiting cash transactions by it citizens. Mexico has signed into law, a ban on large cash transactions carrying a minimum penalty of 5 years in prison.

Large Cash Transactions Banned In Mexico … Outgoing Mexican President Felipe Calderon has signed into law a ban on large cash transactions. The ban will take effect in about 90 days and it is part of a broader effort to control monetary flows within the country. Under the law, a Specialized Unit in Financial Analysis operating within the Attorney General’s Office will be created to investigate financial operations “that are related to resources of unknown origin.” For real estate transactions, cash payments of more than a half million pesos ($38,750) will be forbidden and, for automobiles or items like jewelry, art, and lottery tickets, cash payments of more than 200,000 pesos ($15,500) will be forbidden. The law carries a minimum penalty of five years in prison. – Forbes

and as the Daily Bell put it

The power elite intends to lock down the world, it seems, in order to track every monetary transaction of any significance.

We wrote about this trend previously in “Spain Bans Cash.” Here’s an excerpt:

… As we have long predicted, the phony “sovereign debt” crisis in Europe is being used to justify all sorts of authoritarian measures.

…..

these national bans continually pressure more and more freedoms, including the freedom of shielding one’s wealth from prying eyes. And that’s just the point …

In the last 2 years the following countries have made similar restrictions.

Source: The Daily Bell

US: Businesses Stockpiling $1.4 Trillion in Cash For Impending Crisis Ahead

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Of late, US Corporations have done well, but this can be accounted for mainly by cutting costs and the fact that stocks have been more tempting than bonds. The amount of cash they are currently hoarding is just another sign that of a collapse of the Global Economy. It’s a very defensive position and clearly shows an inability to invest in the near term future.

US corporations are sitting on more cash than at any point since World War II. That’s without including banks. I’m only talking about nonfinancial corporations – the ones that sell goods and services and make the economy go. Those businesses hold $1.4 trillion. In absolute terms, that’s the most ever. In relative terms, it’s the most since World War II.

As investors, we can infer quite a bit from corporations’ inability (or unwillingness) to deploy their cash.

For one, it indicates that business have assumed a very defensive stance. Cash, of course, is a buffer against uncertainty – the uncertainty that business slows for any reason. Management wants a healthy cash reserve with which to pay the bills and remain liquid should anything unexpected happen. I think we can all agree that this is prudent, and a good business practice.

But $1.4 trillion? That tells me that businesses are not just a little jittery about the future. They’re prepared for an apocalypse.

If these businesses could conjure up even the most marginal of projects to earn a meager 1% return, they would generate $14 billion profit. Instead, they’re sitting on the cash and earning near zero for a guaranteed after-inflation loss.

It’s a bad omen that corporate management would forego a collective $14b per year. Clearly, by their judgment, the risk of investing in new projects outweighs the reward – the exact opposite of the conditions needed to produce healthy economic growth.

When will they use it?

Corporations aren’t going to sit on that cash forever. Eventually conditions will be such that they’ll either want to or have to invest in new projects.

Perhaps inflation will be the catalyst – corporations can tolerate losing 1.7% per year today. But if the inflation rate heats up to, say, 4%, you can bet that corps will be scrambling to deploy that now idle cash into whatever mediocre projects they can rustle up.

“When that happens, they have $1.4 trillion in cash ready to go. No need to negotiate a loan. No need to issue equity to raise funds. They have all the fuel they need. The gas tank is full.

So while the economy has plenty of problems, and stocks are a far better bet than bonds, lack of cash is not one of them.

Companies are ready to invest and grow. They just need an economic and political environment conducive to doing so.

Source: Testosteronepit

Cash Transaction In Italy To Be Banned Over €50 In Next 2-3 Years

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Back in January this year, Italy announced plans to limit cash transactions and also all credit card transaction had to be reported. Now it looks to push the limit even lower by possibly early next year the limit could be  as low as €50. Other countries have announced cash limits but none as draconian is this YET. How long before all cash transactions and we go full digital?

 Below is a google translate from Sudtirol News:

Rome – The technical Rome government wants to limit cash transactions in Italy.From 2013, citizens may pay amounts in excess of 50 euros only by credit or debit card. Dies hat der Ministerrat heute beschlossen. That the Council of Ministers decided today.

The measure is intended to reflect the money laundering and black money payments to clamp down.  Since July, the government has banned cash transactions over 1,000 euros.

Source: Suedtirolnews

Spain Bank’s Cash Transactions Above €2500

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Spain has joined the latest trend in countries clamping down on what its citizen’s are allowed to spend their money on. In an attempt to make sure the governement gets its cut from any transaction it can the limit that can be spent is now as little as €2500. Other countries in recent months that have imposed restrictions or attempt to move to a cashless society they can control are USA, Argentina, Italy, Greece, Ireland.

The Prime Minister, Mariano Rajoy, has announced on Wednesday that the plan to combat tax evasion on Friday approved the Cabinet prohibit the payment in cash transactions of over € 2,500 and n which at least involved a businessman professional.

During the control session the Government in the House of the Congress of Deputies and in response to a question about the tax amnesty made by the general coordinator of IU, Cayo Lara, the Prime Minister has revealed that those who violate the ban will face fines of 25% of the payment made in cash.

Source: globaleconomicanalysis

Argentina Limits Use Of Cash

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Another example of people being limited in the amount of cash they may use, this time from Argentina. The people are not only allowed to spend 10% of what was previously allowed. In the last few months have been increasing stories of either capital controls in various countries or banks refusing to handle cash. 

The government will restrict daily cash transactions to 1.000 Pesos (231 US dollars) per person, down from 10.000 Pesos, according to a statement in the Official Gazette. The measure affects activity in the stock and bond markets, investment funds and in the futures markets. Operations above the limit will have to be done through Argentine bank accounts that are authorized by the central bank.

“They are forcing a higher level of formality in the economy, as cash transactions allow more irregularities,” said Felipe Hernandez, an analyst at RBS Securities Inc. in Stamford, Connecticut. “This is in line with other measures to prevent money laundering, for which the government has been under a great deal of pressure.”

Previous related articles

Cashless Society – BOA Refuse To Accept Cash For Mortgage Payment

Cashless Society Coming Soon

Capital controls In Italy – Plans To Ban Cash Transaction Over €300.

Greece to Make All Large Cash Transactions Illegal

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