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Southern Copper Corp. Message Board

  • rogluther rogluther Mar 23, 2013 1:50 PM Flag

    Cyprus

    Some excerpts that you may find interesting and may provide a touch of insight into the “banking system”.

    “Most people would be surprised to learn that they are legally considered “creditors” of their banks rather than customers who have trusted the bank with their money for safekeeping, but that seems to be the case."

    "'According to Wikipedia In most legal systems, the funds deposited are no longer the property of the customer. The funds become the property of the bank, and the customer in turn receives an asset called a deposit account (a checking or savings account). That deposit account is a liability of the bank on the bank’s books and on its balance sheet. Because the bank is authorized by law to make loans up to a multiple of its reserves, the bank’s reserves that are on hand to satisfy payment of deposit liabilities amounts to only a fraction of the total which the bank is obligated to pay in satisfaction of its demand deposits. The bank gets the money. The depositor becomes only a CREDITOR with an IOU. The bank is not required to keep the deposits available for withdrawal but can lend them out, keeping only a “fraction” on reserve, following accepted fractional reserve banking principles. When too many CREDITORS come for their money at once, the result can be a run on the banks and bank failure.”

    "Felix Salmon wrote in Reuters of the initially proposed Cyprus confiscation:
    Meanwhile, people who deserve to lose money, won’t. If you lent money to Cyprus’s banks by buying their debt rather than by depositing money, you will suffer no losses at all. And if you lent money to the insolvent Cypriot government, then you too will be paid off at 100 cents on the euro. The big winner here is the ECB, which has extended a lot of credit to dubiously-solvent Cypriot banks and which is taking no losses at all."

    So ..... what do you think of the "banking system" now?

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    • Beware ..... you may be witness to the Camel sticking it's nose under the tent.

      "The Cyprus deal was previously called a one-time solution to debt problems, but investors grew cautious after Jeroen Dijsselbloem, who heads the Eurogroup of euro zone finance ministers, told Reuters and the Financial Times that the Cyprus bailout deal could be a NEW TEMPLET for resolving euro zone banking problems."

      It all boils down to the fact that when the "banksters" and politicians get caught with their pants down due to years of poor decisions they've got to go somewhere to save their hides. If that somewhere happens to be YOUR MONEY then so be it. Sadly, the vast unwashed will not care because its the "rich" who will get the shaft.

      Someone once said, Sociaism is a good thing ...... until you run our of other peoples money.

      • 3 Replies to rogluther
      • Just a little more info regarding Cyprus and IF the" Cyprus Templet" were ever used in other economies including the U.S..

        The Cyprus haircut on depositors was called a "wealth tax" and was written off by commentators as "deserved," because much of the money in Cypriot accounts belongs to foreign oligarchs, tax dodgers and money launderers. But if that template is applied in the US, it will be a tax on the poor and middle class. Wealthy Americans don't keep most of their money in bank accounts. They keep it in the stock market, in real estate, in over-the-counter derivatives, in gold and silver, and so forth.

        Are you safe, then, if your money is in gold and silver? Apparently not -- if it's stored in a safety deposit box in the bank. Homeland Security has reportedly told banks that it has authority to seize the contents of safety deposit boxes without a warrant when it's a matter of "national security," which a major bank crisis no doubt will be.

        Something to think about especially since just two major banks (JPM and B or A) hold derivatives with a notional value in excess to $150 TRILLION, which by the way, is more than double global GDP.

        Can anyone say "house of cards".

      • Hello ….. my name is Apple.

        I'm new to this board and I'm looking for some advice.

        I run a VERY successful world-wide business. Due to the success of my business I'm sitting on a lot of retained earnings in the form of cash. Much of it is now in euro-zone banks.

        With what just happened in Cyprus do any of you think some of my cash may be at risk? If so, can you offer any suggestions about what I should do?

        I've been getting a lot of recommendations from my in-house “experts” such as: a stock buy back, increased regular dividends, a special dividend, acquisitions, bring it back to the U.S. and pay the tax and even just hold tight, things in Europe will straighten themselves out. But I don't fully trust my in-house “experts”.

        I'm hoping some of you may have some better ideas.

        Thanks in advance ….. your opinions will be welcome.

      • Dear Apple

        You may indeed have a future problem.

        I suspect I know who you are and in what business you're involved.

        I think your first choice should be to diversify into other fields which may hold a better long-term prospect for sustained growth. Don't get me wrong, I think your current business has good growth prospects for next several years but you should think about getting involved in something else that's not as susceptible to the “next new gadget”. One that will likely be in demand for many decades.

        More specifically, you should take about 40% of your available cash and buy-out SCCO! Let the existing management run the business (with some modifications) and then sit-back and relax. You're current business will provide plenty of cash in the near-term and SCCO will likely provide an excellent return in the longer-term especially since your cash flow may just be able to finance future expansion of SCCO without going into debt with the “banksters” (and provide a better return than you're now getting on your cash ….. and with less risk).

        I suggest an offer of $50 per share would do the trick. One additionally twist, offer to buy the shares now held by GRUPO while giving private shareholders the option of retaining their stake in SCCO if they so choose.

        I think a move of this nature would be very difficult for existing shareholders to refuse and, more importantly, it would make these posts germane to this board.

 
SCCO
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