Why A Cyprus-Like Seizure Of Your Money Could Happen Here

Forbes ^ | March 25, 2013 | Steve Forbes

[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.

[Tolerance Sucks Rocks]

PING!

[FlingWingFlyer]

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

[Jack Hammer]

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

[Republican1795.]

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

[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.

[entropy12]

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

[AlexW]

I have had no American banking in almost 10 years.

[Jet Jaguar]

Goldbug ping.

[Tolerance Sucks Rocks]

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.

[stockpirate]

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

[hosepipe]

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..

[yorkiemom]

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.

[RWB Patriot]

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.

[Pollster1]

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.

[MeneMeneTekelUpharsin]

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

[Little Ray]

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.

[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.

[Farmer Dean]

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.

[Alberta's Child]

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."