The government of Cyprus is dominating the headlines at the moment, thanks to an audacious scheme to seize the savings of bank depositors. Many Americans are aghast at the situation. But is it really all that different from what the Federal Reserve does to U.S. depositors on a daily basis?
The Cyprus Conspiracy?
Cyprus isn’t the first European Union government to find itself in financial straits. However, the approach to dealing with those straits is unique. Usually, the EU provides immediate bailout money to such countries. In exchange, those countries agree to cut costs, raise taxes, and restructure debts.
This time, the EU required Cyprus to raise 5.8 billion Euros in order to receive a 10 billion Euro bailout. In order to pay for part of the bailout, the Cyprus government is effectively confiscating money from bank accounts worth more than 100,000 Euros (roughly equivalent to $129,000). Losses on those excess deposits might be as high as 40%…or perhaps even higher.
The Federal Reserve Conspiracy: Revisted?
The Cyprus seizure is theft by government, plain and simple. Ordinary Americans may find it hard to imagine this sort of thing ever happening in the U.S. But is the Cyprus Conspiracy all that different from the Federal Reserve Conspiracy? Not at all. Here’s more from Thomas Sowell at The American Spectator:
The U.S. government is very unlikely to just seize money wholesale from people’s 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 the 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…
(See the rest at The American Spectator)