Cyprus will join a growing list of countries being financially bailed out by EU countries, but their deal is a little different. In return for being (temporarily) propped up by somebody else’s tax money, savers -the responsible ones, how ironic- are set to be ripped off for 10% of their bank accounts. Once word got out, they closed the banks so depositors didn’t drain everything.
Can you imagine a government justifying the “appropriation” of 10% of your savings to help fix a debt problem created by irresponsible politicians who can’t say no to any sort of spending? I can. I think it’s just the sort of thing Barack Obama’s cronies would scheme to “fix” our massive debt problem. If you don’t think it can happen in America, think again: it already did.
But to think those types of financial and economic events couldn’t happen here, hmmmmm…..In 1933, President Franklin Delano Roosevelt declared a national bank moratorium (and) he closed all banks.
Then, via Executive Order 6102, the government confiscated all gold and gold certificates, exchanging them for paper. Consequently, if you didn’t surrender your gold, you went to jail. The price of gold was set at $20.67 per ounce. Yet, within a year, the government reset the price to $35.00 per ounce, effectively fleecing the American public by 69%.
And speaking of rip-offs, just remember that in order to support the UAW in 2009, President Barack Obama rejected the rule of law for GM senior and subordinated debtholders, thus relegating them to the back of the line. Next, consider that former SEC Chairman Mary Schapiro along with current SEC Commissioners Luis Aguilar, Troy Paredes, and Daniel Gallagher have all previously warned the general public about the risks involving money market accounts, effectively stating that there is neither a guarantee on the return of capital nor is there a guarantee regarding the liquidity of the funds. In page after page of SEC documents, notifications were clearly written that money market investors are not being reasonably rewarded for the risk that they’re currently taking.
In addition, after extensive 2011 Congressional analysis failed to discover where the missing $1.6 billion of MF Global customer money had gone, J.P. Morgan was recently found to not have disclosed the risks taken and monies lost by the excess deposits as compared to the loans domiciled at J.P. Morgan.
Finally, following the “lost decade” of investment 2000-2009 which shed a very bright light on the failure of self-directed retirement accounts, former Treasury Secretary Tim Geithner discussed the possibility of nationalizing IRAs and 401ks as a way of preserving the wealth of Americans (Townhall)
In classic liberal “upsidedown speak,” nationalizing your IRA or 401K is “preserving” it. Right.
Tyler Durden at ZeroHedge wonders aloud why it would be any different here. The Cypriots thought their money was safe, too:
While we explained exactly why there is a possibility of a Europe-style wealth tax in the US, it appears the American Banking Association has decided to put out fires early…
While the crisis in Cyprus is a real concern for depositors in Cypriot’s banks, it has no implication for depositors in U.S. institutions. Depositors in U.S. banks are insured up to $250,000 and no insured depositor has ever lost money in a bank failure…
So, it seems, the basis for not worrying about US deposits is the rule of law and the deposit insurance? Remind us again what Cypriots thought they had?