Growing wealth inequality means that the wealthy have nowhere to hide and that events like those in Cyprus will happen in more countries around the world, including developed nations, said Marc Faber, the contrarian investor and publisher of the Gloom, Boom & Doom Report.
"It will happen everywhere in the world, in Western democracies," Faber said "Squawk on the Street"
on Tuesday. "You have more people that vote for a living than work for a
living. I think you have to be prepared to lose 20 to 30 percent. I
think you're lucky if you don't lose your life."
"If you look
at what happened in Cyprus, basically people with money will lose part
of their wealth, either through expropriation or higher taxation," he
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by Eric Sprott & Shree Kargutkar, Sprott:
there is a risk in a bank, our first question should be: ‘Ok, what are
you the bank going to do about that? What can you do to recapitalise
yourself?’ If the bank can’t do it, then we’ll talk to the shareholders
and the bondholders. We’ll ask them to contribute in recapitalising the
bank. And if necessary the uninsured deposit holders: ‘What can you do
in order to save your own banks?’” – Jeroen Dijsselbloem, March 26, 2013 1
A deal has just been struck with Cyprus. However, it was not the deal
that Cyprus saw other countries receive. This was not the deal received
by Greece, Italy and Spain. There were no bailed out banks in the
aftermath. There was no transfer of risk from over-levered banks to the
taxpayers. The risk was pushed back onto the banks. Their equity was
wiped out. Their bondholders were wiped out. Their uninsured depositors
saw their accounts raided for additional liquidity. It wasn’t just that
the rules of the game had changed, the game itself changed. By raiding
the depositors’ accounts, a major central bank has gone where they would
not previously have dared. The Rubicon has been crossed. Going forward,
this is expected to be the “template” for dealing with risky,
over-levered banks and the countries which support them.
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