Covered at Reason 24/7: Spaniards Shield Assets in Bitcoin To Avoid Bank Account Grab

Reason

The great Cypriot bank account grab of 2013 may or may not be off. Sure, Cyprus's lawmakers rejected a proposal that would carve a chunk out of the deposits of every depositor in the country, but officials are back for another try. The latest proposal would nationalize the country's pension funds and steal a little bit less from bank accounts than was originally envisioned. Banks remain closed and funds frozen while the details are worked out. Perhaps unsurprisingly, people well beyond the boundaries of the tiny island nation are scared shitless by the idea that government officials might just help themselves to private savings to pay ill-considered government bills. In just two days, the value of Bitcoins has risen 15 percent as Spaniards convert euros into the digital currency.

From Bloomberg Businessweek:

Since Sunday, a trio of Bitcoin apps have soared up Spain's download charts, coinciding with news that cash-strapped Cyprus was planning to raid domestic savings accounts to pay off a $13 billion bailout tab. Fearing contagion on the other end of the Mediterranean, some Spaniards are apparently looking for cover in an experimental digital currency.

"This is an entirely predictable and rational outcome for what's happening in Cyprus," says Nick Colas, chief market strategist at ConvergEx Group. "If you want to get a good sense of the stress European savers are feeling, just watch Bitcoin prices."

The value of the virtual currency has soared nearly 15 percent in the last two days, according to the most-recent pricing data. "One hundred percent of that is due to Cyprus," says Colas. "It means the Europeans are getting involved."

Follow this story and more at Reason 24/7.

If you have a story that would be of interest to Reason's readers please let us know by emailing the 24/7 crew at [e-mail], or tweet us stories at @reason247.

Comments

[stateless]

Everyone should have a few Bitcoins, Gold & Silver Coins and some fiat cash on hand.

[bmp1701]

Kulaks, wreckers, or hoarders?

[Whahappan?]

Yes.

[TheZeitgeist]

+1

[Stormy Dragon]

Damn, now I wish I had Bitcoins to sell into this bubble. There's so much money to be made in bubbles, but it's so hard to figure out what the next stupid thing people are going to put all their money into is.

[sage]

Semen bubbles. And I got a big one for you.

[Archduke Pantsfan]

how do you get bitcoins?

[A Secret Band of Robbers]

When they were at $13, $25, and $30, I decided to wait out the bubble before I bought. Stupid, stupid, stupid.

[Episiarch]

This bank grab should strike fear into hearts everywhere, because this is where we're headed. Probably not any time soon, but the government already steals from all of us. What would possibly stop them from just stealing more?

[Hugh Akston]

Democracy, Epi. The infallible bulwark against tyranny.

Why, if the government tried to confiscate bank deposits in order to pay for some crooked bailout, we'd wait two or three years for their next reelection and only retain 87% of them instead of the usual 90%.

That would restore balance to the Force.

[A Secret Band of Robbers]

That two year period where the alternate party would enact largely the same agenda instead of them before the pendulum swung back would teach them a harsh lesson.

[Sevo]

Fractional banking exists on the simple matter of trust.
Remove that and, presto, not one bank would be open in the span of a day. And there's hardly a better way to destroy the trust than have the government even hint that it's going to confiscate what's in the banks.

[Scarecrow Repair]

Cafe Hayek had a link to this yesterday.

http://econlog.econlib.org/arc.....mello.html

Wonderful little story how some 1932 bureaucrat calculated the average check value at $175 and got Congress and Hoover to impose a 2 cent per check tax. Didn't stop to think that most checks wee quite small and it was only huge financial checks which boosted the average. The natural outcome was people paying in cash instead of by check, when the last thing the economy needed was more people drawing more cash from banks 3 years into the Great Depression. It also didn't hep throwing in such a regressive tax.

Of course, this was that cold-hearted devil Hoover. I'm sure the savior FDR repealed it immediately.

[Anonymous Coward]

Oh yay, averages! Because the guy who writes $1,000 (in 1932 money) doesn't skew the stats at all!

Our tireless, brave, underpaid, overworked civil mastersservants.

[Sevo]

"Wonderful little story how some 1932 bureaucrat calculated the average check value at $175 and got Congress and Hoover to impose a 2 cent per check tax."

That's FUNNY! And AC points out why it's funny...
But it's funny to me, since I can move assets around and hire decent legal help.
It certainly *isn't* funny to the folks who get nailed with the costs and don't have the options to fight them.

[Brandybuck]

Under historic free banking periods banks were capitalized. If there was a bank run you might not get your money back TODAY, but the banks still had assets it could sell to pay you tomorrow. Banks actually used to advertise their capitalization. Not all banks were fully capitalized, but you didn't need to trust the banks like you do today, you just needed to look at their balance sheets.

Now that we have FDIC and bailouts, bank capitalization has plummeted almost to nothing.

[buybuydandavis]

" The latest proposal would nationalize the country's pension funds and steal a little bit less from bank accounts than was originally envisioned. "

Coming to a country near you. Count on it.

[Hyperion]

My daughter-in-law just took a job in Portugal. I am worried. Just told her today, maybe you better sew your monetary units(whatever that may be) up in a mattress and forget about all that direct deposit silliness...

Seriously, the Eurotards have jumped the shark, and B.I.T., Barack in training, is envious that we haven't quite yet reached their level of retard.

[Apatheist ?_??]

On the other hand she'll have easy access to delicious port.

[Hyperion]

Someone gave me a bottle of it, just brought back from Portugal, a couple of years ago. I drank the entire bottle and got quite the buzz going, didn't realize it was so strong, but no complaints.

[Archduke Pantsfan]

The only answer is Magic beans.

[Archduke Pantsfan]

Former BlackBerry executive George Campbell has been deported to his native Scotland after an infamous incident of rowdy drunkenness on an Air Canada flight.

"Both men were restrained with plastic restraints," the court document states.
At this point, the two ex-executives behaved like wild animals caught in a trap.
"One of them managed to get out of the restraints; and Mr. Wilson appeared to have chewed his way out of the plastic restraints," the document states. "Tape was used to restrain them."