Wednesday, March 20, 2013

A Bad Haircut, seizing bank accounts!

A bad haircut, in this case means you have been robbed. That may be the case if the government reaches in over a long weekend and steals money from your bank account. This is a horrible precedent to set, and the worst part may be how some people are letting it slip out that it would be fair, or in some way justifiable if it is only on the larger accounts. It is fine if it only impacts the savings of someone else, the savings of what they see as "the wealthy", the problem is someday they may come for you. I shudder to think what kind of world our children will live in.

Words are being pulled from the playbook of George Orwell in order to cleanse and add the illusion of respectability and order to the filthy actions of those in power. Suddenly they are using words like levy, and bank deposit tax, anything other then "theft". These bank accounts were guaranteed, but not against this. We have come to the point where governments are now comfortable with seizing accounts under the flimsy and bogus excuses. When a default occurs, whether it be in bonds, or a large institution fails, clowns in suits with badges that say regulator or authority, decide how to change the rules.

This should be viewed as a watershed event, we are entering into a new world where savings are far less safe. What we must fear is that, in a future financial crisis, retail depositors worried that some of their supposedly guaranteed accounts would be confiscated will stage bank runs, making the crisis worse. In Cyprus, the government declared a “bank holiday,” shutting banks to prevent massive withdrawals. It's the perfect irony that when the government screws up it then punishes the people who were prudent enough to have saved some money by stealing from them.

Footnote; for more on the potential of a bank run and the Euro please read my post below.

1 comment:

  1. This has resulted in a clash between the country as well as the EU, who have been demanding austerity measures to balance its book in return for financial management assistance, and putting the Greek bank in the line of fire, severely affecting its stock value