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Cyprus: Can It Happen Here?
national Review ^ | 03/26/2013 | Thomas Sowell

Posted on 03/26/2013 8:32:27 AM PDT by SeekAndFind

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.

Multibillion-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 that are not developed, either because they lack 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. Seizing money that people put in the bank would be a classic example of such a short-sighted policy.

After thousands of American banks failed during the Great Depression of the 1930s, there were people who would never put their money in a bank again, even after the Federal Deposit Insurance Corporation was created, to have the federal government guarantee individual bank accounts when the bank itself failed. For years after the Great Depression, stories appeared in the press from time to time about some older person who died and was found to have hidden substantial sums of money under a mattress or in some other place because they never trusted banks again.

After going back and forth, the government of Cyprus ultimately decided, under international pressure, to go ahead with its plan to raid people’s bank accounts. But could similar policies be imposed in other countries, including the United States?

One of the big differences between the United States and Cyprus is that the U.S. government can simply print more money to get out of a financial crisis. But Cyprus cannot print more euros, which are controlled by international institutions.

Does that mean that Americans’ money is safe in banks? Yes and no. The U.S. government is very unlikely to just seize money wholesale from people’s bank accounts, as is being done in Cyprus. But does that mean that your life savings are safe? No. There are more sophisticated ways for governments to take what you have put aside for yourself and use it for whatever politicians feel like using it for. If they do it slowly but steadily, they can take a big chunk of what you have sacrificed for years to save before you are even aware, much less alarmed.

That is in fact already happening. When officials of the Federal Reserve System speak in vague and lofty terms about “quantitative easing,” what they are talking about is creating more money out of thin air, as the Federal Reserve is authorized to do — and has been doing in recent years, to the tune of tens of billions of dollars a month.

When the federal government spends far beyond the tax revenues it has, it gets the extra money by selling bonds. The Federal Reserve has become the biggest buyer of these bonds, since it costs them nothing to create more money.

This new money buys just as much as the money you sacrificed to save for years. More money in circulation, without a corresponding increase in output, means rising prices. Although the numbers in your bank book may remain the same, part of the purchasing power of your money is transferred to the government. Is that really different from what Cyprus has done?

— Thomas Sowell is a senior fellow at the Hoover Institution


TOPICS: Business/Economy; Foreign Affairs; Germany; Government; Israel; News/Current Events; Russia; United Kingdom
KEYWORDS: banking; bankrun; cyprus; cypruscrisis; europeanunion; germany; govtabuse; greece; israel; russia; turkey; tyranny; unitedkingdom

1 posted on 03/26/2013 8:32:27 AM PDT by SeekAndFind
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To: SeekAndFind
Wake up, people. It's already happening here. Except instead of raiding our bank accounts and stealing dollars, they simply steal the value of those dollars instead.

The groceries you could purchase with $100 back in 2008 now requires $140. So 30% of the value of your $100 has been stolen from you by a government who prints up new money and then gives that money to others in the form of food stamps.

At least in Cyprus, they are being up front about what they are doing. But here, they go after the middle class while the upper classes exchange their dollars for investments that will retain their value.

Reparations are here already. Redistribution is here already. Yet we are too stupid to realize it.

2 posted on 03/26/2013 8:44:53 AM PDT by Hoodat (I stand with Rand.)
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To: Hoodat

This article says “unlikely” to seize bank accounts, but what about IRA’s? THAT’S what they’re going to turn to!


3 posted on 03/26/2013 8:49:06 AM PDT by Obama_Is_Sabotaging_America (PRISON AT BENGHAZI?????)
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To: Obama_Is_Sabotaging_America

Just exactly how are they going to seize our IRA’s?

I’d like to know what method they plan...


4 posted on 03/26/2013 8:50:29 AM PDT by SeekAndFind
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To: SeekAndFind

Yet again another article from the National Review that is a little SHORT ON FACTS, And I like Thomas Sowell. But, here is what they are not telling you:

President Obama and the United States Treasury Dept are in Complete Control and in charge of Decision making at the IMF, this is OUR GOVERNMENTS PLAN being implemented in a Foreign Country.


5 posted on 03/26/2013 8:54:37 AM PDT by eyeamok
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To: SeekAndFind

There is already talk of changing 401k’s and how they are taxed (currently not taxed until you take it out). That is how I think our government could go after our savings. Other than the aforementioned method of devaluing our current buying power.


6 posted on 03/26/2013 8:55:13 AM PDT by Old Teufel Hunden
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To: SeekAndFind

The Hoover Institution is a vile organization.

Antony Sutton was at the Hoover Institution years ago but was not allowed to continue giving up the secrets of new world order international banking.

Mr. Sowell is an intelligent man, but is careful to not “wander off the reservation” of international banking money.

The Hoover Institution is one of the organizations that new world order uses its public face to present big monopolistic money, capital, banking, etc., as being “conservative” and “free market”.

But they conveniently always slip in the notion that “creating money out of thin air” is preposterous. This keeps public opinion - amongst conservative and small business types - decidely against having the Treasury reassert its right to be the sole creator of dollars and give the central bank Fed the heave ho. And if somehow the Fed is nixed, new world order has therefore set up public opinion in the financial community to require the Treasury to go buy gold from international banking every time it wants to print dollars, thereby continuing the dependence of government on them (dealers in gold for centuries).

If you do a little reading on Hoover and its namesake, you’ll find new world order. Hoover wiped history clean of much of nwo 20th century operations, and the financing behind the “cleanup” has never been published. Hoover Institution is sitting on a lot of information damaging to nwo.


7 posted on 03/26/2013 8:55:31 AM PDT by PieterCasparzen (We have to fix things ourselves)
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To: Hoodat

The cat’s out of the bag now. It’s just a matter of time.


8 posted on 03/26/2013 8:56:39 AM PDT by Brownie63
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To: Obama_Is_Sabotaging_America; SeekAndFind

It won’t be an overt seizure in either case.

In the case of taking your savings, they’ll do it the sneaky way - inflation. They’re doing that to the tune of $85 billion in printed money per month.

Now, with the 401k’s & IRA’s, the way to “seize” those would be to disallow a “cash” option and provide the next “safer” option in gov’t bonds.

They’ll eventually be “forced” to be more overt,
but until then they’ll avoid exposing themselves as the thieves they are.


9 posted on 03/26/2013 8:57:46 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: SeekAndFind

We’ll have a 1% bank transaction fee first,,, imho


10 posted on 03/26/2013 8:58:45 AM PDT by ▀udda▀udd (>> F U B O << "What the hell kind of country is this if I can only hate a man if he's white?")
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To: SeekAndFind

Warning to all: the Cyprus story is being flagellated in the news to guage public response to the bank account confiscation.

Do you all hear this ?

This is a test.

Remember, ownership - and the ability to enforce one’s ownership rights - is the key to maintaining wealth.

An account can be seized by the government.


11 posted on 03/26/2013 8:59:54 AM PDT by PieterCasparzen (We have to fix things ourselves)
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To: SeekAndFind

Any sort of fund that relates to retirement (IRA, 401k, company pension, railroad retirement, etc.) Will be rolled into social security, for your own good of course. The government knows that you aren’t capable of planning your own retirement, so they’ll take your funds, and put them in a lockbox, to be doled out to you according to your fair share. Oh, and they’ll allow the fed reserve to “tap” those funds to use at their discretion, because they know how to manage it better. But it doesn’t really matter, because under obamacare, you probably won’t live long enough to collect a pension anyhow, unless you’re an undocumented immigrant, government employee, or an executive for a financial institution.

Don’t believe me? Just see Argentina as an example.


12 posted on 03/26/2013 9:05:15 AM PDT by factoryrat (We are the producers, the creators. Grow it, mine it, build it.)
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To: Hoodat

I’ve realised it for a while. I only put money in my personal banking account as needed to pay for things. Otherwise the minimum amount to keep the account is all that sits there.


13 posted on 03/26/2013 9:05:48 AM PDT by mrsmel (One Who Can See)
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To: MrB

Exactly, and that won’t set well with day traders growing their IRA’s or others who invest heavily in tech stocks, etc.. That’s EXACTLY what they’ll do, force investments into government bonds.


14 posted on 03/26/2013 9:07:33 AM PDT by Obama_Is_Sabotaging_America (PRISON AT BENGHAZI?????)
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To: Obama_Is_Sabotaging_America

If you have an IRA, or a 401k with a previous employer,

you should covert to a self-directed IRA.
http://www.fool.com/investing/ira/2009/01/08/why-you-need-a-self-directed-ira.aspx

And this self-directed IRA should be invested in an investment LLC that invests in hard assets.
And this LLC needs to be managed by YOU.

http://www.opencurrency.com/ira_misconceptions/


15 posted on 03/26/2013 9:13:17 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: SeekAndFind
The economic repercussions of having people feel that their money is not safe in banks can be catastrophic.

The productive role of financial institutions is to promote the investment of savings, and the efficiency of the investment of savings, as well as the overall degree of saving, and thereby, to raise the demand for and productivity of labor and the general standard of living.

The absence of the security of savings in financial institutions would mean that to an important extent individuals who have extra funds would lose the incentive to put those funds into the bank as savings, which would decrease investment. Instead, individuals in such a position, would thus have no alternative but to hold their savings in the form of hoards of money or accumulations of consumers' goods, such as jewelry, housing, and works of art. The consequence would be that their savings would not serve to make possible a demand for capital goods or for labor, The result of the lesser demand for capital goods would be that the extent to which the economic system concentrated on the production of capital goods would be correspondingly less. And thus, the ability to achieve a production of capital goods sufficient to make possible capital accumulation would be correspondingly less. The effect would almost certainly be economic stagnation at an extemely low level of productivity of labor.

The standard of living of the average worker would also suffer from the fact that savings that are hoarded or held in the form of accumulations of personal consumers' goods do not contribute to the demand for labor and the payment of wages, as do saving that are invested

16 posted on 03/26/2013 9:14:59 AM PDT by mjp ((pro-{God, reality, reason, egoism, individualism, natural rights, limited government, capitalism}))
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To: factoryrat
The government knows that you aren’t capable of planning your own retirement, so they’ll take your funds, and put them in a lockbox, to be doled out to you according to your fair share.

I have said this to people and they scoff. When I ask why they think a government filled with people who don't think we can handle the amount of soda pop we order, whether we can defend ourselves with guns, whether supermarkets can give us plastic bags for our purchases, etc. would not also find us incapable of handling our retirement accounts...the light bulb goes off. Liberals wave their hands and walk away, but reasonable people see the point and admit it.

I've heard it said that there would be pitchforks and torches in the streets if they "assumed control" of the 401Ks. I'm not so sure...so many of our fellow citizens have become comfortable with the government being their nanny. The last election seemed to say that.
17 posted on 03/26/2013 9:16:49 AM PDT by LostInBayport (When there are more people riding in the cart than there are pulling it, the cart stops moving...)
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To: Hoodat
exactly ... printing or digitalizing 85 billion a month is like taking your dollar savings by dilution ... and if you think anyone will lift a finger just ask the bondholders from General Motors

.

18 posted on 03/26/2013 9:22:07 AM PDT by Elle Bee
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To: SeekAndFind

Here is one thought that got some air couple months ago....

http://www.rushlimbaugh.com/daily/2012/11/29/details_the_plan_to_steal_your_401_k

If you don’t trust Rush, google your preferred purveyor.


19 posted on 03/26/2013 9:25:30 AM PDT by Adder (No, Mr. Franklin, we could NOT keep it.)
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To: SeekAndFind

It will happen here (again). They will find a way to steal from accounts while calling it something that sounds nice and harmless. It will be too complex for the average American to understand, and so the fascists in Washington will get away with it.


20 posted on 03/26/2013 9:34:28 AM PDT by I want the USA back (Pi$$ed off yet?)
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To: SeekAndFind

“Cyprus: Can It Happen Here?”


If it does then just how many 7 round magazines will it take in NYS to retrieve OUR money?


21 posted on 03/26/2013 9:46:29 AM PDT by Wurlitzer (Nothing says "ignorance" like Islam!)
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To: SeekAndFind

Why can’t it be both? Inflation until confiscation. Inflation works fine until something BIG happens. Inflation until the EU banks run and collapse “forcing” US to “do something”. Just because they are opting for inflation now does not mean they will not confiscate later under the right conditions.


22 posted on 03/26/2013 9:50:08 AM PDT by 1malumprohibitum
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To: MrB
And this self-directed IRA should be invested in an investment LLC that invests in hard assets.

I've been thinking of doing this. I've been thinking of buying two rental properties outright with the cash I've got in an old 401k and IRA. How difficult is it to do? Would it get the attention of the IRS? I really don't want to go through another audit.

23 posted on 03/26/2013 9:55:38 AM PDT by old and tired
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To: PieterCasparzen
If you do a little reading on Hoover and its namesake, you’ll find new world order..

Besides working with the Globalist Banksters to usher in the Great Depression and FDR, Hoover also ran the Commission for Relief in Belgium which was a front for the Banksters to funnel supplies to Germany to prolong WWI. Sort of how today Uncle Scam funnels supplies to our supposed Al Qaeda enemies.

24 posted on 03/26/2013 9:56:44 AM PDT by Count of Monte Fisto
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To: Hoodat
Wake up, people. It's already happening here. Except instead of raiding our bank accounts and stealing dollars, they simply steal the value of those dollars instead.

You don't get it. It's not enough to satisfied those in government or their lottery style government retirement pensions. They want more of what ya got, and they'll get it.

25 posted on 03/26/2013 9:59:42 AM PDT by dragnet2 (Diversion and evasion are tools of deceit)
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To: MrB

We have our IRA’s in our credit union. Will the CU be treated differently than the banks?


26 posted on 03/26/2013 10:11:20 AM PDT by raisincane (November 6, 2012 - I'm announcing my retirement at work; becoming a taker.)
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To: Count of Monte Fisto

Yep.

His real start in life was with nwo; as a young man he was a geologist hooked up with British mining interests (nwo).

British colonial interests were all financed by nwo banking.


27 posted on 03/26/2013 10:12:09 AM PDT by PieterCasparzen (We have to fix things ourselves)
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To: MrB

If the commies do try to come after IRAs etc, with forced government bond conversion schemes, a lot of people would panic and withdrawals would spead to stocks bonds, and deposits. Converting massive amounts of pension funds to treasuries would also tank the market; most pension funds are invested in stocks and bonds of various types which means a massive sell off for most publically traded companies.
Any whiff of this crap means a run to the exits.


28 posted on 03/26/2013 10:21:24 AM PDT by grumpygresh (Democrats delenda est.)
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To: SeekAndFind

Of course a Cyprus situation can happen here . . . the political class for some time has been contemplating the elimination of tax-favored retirement accounts, and retroactively imposing taxes on those accounts which to date have enjoyed deferrals for a one-time revenue boost.


29 posted on 03/26/2013 10:45:05 AM PDT by AtlasStalled
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To: old and tired

I’m in the middle of investigating it. I’d say I’m about 2/3 of the way to pulling the trigger.
As for the IRS, this, if done right, is absolutely legal, but they obviously don’t want you to do it, so they’ll never tell you that it’s OK if you ask them, but they won’t tell you you can’t, either.

Read the Rob Gray article:
http://www.opencurrency.com/ira_misconceptions/

Listen to the interview with Rob Gray here:
http://www.thesurvivalpodcast.com/gray-on-holding-silver-in-self-directed-iras

Google “checkbook IRA” and read the articles.

And I’ll “short circuit” you on my research, giving you a head start - I’m going to use “iraservices.com” as my custodian. They have the requirements on their website.


30 posted on 03/26/2013 11:15:38 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: MrB
And I’ll “short circuit” you on my research, giving you a head start - I’m going to use “iraservices.com” as my custodian. They have the requirements on their website.

Thank you.

31 posted on 03/26/2013 11:20:05 AM PDT by old and tired
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To: grumpygresh

That’s why they’re quietly making gov’t bonds the default choice...


32 posted on 03/26/2013 11:20:39 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: SeekAndFind
Thomas Sowell missed three extremely important points in his article. Unfortunately, none of these points will produce any confidence in the American banking system.

Point One: America has already suffered the direct seizure of private financial instruments. Prior to 1932 American Citizens could own gold and silver bullion and coins and many did so. But Executive Order 6102, issued by FDR 5 April 1933 changed that. By 1 May 1933, 25 days later, everyone had to take their legally obtained and privately owned gold and silver coins, bullion and certificates to the Federal reserve in exchange for federal Reserve notes. If you didn't you could have been charged under a World War I statue (Trading with the Enemy - 1917) and either fined up to $ 10,000 (in 2010 dollars that was $ 180.0000)or/and 10 years in prison. Yes, everyone got $ 20.17 per ounce of gold (bullion, coin, or certificate paid in Federal Reserve notes. Wikipeda (who I quoted above) implies most owners of gold and silver immediately transferred their property to Switzerland.

If it happened once as a result of a sustained financial crises (3 years long at FDR's election) what makes anyone think it will not happen again?

Second. Wikipeda reported that the nation with the longest periods of bank closures, to prevent a "run" on the bank, from 1932 to 2008 was the US. We had 8 of the longest lasting bank closers. We are talking periods of time when the banks just lock their doors and suspend all financial operations.

Third. Recently the US banking industry suffered the impact of using private accounts to cover institutional losses. Remember MF Global in 2008/2009? We are still working through our national recovery from that series of events some 5 years later. I fully expect it to take another 5 years before we can start calculating that final bill.

Bottom line folks - it has happened here, in the US, in both the mid-term past (our grandparents) and immediate past (within 2 Presidential elections) and there is absolutely no guarantee that it will not happen again.

33 posted on 03/26/2013 11:54:58 AM PDT by Nip (BOHEICA and TANSTAAFL - both seem very appropriate today.)
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To: mjp

bttt


34 posted on 03/26/2013 4:33:57 PM PDT by petercooper
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To: SeekAndFind

House discusses 401k/IRA confiscation

Submitted by midtowng on November 7, 2008 - 4:04pm

This shouldn’t surprise anyone who watched what happened to Argentina in 2001. Eventually the government is going to do this.

Democrats in the U.S. House have been conducting hearings on proposals to confiscate workers’ personal retirement accounts — including 401(k)s and IRAs — and convert them to accounts managed by the Social Security Administration.
Triggered by the financial crisis the past two months, the hearings reportedly were meant to stem losses incurred by many workers and retirees whose 401(k) and IRA balances have been shrinking rapidly.

...
GRAs would guarantee a fixed 3 percent annual rate of return, although later in her article Ghilarducci explained that participants would not “earn a 3% real return in perpetuity.” In place of tax breaks workers now receive for contributions and thus a lower tax rate, workers would receive $600 annually from the government, inflation-adjusted. For low-income workers whose annual contributions are less than $600, the government would deposit whatever amount it would take to equal the minimum $600 for all participants.

In a radio interview with Kirby Wilbur in Seattle on Oct. 27, 2008, Ghilarducci explained that her proposal doesn’t eliminate the tax breaks, rather, “I’m just rearranging the tax breaks that are available now for 401(k)s and spreading — spreading the wealth.”

All workers would have 5 percent of their annual pay deducted from their paychecks and deposited to the GRA. They would still be paying Social Security and Medicare taxes, as would the employers. The GRA contribution would be shared equally by the worker and the employee. Employers no longer would be able to write off their contributions. Any capital gains would be taxable year-on-year.

Analysts point to another disturbing part of the plan. With a GRA, workers could bequeath only half of their account balances to their heirs, unlike full balances from existing 401(k) and IRA accounts. For workers who die after retiring, they could bequeath just their own contributions plus the interest but minus any benefits received and minus the employer contributions.

Another justification for Ghilarducci’s plan is to eliminate investment risk. In her testimony, Ghilarducci said, “humans often lack the foresight, discipline, and investing skills required to sustain a savings plan.” She cited the 2004 HSBC global survey on the Future of Retirement, in which she claimed that “a third of Americans wanted the government to force them to save more for retirement.”

http://www.economicpopulist.org/content/house-discusses-401kira-confiscation


35 posted on 03/26/2013 4:39:37 PM PDT by EBH ( American citizens do not negotiate with political terrorists.)
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To: eyeamok
President Obama and the United States Treasury Dept are in Complete Control and in charge of Decision making at the IMF, this is OUR GOVERNMENTS PLAN being implemented in a Foreign Country.

You might be right about that. Read or heard somewhere that the Federal Reserve and the European Central Banks have a lot of cross ownership. They are also well connected by relatively ancient modern family lines. So that was why we bailed out the European Banking system ? We were really bailing out the Federal Reserve and its homies.

36 posted on 03/26/2013 10:24:09 PM PDT by justa-hairyape
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