Skip to comments.Cyprus: Can It Happen Here?
Posted on 03/26/2013 8:32:27 AM PDT by SeekAndFind
The decision of the government in Cyprus to simply take money out of peoples bank accounts there sent shock waves around the world. People far removed from that small island nation had to wonder: Can this happen here?
The economic repercussions of having people feel that their money is not safe in banks can be catastrophic. Banks are not just warehouses where money can be stored. They are crucial institutions for gathering individually modest amounts of money from millions of people and transferring that money to strangers whom those people would not directly entrust it to.
Multibillion-dollar corporations, whose economies of scale can bring down the prices of goods and services thereby raising our standard of living are seldom financed by a few billionaires. Far more often they are financed by millions of people, who have neither the specific knowledge nor the economic expertise to risk their savings by investing directly in those enterprises. Banks are crucial intermediaries, which provide the financial expertise without which these transfers of money are too risky.
There are poor nations with rich natural resources that are not developed, either because they lack the sophisticated financial institutions necessary to make these key transfers of money or because their legal or political systems are too unreliable for people to put their money into these financial intermediaries.
Whether in Cyprus or in other countries, politicians tend to think in short-run terms, if only because elections are held in the short run. Therefore, there is always a temptation to do reckless and short-sighted things to get over some current problem, even if that creates far worse problems in the long run. Seizing money that people put in the bank would be a classic example of such a short-sighted policy.
After thousands of American banks failed during the Great Depression of the 1930s, there were people who would never put their money in a bank again, even after the Federal Deposit Insurance Corporation was created, to have the federal government guarantee individual bank accounts when the bank itself failed. For years after the Great Depression, stories appeared in the press from time to time about some older person who died and was found to have hidden substantial sums of money under a mattress or in some other place because they never trusted banks again.
After going back and forth, the government of Cyprus ultimately decided, under international pressure, to go ahead with its plan to raid peoples bank accounts. But could similar policies be imposed in other countries, including the United States?
One of the big differences between the United States and Cyprus is that the U.S. government can simply print more money to get out of a financial crisis. But Cyprus cannot print more euros, which are controlled by international institutions.
Does that mean that Americans money is safe in banks? Yes and no. The U.S. government is very unlikely to just seize money wholesale from peoples bank accounts, as is being done in Cyprus. But does that mean that your life savings are safe? No. There are more sophisticated ways for governments to take what you have put aside for yourself and use it for whatever politicians feel like using it for. If they do it slowly but steadily, they can take a big chunk of what you have sacrificed for years to save before you are even aware, much less alarmed.
That is in fact already happening. When officials of the Federal Reserve System speak in vague and lofty terms about quantitative easing, what they are talking about is creating more money out of thin air, as the Federal Reserve is authorized to do and has been doing in recent years, to the tune of tens of billions of dollars a month.
When the federal government spends far beyond the tax revenues it has, it gets the extra money by selling bonds. The Federal Reserve has become the biggest buyer of these bonds, since it costs them nothing to create more money.
This new money buys just as much as the money you sacrificed to save for years. More money in circulation, without a corresponding increase in output, means rising prices. Although the numbers in your bank book may remain the same, part of the purchasing power of your money is transferred to the government. Is that really different from what Cyprus has done?
Thomas Sowell is a senior fellow at the Hoover Institution
The groceries you could purchase with $100 back in 2008 now requires $140. So 30% of the value of your $100 has been stolen from you by a government who prints up new money and then gives that money to others in the form of food stamps.
At least in Cyprus, they are being up front about what they are doing. But here, they go after the middle class while the upper classes exchange their dollars for investments that will retain their value.
Reparations are here already. Redistribution is here already. Yet we are too stupid to realize it.
This article says “unlikely” to seize bank accounts, but what about IRA’s? THAT’S what they’re going to turn to!
Just exactly how are they going to seize our IRA’s?
I’d like to know what method they plan...
Yet again another article from the National Review that is a little SHORT ON FACTS, And I like Thomas Sowell. But, here is what they are not telling you:
President Obama and the United States Treasury Dept are in Complete Control and in charge of Decision making at the IMF, this is OUR GOVERNMENTS PLAN being implemented in a Foreign Country.
There is already talk of changing 401k’s and how they are taxed (currently not taxed until you take it out). That is how I think our government could go after our savings. Other than the aforementioned method of devaluing our current buying power.
The Hoover Institution is a vile organization.
Antony Sutton was at the Hoover Institution years ago but was not allowed to continue giving up the secrets of new world order international banking.
Mr. Sowell is an intelligent man, but is careful to not “wander off the reservation” of international banking money.
The Hoover Institution is one of the organizations that new world order uses its public face to present big monopolistic money, capital, banking, etc., as being “conservative” and “free market”.
But they conveniently always slip in the notion that “creating money out of thin air” is preposterous. This keeps public opinion - amongst conservative and small business types - decidely against having the Treasury reassert its right to be the sole creator of dollars and give the central bank Fed the heave ho. And if somehow the Fed is nixed, new world order has therefore set up public opinion in the financial community to require the Treasury to go buy gold from international banking every time it wants to print dollars, thereby continuing the dependence of government on them (dealers in gold for centuries).
If you do a little reading on Hoover and its namesake, you’ll find new world order. Hoover wiped history clean of much of nwo 20th century operations, and the financing behind the “cleanup” has never been published. Hoover Institution is sitting on a lot of information damaging to nwo.
The cat’s out of the bag now. It’s just a matter of time.
It won’t be an overt seizure in either case.
In the case of taking your savings, they’ll do it the sneaky way - inflation. They’re doing that to the tune of $85 billion in printed money per month.
Now, with the 401k’s & IRA’s, the way to “seize” those would be to disallow a “cash” option and provide the next “safer” option in gov’t bonds.
They’ll eventually be “forced” to be more overt,
but until then they’ll avoid exposing themselves as the thieves they are.
We’ll have a 1% bank transaction fee first,,, imho
Warning to all: the Cyprus story is being flagellated in the news to guage public response to the bank account confiscation.
Do you all hear this ?
This is a test.
Remember, ownership - and the ability to enforce one’s ownership rights - is the key to maintaining wealth.
An account can be seized by the government.
Any sort of fund that relates to retirement (IRA, 401k, company pension, railroad retirement, etc.) Will be rolled into social security, for your own good of course. The government knows that you aren’t capable of planning your own retirement, so they’ll take your funds, and put them in a lockbox, to be doled out to you according to your fair share. Oh, and they’ll allow the fed reserve to “tap” those funds to use at their discretion, because they know how to manage it better. But it doesn’t really matter, because under obamacare, you probably won’t live long enough to collect a pension anyhow, unless you’re an undocumented immigrant, government employee, or an executive for a financial institution.
Don’t believe me? Just see Argentina as an example.
I’ve realised it for a while. I only put money in my personal banking account as needed to pay for things. Otherwise the minimum amount to keep the account is all that sits there.
Exactly, and that won’t set well with day traders growing their IRA’s or others who invest heavily in tech stocks, etc.. That’s EXACTLY what they’ll do, force investments into government bonds.
If you have an IRA, or a 401k with a previous employer,
you should covert to a self-directed IRA.
And this self-directed IRA should be invested in an investment LLC that invests in hard assets.
And this LLC needs to be managed by YOU.
The productive role of financial institutions is to promote the investment of savings, and the efficiency of the investment of savings, as well as the overall degree of saving, and thereby, to raise the demand for and productivity of labor and the general standard of living.
The absence of the security of savings in financial institutions would mean that to an important extent individuals who have extra funds would lose the incentive to put those funds into the bank as savings, which would decrease investment. Instead, individuals in such a position, would thus have no alternative but to hold their savings in the form of hoards of money or accumulations of consumers' goods, such as jewelry, housing, and works of art. The consequence would be that their savings would not serve to make possible a demand for capital goods or for labor, The result of the lesser demand for capital goods would be that the extent to which the economic system concentrated on the production of capital goods would be correspondingly less. And thus, the ability to achieve a production of capital goods sufficient to make possible capital accumulation would be correspondingly less. The effect would almost certainly be economic stagnation at an extemely low level of productivity of labor.
The standard of living of the average worker would also suffer from the fact that savings that are hoarded or held in the form of accumulations of personal consumers' goods do not contribute to the demand for labor and the payment of wages, as do saving that are invested
Here is one thought that got some air couple months ago....
If you don’t trust Rush, google your preferred purveyor.
It will happen here (again). They will find a way to steal from accounts while calling it something that sounds nice and harmless. It will be too complex for the average American to understand, and so the fascists in Washington will get away with it.
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