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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While the circumstances surrounding Cyprus are a little different than the circumstances here in the United States, the solutions that the so-called experts of the EU clearly demonstrate our global leaders don’t give a rat’s ass about the common folk, they only want to make sure their banking buddies never get inconvenienced.
There was a wonderful list in Cracked.com of all places highlighting how screwed the middle and lower classes are: http://www.cracked.com/blog/4-things-politicians-will-never-understand-about-poor-people/
Considering the international banksters (in my case the Federal Reserve)
steal my money through inflation and having been doing so since 1913
(happy 100th anniversary Fed, yeah right), it makes perfect sense, once the
inflation obviously isn’t working, to simply rob the people directly.
Could a Cypriot style bank raid happen where I live (USA)? Anything is possible but so far there has been no need for them to sully their hands so directly. Since our Federal Government is willing to bail them out through taxation I’m sure they will continue the indirect approach. Once inflation and taxation fail, then yes, everyone had best make preparations to be robbed more directly.
I’ve been following the economic situation for at least four years now. Things are pretty messed up and still getting worse. They didn’t fix any problems during the last crisis and only managed to put off dealing with the really big ones for a bit. Every time they do this though, they add to those problems and make dealing with them that much harder.
Institutions such as the FDIC will not protect us from this sort of thing. They are supposed to protect against depositor loss. They are part of the government and can be easily bypassed if that same government decides they need the money to prop up failed economic policies. They can argue that taking your money through taxation is not a loss for the FDIC to cover. They could also vote the FDIC out of existence if they so wished too. As for it happening here in the US, we do have precedent With the GM bankruptcy the UAW was given preference over the bond holders. Seems political alliances are more important then the rule of law these days.
The world is so interconnected financially, that if these come apart in anywhere significant, it’s likely to take down the whole system. There is all sorts of derivative credit risk hidden throughout the system and will chain react if enough pressure is put on it. Problems were ignored when they were manageable. Now they have become so great that no one wants to (such as the out of control growth in medical costs that is the real lethal cancer in our economy). The longer we delay, the worse the day of reckoning will be when it comes and it’s not that far off anymore.
When Maxwell raided the pension funds, that was bad and naughty. When the government did the same thing, that was sound fiscal policy.
But I don’t worry about it, because I can have no influence on the situation by doing so.
The survivalists hoarding precious metals don’t look quite so crazy now, do they?
Watch Max Keiser on YouTube, or check out Simon Black’s Sovereign Man website. They’ve been warning for years about the lengths that bankrupt governments and Big Finance will go to when the SHTF.
Well, yeah, they still do. Because converting those precious metals to something useful, at a time of crisis, tends to give an even worse exchange rate than hanging on to currency in the first place.