The parliament of Cyprus today said a big ΟΧΙ! – Ochi! – NO! – to the European Union’s demand to tax bank demand deposits for tribute. But by even thinking of such a step, the EU and the government of Cyprus have done damage neither side can repair. They have broken faith with every man, woman and child who has “money in the bank,” whether that bank be in Cyprus, or elsewhere in Europe, or here in the United States of America.
The latest Cyprus vote
The parliament of Cyprus agreed to vote today on whether to accept a bailout of 10 billion euros. (That’s billion as in thousand million.) The European Central Bank offered this loan last week, but under harsh terms: they must raise €5.8 billion from “one-time” bank deposit taxes. The tax rates would be 6.75 percent of all deposits less than €100,000, and 9.9 percent of all deposits of €100,000 and higher.
These terms enraged the people of Cyprus. They rushed to withdraw their funds. The government closed the banks. The people then lined up at Automatic Teller Machines all over Cyprus. Eventually those machines ran out of cash. And in Nicosia (the capital city) and all major cities, the people took to the streets and picketed. They painted the English word NO in Roman letters on their palms and thrust them forward, while shouting in Greek:
Which you pronounce:
Hastily, several Members of Parliament proposed a compromise:lower or drop the rate on lesser deposits and raise the rate on greater deposits. Other commentators (including many in the United States) tried to argue in favor of the deposit levy. The argument ran thus:
The biggest depositors happen to be some of the very elitists who made this problem. Some are Russian Mafia, or Russian corporatists hoping to swoop in and buy up Cypriot oil resources. The government ought to confiscate all their funds!
That argument did not convince average depositors on Cyprus. Nor did it convince money watchers in the United States. Franklin Sanders, a veteran gold-price watcher, said:
Weekend events in Cyprus shows that the rule of law is stone cold dead. Let the potential victims beware! To bail out the banks, the government is stealing 9.9% of every depositor’s account. You go to bed with $10,000 balance, wake up with $9,010. The banks now possess all. What’s theirs is theirs, and what’s yours is theirs, too. Weekend surprise party, as usual.
As a sop to the victims, they receive worthless shares of stock in their bankrupt bank. Of course, that only adds insult to injury.
Don’t be drawn off point by the inevitable bank propaganda claiming much of the money stolen was owned by evil Russians oligarchs. What difference does that make? Because you consider someone “evil” you are empowered to steal from them? Besides, if banks and their running-dog governments can steal from evil Russian oligarchs, they will steal from you, too, as we already see.
Today, reports from The New York Times, The Washington Post, and Reuters told the latest: the parliament of Cyprus voted No. In fact, the vote was zero to thirty-six, with nineteen abstentions and one absence.
The damage lingers
Ra’aid (Major) Adrian Short of the Sultan of Oman’s Army, in Cyprus in 1974. Photo: Brian Harrington Spier, CC BY-SA 2.0 Generic License
But this does not repair the damage. By even considering such a levy, the European Union has dropped a key pretense of the banking system: that the money a bank holds in a demand deposit in your name is yours, and the bank may not release it to anyone without instructions from you and you alone. The only exception to this is if the government goes to court to “freeze” the account, or to place a lien on it. A lien classically means you may not sell or draw down on an asset unless someone else (called the lienholder) says you may.
The European Union demanded something worse than any lien: they ordered the government to seize part of those assets directly. In the United States, that would be called a bill of attainder.
Thankfully, the parliament of Cyprus refused. But that might not stop the European Union, or the United States government, from ordering something like that somewhere else. Including here in the USA.
Said Franklin Sanders:
You know, if I was an Italian or Spaniard with any money at all in a bank, I would look at Cyprus and easily picture a target painted on my chest. Hadn’t y’all rather hold gold and silver in your hand than electrons in a Spanish or Italian Bank? Mercy, I’d rather hold gold and silver than electrons in a New York bank!
He’s not alone. Gold closed at $1604.60 yesterday. This morning it fell as low as $1601, then started to rise again. At 11:00 a.m. EDT, the price of gold stood at $1615. That was when the Prime Minister of Cyprus tried to put off the vote, and the Finance Minister resigned. This afternoon, Parliament finally met to vote – No. But at last report, gold is trading at $1612.28, a fallback of a paltry $3 US.
Here in America, hyper-alert “Patriots” are “preparing” for total economic and social collapse, and civil war. They remember that Franklin Delano Roosevelt called in gold. More to the point, they see the Department of Homeland Security:
- Buying 1.6 billion rounds of ammunition.
- Deploying Iraq War Marine surplus light tanks “to serve high-risk warrants.” (Today on illegal alien gangsters. But tomorrow…!)
This while the United States Senate tries to take people’s guns away. (The latest: the Senate will wait for Dianne Feinstein to offer her “assault weapons ban” as an amendment on the floor.)
The canary in the mine got a breath of fresh air. But the mine is still full of lethal gas. And everybody knows it.