QOTW: Do you worry that what’s happening in Cyprus could happen where you live?
Banks in Cyprus, the tiny Mediterranean island nation best known as a sunny getaway destination for Brits and a money-laundering haven for Russian gangsters, have been shut for more than a week now, and will remain closed into next week, all in an effort to keep ordinary Cypriots from withdrawing all their savings before their Eurozone overlords snatch some of it away. The first proposed tax — of 6.75 percent on deposits under €100,000 and 9.9 percent on those over — was shot down by the Cypriot parliament, but just the mere proposal that ordinary, working-class citizens should pay for the excesses of corporate banks over which they have no control should horrify all of us. It’s been clear for a long while that there are different rules for the masters of the universe than there are for us proles, but a line was crossed here: they’re no longer even pretending that this isn’t true.
Do you worry that what’s happening in Cyprus could happen where you live? Why, or why not?
The biggest potential danger at the moment would seem to be for weaker countries within the Eurozone, now that this precedent has been set. But I’m not sure those outside the Eurozone should take any comfort. Americans might say, “Well, our deposits are insured by the FDIC up to $100,000, so we’re okay.” Except Eurozone bank deposits are (supposedly) insured up to €100,000, too. And how different are the big banks from Russian mobsters? How different is the global banking system from Cyprus’s? From a New York Times editoral:
Senator Chuck Grassley, a Republican, asked for more information on why federal and state authorities chose not to indict HSBC after it acknowledged laundering money for Mexican drug cartels, helping rogue states avoid international sanctions and working closely with Saudi Arabian banks linked to terrorist organizations.
[U.S. attorney general Eric] Holder said: “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.”
When the top law-enforcement people say stuff like this, they’re saying that a lack of trust — or even outright total fear — on the part of us little people in the banking system is not a “negative impact.” All that matters is that corporate bankers not be impacted in any way, or impeded in their business, even if it’s criminal. So why shouldn’t we be afraid — especially in light of what’s going on in Cyprus — that we’ll be targeted instead of those who actually destroyed our economy?
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