Silver Jumps on News of Cyprus Bailout Depositors Levy

Silver March 17th 2013


As silver jumps, and the Eur/Usd collapses, an act that does not have a modern precedence, plays out in Cyprus.  It appears that depositors will be paying for a bank bailout via one time levy against all depositors in the country.  The original proposal was for a 6.75% levy on depositors that have <€100K, and 9.9% levy on depositors with >€100K.  This original proposal appeared to be not palatable for the citizens of Cyprus and an alternative deal is being floated:

“According to an official familiar with the plan, deposits up to €100,000 would take a loss of under 5%; from €100,000 to €500,000 under 10%; and over €500,000 about 13%.” (See: UPDATE: Cyprus Government Races to Win Backing for Unpopular Bailout Deal for more details)

EurUsd March 17th 2013


The initial reaction is a Eur/Usd collapse of almost 150 pips.  As depositors in other EuroZone countries that are running into similar difficultly will likely react by withdrawing money from the banking systems as similar depositor levy stipulations on future bailouts are much more likely.

Just to complete the picture of what the EuroZone is facings is the startling Youth Unemployment %:

Europe Youth Unemployment 2013