One of the Most Under-reported Stories of the Decade

Submitted by kvaughn on Sun, 03/17/2013 - 17:37

Benghazi at least received some reporting. Cypress is nearly as an important of an event and so far it is receiving hardly any press (Kudos to the Blaze and Drudge for having it as a high priority story, and amazingly the NYT and CBS for having it as a minor story; it is not even on the front pages of Fox, NBC, or ABC) 

In short, The EU has directed Cypress to confiscate up to 9.9% of the value of bank accounts in exchange for receiving its next bailout. To be fair, when you are a debtor, you have few choices, so I am not really taking sides on whether this is "right" or "wrong", I am merely pointing out how significant it is that the government of any country has literally overnight announced that it would confiscate funds like this. This is a MAJOR change in the rules of finance. Granted, their Parliament is going to meet Monday to decide whether or not they will go forward with this confiscation, but the mere serious proposal will have long-lasting effects on the worldwide financial markets...

Think about it. If you lived in Cypress, and you have your money confiscated on Tuesday, are you going to trust the banks anymore? Even if the Parliment refuses the EU mandate, would you leave your money in the bank? I think not.

What if you live in Greece instead? You have to be thinking that your next on the chopping block. Even if the EU said that it was a mistake and that they would never do this again, would you trust them? I have to think that the exodus from the Greek (and Itialian, and Spanish, etc.) banks will quickly accelerate making the situation worse than it was before. 

And how long before this logic hits the US? Note, there is no warning; to the contrary, the government reassured everyone that they specificially would not do this - until they did it. How safe is your bank account? How safe is your stock fund? How safe is your 401(k)? 

The good news is that the US is in a lot better shape than Cypress or Greece is today; but when this coincides with Boenher and even Ryan coming out and saying that we don't have a debt crisis, it will not be long until the options that we have left will disappear. We have years before the crisis comes to fruition - but don't be surprised when it comes and don't be surprised with the extreme actions that the government will take once it does come.