Advancing the ideas of freedom, liberty and non-aggression

EconomyPoliticsTyranny

The Cyprus Bank Scam Continues

The situation in Cyprus is far from over, and things keep changing daily, but not for the better. This situation was grossly mishandled from the beginning, and now the options available are dwindling.

The original plan to steal the savings of bank depositors seems to have been scrapped, but then that had to be in order to stave off panic and civil unrest; maybe across much of Europe. If the Cyprus government had actually taken a percentage of bank savings from all depositors, that would have proven disastrous. But the problem has not been solved, not even temporarily.

Now, the Cyprus government has decided to keep the banks closed until next Tuesday, the 26th of March. Monday is a state holiday there, a fortunate situation for the political class, so keeping the banks closed on Thursday and Friday will allow for 5 more days to come up with some sort of bailout.

Here is the rub in my opinion. Even if a bailout comes to fruition by next week, how much confidence will be gained by the people of Cyprus and the other insolvent countries of Europe? I think little if any confidence will be evident, and that could cause massive problems regardless of any bailout solution.

The people in Cyprus have been disallowed any access to their own bank deposits, and that will continue until at least next Tuesday. So when (if) the banks open their doors, what will be the most likely scenario? What would any normal person do in such a circumstance, especially given that Cyprus is bankrupt, and any bailout will only temporarily support the same banks whose doors are now closed? The depositors will in my opinion want their money out of the banks, and right now!

There could be another bank run immediately upon the bank’s doors being reopened. That would be the prudent and sane response from any person whose savings had just been threatened by the state. So what will the Cyprus government and the defunct banking system do?

The way I see it, there are few options available to the corrupt state. If the banks don’t reopen, then chaos will ensue, and the rest of the EU will also be affected. If the banks do open on Tuesday, or on some day soon, how will they protect themselves from runs? My guess is that the banks will reopen in order to achieve some semblance of order, but I also believe that withdrawals will be very restricted and limited. The banks are insolvent, and have little (if any) money on hand, so if a large number of depositors wants to withdraw their savings, the banks would again be forced to close their doors.

Some have written off this situation in Cyprus as unimportant and minor because it is a small country, and this is only a $13 billion dollar bailout. That is a mistake in judgement in my opinion. Everyone is watching what is happening, and is waiting to see how this is handled. If it plays out the way I suspect, many around Europe and other parts of the world will take note. The fear of losing savings by direct state theft, or of losing access to that savings due to bank “holidays,” is not something that will be ignored, bailout or not.

The next few days should prove to be eyeopening, and the behavior of the citizenry of Cyprus, and the rest of Europe for that matter, should be telling! I say, bring on the bank runs, and shut them down. That will expose the fractional reserve banking scheme for what it truly is, and allow for real money to reign once again!

 

Archives

Categories