We last considered Cyprus as its government proposed to bail out its failing banks by grabbing 10 percent of the money depositors had entrusted to those banks. Its parliament refused to do that (mobs in the streets, etc.) so the government became compassionate; to protect the poor, it will grab instead, 40 percent of all deposits over $100,000. Yeah!
It’s necessary to steal the citizen’s money to bail the hapless banks this time because so much debt was run up for the last bailout that the loan door has closed. Those loans of course, will be repaid by the taxpayers (more likely, by their kids and grandkids) plus a lot of interest. Instead of stealing the citizens’ future for the banks, the government is now reaching into the present. What will citizens retire on after their savings are cut nearly in half by their compassionate government? (Silence…)
The banks, swiftly closed to stem frightened citizens’ withdrawing their money, are still shut tight. How are people surviving? Well, as the compassionate government makes clear: ‘Who cares?’ What matters to the governors is obviously not people; it’s banks. As bank robber Willie Sutton famously said: “That’s where the money is.” He was pretty small time though, compared to government.
See, banks fail (according to government) when their capital falls below some preset level. Then, they either break up and vanish, taking everybody’s money with them, or are bailed out by suckers pouring more cash into the hole to refill it, rather like handing more of your money to your irresponsible nephew after he has gone bankrupt with the money you gave him earlier. You might not do that with your own money but politicians aren’t using their money; they’re using yours.
But see, it isn’t only Cyprus. Savers Will Be Raided to save the Euro according to experts, which is to say, the Cyprus pattern will expand into the rest of the E.U. as the collapse continues its course. In fact, no less an authority than the boss of the E.U. finance authority is publicly asserting exactly that as Glimpsing the Euro End Game will tell you. He’s getting a lot of flak for his honesty, too.
So citizens of Cypress are going into hard times with a big chunk of their savings vanishing like snow under a hot sun just as they lose more jobs and their cost of living inflates. An age-old pattern with profligate governments that for some reason, they never teach in public schools.
Greece is gone over that cliff already, Spain, Italy and even France will follow. Germany, China and India will suddenly lack customers. Argentina and Venezuela are already in trouble and America? America, in the last Great Depression, suffered longer than the rest under the Keynesian ‘spend yourself rich’ policies of its leaders. That didn’t work then and it’s not working now, so we will likely see it accelerated. A fair load of U.S. wealth vanished in 2008-2010, right? We ain’t seen nuthin’ yet!