Monday, April 1, 2013

The Answer Is No

Finally, someone in the more or less mainstream press is publicly articulating that what happened the other day in Cyprus doesn't have to happen here, because Americans have been bailing out the FedGov via the Fed since 1913. They just don't quite realize it:
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 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. When the federal government spends far beyond the tax revenues it has, it gets the extra money by selling bonds. The Federal Reserve has become the biggest buyer of these bonds, since it costs them nothing to create more money. This new money buys just as much as the money you sacrificed to save for years. More money in circulation, without a corresponding increase in output, means rising prices. Although the numbers in your bank book may remain the same, part of the purchasing power of your money is transferred to the government.

Is that really different from what Cyprus has done?
Financially aware / literate Americans realize that inflation, either the government's official inflation rate, or the actual, much higher figure , stands somewhere between 5-10% annually. This is equivalent to half a Cyprus each year, year upon year, for decades. But hey, I suppose this way, the government tick gets its bailout money without spooking the host...of which in Cyprus, the government failed to secure its bailout money (moneyed Russians pulled their deposits via other means) while practically financially slaughtering the common Cypriot.


84829942-3a88-11e0-83da-000bcdcb5194 said...

Hey, if the average slave is willing to allow the govt to do this, then they DESERVE IT.

If you are such a pathetic bastard that you allow the govt to take your savings like they did in Cyprus, or the slow method of inflation like they do in America, then that is your fault.

The common man is ALLOWING the criminals in the governments to do this. There is almost no protest about any of this, except from like a very small number of intelligent and aware truth activists.

So we can blame the government for being criminals, but remember, it is the common man who votes in and supports such criminals. And then the idiots complain when the criminals they voted for commit crimes against them?

The common man is a dumb, stupid beast.

newrebeluniv said...

The problem in the Eurozone is made more complicated by the Euro. Since Cyprus doesn't own it's own money, like the USA and Zimbabwe, it can't print or inflate its way into solvency. It has to steal more openly from savers. If anything, it is this fact that will be the death of the Euro. All of those nations will want to return to Drachma, Lira, Marks and Francs so that they can pay their big socialist empire bills.

ScareCrow said...

"The common man is a dumb, stupid beast".

Odd, when you consider that women make up the majority of voters these days.

In addition to that, I love what the press is repeatedly calling "VOTER fraud"...

They should be calling it "ELECTION fraud" - since it is the election that is fraudulent and not the people voting.

But, overall, I'd say that people these days are voting for the letter next to the politicians name, and not the politicians themselves...

newrebeluniv said...

By inflating the currency, you can steal money from people who stuffed it in their mattresses too. They don't have to deposit it into banks.

Elusive Wapiti said...

"It has to steal more openly from savers. "

Don't know if you've been reading ZeroHedge lately, but a couple of days ago Tyler Durden had an article about China's newfound ability to currency-convert direct with the Aussies.

Expect more countries to follow suit.

Once the US loses the ability to outsource a portion of its inflation to other countries, the gig is up for the USG.

Elusive Wapiti said...

""The common man is a dumb, stupid beast".

Odd, when you consider that women make up the majority of voters these days."

Not odd at all. The Founders knew what they were doing when they suffraged only a portion of the population. They knew that MPAI, and I'd bet they spun in their graves when the 17th and 19th Amendments were ratified.

MarkyMark said...

What is MPAI? Care to elaborate?

Elusive Wapiti said...

Most People Are Idiots