‘A giant sucking sound as money exits Cyprus'

EU 'thieves' will force people to think twice about where to keep their money, so that it isn’t confiscated like in Cyprus. The Middle East and Asia are the most likely places where these funds will travel next, Patrick Young told RT.

Patrick Young: I do not think that the restrictions can come off because there is going to be a giant sucking sound as all the money disappears from Cyprus. There are all these oligarchical private jets and corporate private jets sitting in the Nicosia Airport, faithfully hoping that they’re going to manage to get their money out in some shape or form. Where is the money going to go? It is going to go to all manner of other havens, and I would suggest most of them would go outside the European Union.

First stop, probably the closest place you want to go is somewhere like Dubai or one of the other emirates, they’ve got quite a reasonable banking system, financial center pushing very, very hard and trying to improve. And if you want to go even further east, one of the spots I think a lot of money will end up is Singapore. They’ve got very client-focused oriented goods, the Singaporean government is strong with finances. They do all the sorts of things that Europe is supposed to do but doesn’t.

RT:What about shadow banking? Will it become more of a problem now?

PY: I would actually disagree with you on that word “problem.” Shadow banking is going to increase. Is shadow banking a catastrophic, horrible thing for human kind? Well, it is if you’re a banker. That is the total problem. And the difficulty we’ve got to remember is that we’re still filtering through banker propaganda that says only bankers are safe to handle your money. Well, look at the complete and utter screw-up they made in the last decade. Ultimately, that is the difficulty we’re going to see.

Alternatives to conventional, bankrupt, useless, incompetent and indeed banks with a total democratic deficit or any degree of accountability is going to be a problem. They’re going to lose a huge amount of power. What we’re going to go see is a great deal more rising up of things like the Internet. Peer-to-peer systems are going to be used a great deal more. You’re going to see this thing peer-to-peer lending, which is the ultimate nightmare of bankers. It is a system which much more efficiently allocates capital between borrowers and lenders, allows people to go about their business and it does not require bankers in the middle making outrageous profits to then lose on all sorts of proprietary trades.

RT:What about Italy and Spain?

PY: There are lots of thing to concern with, and clearly one of the issues at the moment is Italy and Spain because they’ve got incredibly large problems of fiscal nature, they’re going to find it very difficult to manage to fund their way out of the crisis, and I think they’ve got to be amongst the countries who look very uneasily at the remarks by head of Euro group who said that ultimately savers will be in line to lose their savings in the next line of bailouts. That is a catastrophe.

Basically, we’re in a situation whereby anybody who’s got money in a bank must be worried about where it is sitting because it could become confiscated at any point in time by bureaucratic Euro thieves.  So, is there a problem? Yes, there is, because Italy and Spain are only at low points in time, one further auction away from managing to sell their government debt, but if they do not do it, there is going to be a catastrophe. As we know, the Spanish government is utterly incompetent and the Italian government, well, there isn’t really an Italian government worth talking about.  They are still bickering and trying to solve something out following the inconclusive election.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.