Sowell: Can It Happen Here?

Creators Syndicate ^ | March 26, 2013 | Thomas Sowell

[jazusamo]

The decision of the government in Cyprus to simply take money out of people's bank accounts there sent shock waves around the world. People far removed from that small island nation had to wonder: "Can this happen here?"

The economic repercussions of having people feel that their money is not safe in banks can be catastrophic. Banks are not just warehouses where money can be stored. They are crucial institutions for gathering individually modest amounts of money from millions of people and transferring that money to strangers whom those people would not directly entrust it to.

Multi-billion dollar corporations, whose economies of scale can bring down the prices of goods and services — thereby raising our standard of living — are seldom financed by a few billionaires.

Far more often they are financed by millions of people, who have neither the specific knowledge nor the economic expertise to risk their savings by investing directly in those enterprises. Banks are crucial intermediaries, which provide the financial expertise without which these transfers of money are too risky.

There are poor nations with rich natural resources, which are not developed because they lack either the sophisticated financial institutions necessary to make these key transfers of money or because their legal or political systems are too unreliable for people to put their money into these financial intermediaries.

Whether in Cyprus or in other countries, politicians tend to think in short run terms, if only because elections are held in the short run. Therefore, there is always a temptation to do reckless and short-sighted things to get over some current problem, even if that creates far worse problems in the long run.

[PGalt]

Socialism Is Legal Plunder - The Law; Frederic Bastiat 1801-1850

Cyprus writ large...

http://www.usdebtclock.org

DEPOPULATE socialists from the body politic. ELIMINATE the FED. DEFUSE the debacle.

live - free - republic

[Bon mots]

IF THEY TAKE MONEY OUT OF OUR ACCOUNTS LIKE THIS IT’S TO THE STREETS!!

They already are, but in the USA, they have a better, time proven method.
Inflation. In this case, it may develop into hyperinflation.

In Cyprus, they will steal the actual banknotes from depositors. They will let you keep the banknotes in the USA, but are stealing the value instead. Same thing really... you will be left with just the 'wrappers' for your money.

Just like in 1965 when they took 50% of the silver out of the coinage and in 1969 when they took the rest of the silver out... you are left with the 'bottle' that the silver once came in.

Your currency is now just the wrapper that once contained money.

In Cyprus, they took away your money - but at least it was honest.
In the USA, you will still have the banknotes, but they will be worth about the same as what a Cypriot has when this is finally over.

That is the road we are being led down.

[Rusty0604]

they had deposit insurance up to 100euros. At first they were going to break the insurance and take everybody’s money but decided to just take some of those over 100euros. I sa an interview with person there that said it was no big deal as they were under the limit. Fools!

[dynachrome]

It happens in kali-fornia. Check out this idiot business man, who twice voted for obozo, and is complaining about retro-active taxes:

http://www.freerepublic.com/focus/f-news/3000716/posts

[jazusamo]

LOL! If he really leaves CA he'll then have to see a liberal mental disorder shrink for a full recovery, I doubt it'll happen cuz he's too far gone. :-)

[TheOldLady]

Ouch! The truth hurts. It’s happening here already. I’ve finally made the connection, thanks to Dr. Sowell, between inflation and the way the government takes our wealth by making our money worth less, soon to be worthless.

[shivers] Bryan and I worked our tails off for the past 40+ years to have what we have now. We have never taken a penny from anyone. We worked and earned and paid for everything that we have by the sweat of our brows. To think that this rapacious government might just raid our accounts is a disgusting travesty, and it is not to be tolerated.

May God help us all.

[jazusamo]

Sad but true my friend.

For all of us that have worked all our lives for what we have for our retirement these shenanigans hurt us the most. We don’t have the time nor youth nor means to overcome runaway inflation.

Plotters like the turkey in the WH full well understand this but could care less, in fact he cares not for anyone but himself.

[TheOldLady]

Amen, brother. And we who have listened to him from the beginning know full well what he has been plotting (or carrying out the plots of others) since he burst upon the political scene.

Wish we really could go Galt.

Not caring about others is one mark of the extreme, sociopathic narcissist.

[roadcat]

Inflation. In this case, it may develop into hyperinflation.

Indeed. In the 1970's I hated Jimmy Carter and runaway inflation. Know the difference between Carter and Obama? I was getting from 5 to 8 percent interest on my bank deposits and CDs. Under Obama, we get 0 percent interest on our money, and still have inflation. Obama is worse.

[RipSawyer]

“After gun confiscation - all bets are off.”
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http://www.youtube.com/watch?v=MMSbQ3d0sPI

[RipSawyer]

“The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million can diagnose.”
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Apparently so, people constantly demand to know why everything costs so much and many are foolish enough to blame it on greed, it would take an essay to explore the stupidity in that. Very rarely does someone ask the proper question, why is my money almost completely worthless in the marketplace? Those who never learn to ask the right question will forever get the wrong answer.

The entire gross earnings of my parents from the day of my birth until I joined the Navy would amount to maybe one decent year’s income today in nominal terms. On the other hand my income from social security is in nominal terms equal to the income of a successful small business operator in those days.

[MrB]

Yes, it’s not that things “cost more”,
it’s that your currency is “worth less”.

That’s how I refer to the “price” of precious metals -
a dollar is worth 1/1600th oz of gold or
1/34th oz of silver.

[XenaLee]

“They could just come TAKE all your stuff and shoot you in the head.”

They did it to the ‘rich Jews’. First they demonized them, then they isolated them and rounded them up, and then they took what they wanted to take and eliminated the evidence (or tried to) by killing them.

And yeah, it could very easily happen again with this current leftist bunch in control now. Only....now...they also hate conservatives almost as much as they hate the Jews.

[MrB]

They hate Christians. Conservatives just happen to have a high correlation to Christians.