The markets are staging a bounce today based on:
- The ECB surfacing to say it will provide liquidity to help with the Cyprus situation.
- Bernanke’s speech today and the Fed’s FOMC (stocks tend to rally going into FOMC meetings).
This is once again the markets praying and hoping for divine guidance from the Central Bankers. However, the fact remains that every sensible investor in the world should be absolutely horrified by what was proposed in Cyprus.
Forget Bernanke forget Mario Draghi forget all of that. None of it matters as much as what was proposed in Cyprus.
The simple fact remains that politicians proposed stealing savings deposits from the people in order to fund a bank bailout. You can dress this idea up however you like, calling it a “levy” or “tax” but taking someone’s personal property without their permission is theft plain and simple.
The idea was amended to focus on punishing the wealthy (those with over €100,000 in deposits) leaving those with less than €20,000 in deposits unscathed. The Cyprus parliament voted against this proposal, but the mere fact it was EVEN suggested (and that Germany and the IMF wanted to take 40% of deposits) should leave everyone terrified.
Again, political leaders proposed simply TAKING money from the people to fund a bank bailout… not the people as in the public’s balance sheet for a sovereign nation, but actual savings deposits sitting in banks.
This idea should never have been even brought to the table. Savings are personal property. Declaring a bank holiday so people cannot get their money out and then trying to simply TAKE their money is STEALING. This violates the very basis of personal property at its core.
The fact this idea was even brought up indicates that the political and financial elite are growing truly desperate.
Cyprus will not be the end of this… NO, this idea will be likely spreading in the future. Both New Zealand and Spain have already hinted at adopting similar policies. These ideas will be sold to the public as “well, we can take 7% and the bank remains afloat OR you can lose everything.” And during an extreme enough crisis, people will go along with it.
But get ready because this will be coming to a country near you. Are YOUR savings safe?
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