Eric King:  “Jim, this is a quote from your March 20th KWN interview”:

“Cyprus cannot, will not, absolutely must not leave the euro.  They know that quite well.  So the break of the euro market down into the 1.28 area must have sent shock waves through decision-makers in euro land.  Cyprus must be rescued because they cannot be allowed to leave the euro.”

Again, you said that 5 days ago and that was incredibly accurate.”

Sinclair:  “Clearly Cyprus remains within the euro.  That is a victory for the euro, not a defeat.  What it means is Cyprus’ threat to leave the euro was the effective tool to bring what is now the heads of an agreement, but not particulars, whereby Cyprus remains in the euro.

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“No funds flowed from depositors to bail out funding.  So this was not a ‘bail-in’ in any sense.  Therefore QE is alive and well.

It’s clear that what we have here is an agreement as the heads of an agreement, but not an agreement as to how one gets to those heads.  This was an agreement on where they want to go and will go, but no agreement on exactly how they are going to get there.   

So we have a prolonged discussion on the rescue before bank closures.  During this entire time one wonders was money really drained from deposits before the official shutdown of the banking system in Cyprus?  There were also no parameters given on how they would decide on which bank was to be saved, and on how they would decide on which bank would be sacrificed in the future.  

The main takeaway from this is it is a victory because Cyprus remains in the euro.  The question is, if you have any deposits in Europe or the United States, are your deposits above $250,000 for the multiple banks you have it in in fact guaranteed?

Many people have had great success in life in terms of accumulation of money, and it sits in banks and brokerage firms with comfort from an FDIC guarantee.  However, if that brokerage firm or bank goes broke, what are the parameters that say that the amounts above the guarantee will in fact be made whole?

Up to now everybody has been made whole.  Up to now every dollar in banks has been returned through QE, bailouts, and through TARP.  So, the most important thing regarding what’s taken place here is that large bank deposits are in limbo as to whether or not above the minimums that money will be returned.  In Cyprus, the answer is in one bank no, it’s not being returned.  The other banks, possibly.”

Eric King:  “Today Farage said this has created bank runs in southern Europe.”

Sinclair:  “Let’s just suggest that an entity has a significant amount of money in two or three different banks well above the basic guarantee.  That entity is going look to move that money out of the banks and into something solid.  The reason for that is they don’t want anybody taking all of that money, or even a haircut of it because the banks in fact have not run their business correctly.

What happened today is one bank was not saved because it was ‘too crooked to save.’  Now, how can you rely on ‘too big to fail’ when we know all of the big banks are crooked?  How do we know that ‘too big to fail’ cannot be changed to ‘too crooked to save?’”

Eric King;  “What does all of this mean going forward?”

Sinclair:  “Because Cyprus remained in the euro and has not become a colony of Russia, the takeaway from this is QE lives and breathes, operates, and will still lead going forward.  And that no funds were transferred from a depositor to the 10 billion euro agreement that is to be provided.  Also, for people who have $10 million or more in bank accounts they are clearly going to have to get a new pair of shorts.”

***IMPORTANT - There was a delay due to circumstances outside of KWN in the release of the brand new & extraordinary audio interview with former US Treasury Official Dr. Paul Craig Roberts regarding the ongoing crisis in Cyprus and much more, but it is available now and you can listen to it by CLICKING HERE. 

© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

The interviews with Dr. Paul Craig Roberts, Gerald Celente, Michael Pento, Nigel Farage, Eric Sprott, Egon von Greyerz, Rob Arnott, James Turk, Jim Sinclair, and Andrew Maguire are available now.  Also, be sure to listen to the other recent KWN interviews which included Marc Faber, Felix Zulauf and Art Cashin by CLICKING HERE.

Eric King

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© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast,

rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

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