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Why A Cyprus-Like Seizure Of Your Money Could Happen Here
Forbes ^ | March 25, 2013 | Steve Forbes

Posted on 04/08/2013 10:43:49 PM PDT by Tolerance Sucks Rocks

Don’t put it past our politicians to try it in a financial emergency. The breaking of contracts by the U.S. government, unfortunately, has happened before, and what’s under way in Cyprus shows that feckless politicos will continue to try such things.

In 1933–34, amid the depths of the Great Depression, the U.S. government seized the American people’s gold holdings. From that point, until 1975, it was illegal for Americans to own gold, other than in some forms of jewelry or collectors’ coins. In the panic of the Depression years the courts upheld this unconstitutional confiscation. Yes, people received dollars in return for their holdings of the yellow metal, but the dollar itself was formally devalued by 40%. Moreover, the U.S. government abrogated private commercial contracts containing the so-called gold clause, which allowed creditors to receive payments in either dollars or gold.

In the early 1970s President Richard Nixon annulled contracts selling soybeans to Japan. This was done for domestic political reasons: U.S. soybean buyers had been complaining about the high prices, and Nixon felt keeping the product here would mollify them. Of course, the real reason that the prices of soybeans and other agricultural commodities were rising was that Nixon and the Federal Reserve were deliberately undermining the value of the U.S. dollar. (Japan responded by investing in Brazil, which became one of our major soybean competitors.)

In 2009 the Obama Administration pushed through a brazenly political restructuring of bankrupt General Motors and Chrysler, and huge payoffs were made to the United Auto Workers, a pro-Obama union, at the expense of bondholders. Banks signed off on the deal because they had no choice—their survival depended on the whims of Washington. Once again the courts turned their backs on this patently unconstitutional exercise.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Constitution/Conservatism; Editorial; Foreign Affairs; Germany; Government; News/Current Events
KEYWORDS: 401k; angelamerkel; banks; benbernanke; cyprus; eu; fdr; fed; federalreserve; gold; imf; inflation; iras; moneymarkets; rothira; seizure; socialsecurity; soybeans; taxes

1 posted on 04/08/2013 10:43:50 PM PDT by Tolerance Sucks Rocks
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To: 3D-JOY; abner; Abundy; AGreatPer; Albion Wilde; AliVeritas; alisasny; ALlRightAllTheTime; ...

PING!


2 posted on 04/08/2013 10:44:13 PM PDT by Tolerance Sucks Rocks (Drag Me From Hell!)
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To: Tolerance Sucks Rocks

Barry and the ‘RATS won’t be happy until they have it all.


3 posted on 04/08/2013 10:44:50 PM PDT by FlingWingFlyer (Dude! Where's my Bill of Rights?)
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To: Tolerance Sucks Rocks

If ANYONE in government is ready to break contracts and make seizures, it’ll be... you guessed it - hussein obama.


4 posted on 04/08/2013 10:48:44 PM PDT by Jack Hammer (American)
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To: Tolerance Sucks Rocks

I think all of this is designed to start a civil war.


5 posted on 04/08/2013 10:53:35 PM PDT by Republican1795.
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To: Tolerance Sucks Rocks

Won’t happen anytime soon. This is a different era with too many citizens who are getting ready to fight. They can try their run-arounds, but when the American populace sees their assets being seized, all bets are off. I guarantee it. We’re on the verge as it is. Obama, Congress, the ABC agencies don’t have the balls to try it.


6 posted on 04/08/2013 10:55:28 PM PDT by A Navy Vet (An Oath is Forever)
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To: A Navy Vet

Buy all the ammo you can afford. You will need it.


7 posted on 04/08/2013 10:59:04 PM PDT by entropy12 (The republic is doomed cuz people have figured out they can get free stuff by voting democrats)
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To: Tolerance Sucks Rocks

I have had no American banking in almost 10 years.


8 posted on 04/08/2013 11:01:53 PM PDT by AlexW
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To: jiggyboy; PA Engineer; blam; TigerLikesRooster; Cheap_Hessian; CJinVA; Jet Jaguar; ...

Goldbug ping.


9 posted on 04/08/2013 11:02:31 PM PDT by Jet Jaguar
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To: A Navy Vet

Wanna bet? I’m sure they’ll find some excuse. And if fellow Americans outside of our circles get up from DWTS to fight back, I will be pleasantly surprised.


10 posted on 04/08/2013 11:26:55 PM PDT by Tolerance Sucks Rocks (Drag Me From Hell!)
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To: Jack Hammer

Problem is that the Republican leadership is in bed with them and wants to do the very same things.....


11 posted on 04/09/2013 12:43:45 AM PDT by stockpirate (Sen. John Kerry belonged to the terrorist group VVAW.)
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To: Tolerance Sucks Rocks

The republicans in the republican party fully in mass totally rejected ANY conservative candidates in 2012..
Two years after a total republican rout of democrats in 2010....

UNLESS the same people that stole the election in Nov 6th 2012 also scewed the republican primary’s by voter fraud as well..

NAh... You ThINK?... Nevermind republicans don’t seem to care..


12 posted on 04/09/2013 12:58:57 AM PDT by hosepipe (This propaganda has been edited to include some fully orbed hyperbole..)
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To: A Navy Vet
Won’t happen anytime soon. This is a different era with too many citizens who are getting ready to fight. They can try their run-arounds, but when the American populace sees their assets being seized, all bets are off. I guarantee it. We’re on the verge as it is. Obama, Congress, the ABC agencies don’t have the balls to try it.

I agree with you in part, but think those in DC are arrogant enough to try it. They have no clue of the animosity they have created. But as soon as the older generations are gone - those that know about the Constitution, who understand why freedoms are important, who remember those who sacrificed to ensure we have those freedoms - then the younger generation will be willing to become enslaved.
13 posted on 04/09/2013 2:23:36 AM PDT by yorkiemom
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To: Tolerance Sucks Rocks

Dear leader could try it, but as we’re seeing in Cyprus, people would resist. Even if the government closes the banks to do this or puts limits on withdrawals, people would still protest.


14 posted on 04/09/2013 2:26:35 AM PDT by RWB Patriot ("My ability is a value that must be purchased and I don't recognize anyone's need as a claim on me.")
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To: Tolerance Sucks Rocks

This is why the communist druggie says our deficit and debt are not a problem. As long as productive Americans have savings, including retirement accounts, the far left thinks they have enough money to move us “Forward!” to their vision of a socialist utopia.


15 posted on 04/09/2013 2:34:30 AM PDT by Pollster1 (A war can only be just if it is fought with a reasonable chance of success.)
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To: Tolerance Sucks Rocks

Bump to the crowd who keeps saying, “It ain’t gonna happen here!” :)


16 posted on 04/09/2013 3:49:07 AM PDT by MeneMeneTekelUpharsin (Freedom is the freedom to discipline yourself so others don't have to do it for you.)
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To: A Navy Vet

They don’t have to that here. They steal a few percent every year by printing more money - its called “inflation.” A dollar today is worth about a third what it was when I was a kid.


17 posted on 04/09/2013 4:01:37 AM PDT by Little Ray (How did I end up in this hand-basket, and why is it getting so hot?)
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To: Tolerance Sucks Rocks
Whenever I see a headline trumpeting an alarm about s "Cyprus-Like Seizure," it becomes clear to me that there are a lot of people out there who don't understand how banks work.

Bank deposits are protected under the clear terms of a contract. In the U.S., the FDIC insures them. If you have $500,000 in a bank account and the FDIC only covers $250,000 of that money, it's hardly a case of a "seizure" by the bank or government if you lose some or all of the rest.

18 posted on 04/09/2013 4:44:26 AM PDT by Alberta's Child ("I am the master of my fate ... I am the captain of my soul.")
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To: Alberta's Child

GM investors were protected by many years of established bankruptcy law.They got screwed and the union types benefited.Law means nothing in this country now.


19 posted on 04/09/2013 4:50:27 AM PDT by Farmer Dean (stop worrying about what they want to do to you,start thinking about what you want to do to them)
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To: Farmer Dean
GM investors already knew that they were in a very risky position. Go back and look at the steep discount in the prices of GM corporate bonds in the months and years leading up to the company's collapse. The market had already determined that the company's bonds were officially "junk," which meant they carried an enormous risk by definition.

I'm not saying that what happened with GM was right by any objective measure, but anyone who has dealt with financial matters in major U.S. corporations will tell you that many of these companies are untenable disasters regardless of how they get "fixed."

20 posted on 04/09/2013 5:02:38 AM PDT by Alberta's Child ("I am the master of my fate ... I am the captain of my soul.")
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To: Alberta's Child

Yes..... it already happened to me.

If it happens again,it will be open season on rqndom democrats.


21 posted on 04/09/2013 5:06:33 AM PDT by bert ((K.E. N.P. N.C. +12 .....History is a process, not an event)
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To: Alberta's Child

I understand.But the judge ignored established law.Like everything else these socialists do,just make it up as they go along,to the benefit of their cronies.


22 posted on 04/09/2013 5:16:46 AM PDT by Farmer Dean (stop worrying about what they want to do to you,start thinking about what you want to do to them)
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To: Tolerance Sucks Rocks

crowd conditioning by Obama and cohorts like Elizabeth Warren by saying ‘They didn’t build that!’ as in you didn’t earn that yourself.
So, likely, you really don’t own that money. Prepare to give it ‘back’. Just remember how the MSM came to the defense of Obama, Warren, etc.
Jerry Nadler said on CSpan that savings leads to job losses. They think they’ve got to come up with ways to ‘encourage’ you to spend, spend, spend...


23 posted on 04/09/2013 6:10:41 AM PDT by griswold3
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To: Republican1795.

The left is looking for an excuse to see their wet dream come true -

using the power of the State to murder those who disagree with and resist them.


24 posted on 04/09/2013 6:15:18 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: yorkiemom

I’ve said it before on other threads.

All they need to do is set up choke points on the major commodities routes/production facilities, and the store shelves would be empty in two days.

In ten days, people would be begging for assistance, willing to do whatever it takes.

Gummint could pull it off with 5000 troops.


25 posted on 04/09/2013 6:19:11 AM PDT by djf (Rich widows: My Bitcoin address is... 1ETDmR4GDjwmc9rUEQnfB1gAnk6WLmd3n6)
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To: djf
In ten days, people would be begging for assistance, willing to do whatever it takes.

Fortunately the "whatever it takes" doesn't mean that they'll do what the government says; there is a lot of truth in the saying "when you have nothing to lose, then you are truly free."

26 posted on 04/09/2013 8:48:56 AM PDT by OneWingedShark (Q: Why am I here? A: To do Justly, to love mercy, and to walk humbly with my God.)
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To: Alberta's Child
Bank deposits are protected under the clear terms of a contract. In the U.S., the FDIC insures them. If you have $500,000 in a bank account and the FDIC only covers $250,000 of that money, it's hardly a case of a "seizure" by the bank or government if you lose some or all of the rest.

FDIC insurance is in case the bank fails. It doesn't cover government take-over of our assets.
27 posted on 04/09/2013 9:16:33 AM PDT by yorkiemom
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To: djf
All they need to do is set up choke points on the major commodities routes/production facilities, and the store shelves would be empty in two days. In ten days, people would be begging for assistance, willing to do whatever it takes.

Could be simpler than that - they can just cut off the EBT cards.
28 posted on 04/09/2013 9:25:00 AM PDT by yorkiemom
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To: Little Ray
They don’t have to that here. They steal a few percent every year by printing more money - its called “inflation.”

A few percent isn't enough, and the flows to the government are less direct than a wealth levy. Speculators can benefit from inflation if they bet right; no one benefits from a wealth levy except the redistributees.

29 posted on 04/09/2013 12:23:20 PM PDT by Pearls Before Swine
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To: Alberta's Child
Whenever I see a headline trumpeting an alarm about s "Cyprus-Like Seizure," it becomes clear to me that there are a lot of people out there who don't understand how banks work.

Bank deposits are protected under the clear terms of a contract. In the U.S., the FDIC insures them. If you have $500,000 in a bank account and the FDIC only covers $250,000 of that money, it's hardly a case of a "seizure" by the bank or government if you lose some or all of the rest.

Thanks for mentioning this. I agree.

What people don't realize is that when they deposit more than the insured amount (which the government agrees to make up by taxing as necessary) they are in fact participants in a hedge fund run by the bank. It's supposed to be a relatively conservative hedge fund that just lends with enough risk to make a spread of a few percentage points.

However, it often happens that the risk gets out of hand. For example, in previous decades the banks assumed a huge amount of duration risk (interest rate risk) in mortgages, which used to be considered conservative. When inflation caused interest rates to rise dramatically in the Carter years, the mortgages lost value, and the banks were upside down.

In Cyprus, you had a similar situation. In order to attract deposits into relatively small and unknown institutions, the Cyprus banks offered much higher interest rates than other banks in the EU. They earned this interest (for a while) by investing heavily in high-interest Greek sovereign debt. After all, sovereign debt never goes bad, right? And, the Basel bank accords gave a zero-risk rating to sovereign debt.

A good deal of fault lies with the banking authorities. But, some lies with the depositors for not understanding what they were doing when they invested above the insured limit.

30 posted on 04/09/2013 12:45:40 PM PDT by Pearls Before Swine
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