Much was made of the tiny European Union member Cyprus last week as regulators attempt to get their pound of flesh from the savings accounts of its banks, with a 10 percent tax on larger accounts.
And yet, the European Central Bank taxing citizens to pay up front for a $7.4 billion bailout of the banks still pales in comparison with the fleecing of the US depositor.
The Fed has orchestrated a massive transfer of wealth in America from the middle class and the poor to the wealthy. You could call it “Operation Reverse Robin Hood.”
Naysavers will object, “That’s outrageous!” I say, “Do the math.”
Here it is (in dollars to simplify): If a Cypriot put $1,000 in an island bank four years ago and left it there, today the saver would have a balance of $1,250. Take 10 percent off, and the saver is still up $125.
If a US middle-class family put $1,000 in JPMorgan or Citibank four years ago, the balance today would be $1,010 — less bank fees, which means it’s probably closer to a $950 balance. That’s $9.3 trillion in US deposits getting nothing in return except the warm, fuzzy feeling of bolstering the banks’ balance sheets.
It just happened more slowly. Boiling the frog:
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