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.It just happened more slowly. Boiling the frog:
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.
One day you wash up on the beach, wet and naked. Another day you wash back out. In between, the scenery changes constantly.
Monday, March 25, 2013
USA - The Slow Motion Cyprus
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