If there was ever a reason to hang some banksters from the nearest light pole, you’ve now seen it:
BRUSSELS—Depositors in Cypriot banks will be hit with a one-off tax on their savings, as part of a €10 billion ($12.96 billion) bailout for the Mediterranean island from the euro zone and the International Monetary Fund.
The deal, announced early Saturday, marks the first time in the euro zone’s five-year-old financial crisis that depositors in bloc’s banks will lose money. Accounts with more than €100,000 will be taxed at 9.9%, those with less at 6.75%, raising an expected €5.8 billion for the near-bankrupt nation.
Taxed? Like hell that’s a tax. That’s direct confiscation of the funds of people who did nothing wrong!
Oh, and if you think this is something you can get around? Think again:
Mr. Sarris said the Cypriot Parliament would adopt the taxes over the weekend and the money would be extracted from accounts before banks take up business Tuesday. Monday is a public holiday.
They have blocked electronic transfers over the weekend too.
Now let’s see if the Cypriots go for it, or if there is an instant uprising.
The EU, of course, claims this is a “special situation.” Like hell it is, never mind that this is basically imposed from the outside.
And they have the balls to call it a “contribution.”
I call it what it is — theft for the purpose of “making whole” those who did wrong, while they skate on their offenses. Those who were in a regulatory role and should have put a stop to it (like Bernanke over here, or for that matter the OCC when it comes to the London Whale) while the people get screwed to the wall.
The argument for this “action” is that Cyprus, which is a whopping 0.2% of the Eurozone economy, is of “systemic importance” to the whole. Therefore when someone (or a few someones) do something outrageously risky and blow up their banks, it is the people, not the malefactors, who take it up the chute.
Now we shall see if any of the following two things happen:
- Justice is imposed by the people so-assessed.
- The people realize that this is not a “one-off” and it can happen to them — and they act in a protective fashion up front rather than take the risk (how do you spell “bank run”?)
Incidentally, everyone knows Spain (along with Italy) have a bunch of banks that are sitting on bad assets, right? And that they’ve not been written down, right? And they’re functionally insolvent, right?
Oh, and let us not forget that Cyprus just protected all the bondholders, who are allegedly behind depositors in terms of their protection in a bank’s capital structure and thus should have been wiped out before one Euro was lost by said depositors.
And what just happened in Cyprus would never happen in either of those places…. or anywhere else important, like here in the United States……. right?
PS: $100 bills in your hand have just been declared to be worth somewhere between 7-10% more than those “deposited” and “stored” in a bank. May I ask the following pertinent and rather timely question: Where are yours?