Skip to comments.Cyprus Bailout: Welcome To Another Great Depression
Posted on 03/28/2013 4:51:03 PM PDT by Lorianne
So, this is going to be a very sour reading of what has happened in Cyprus this weekend. It will also be a very partisan one, possibly even a partial one. But if Milton Friedman and Anna Schwartz were right in their insistence that it was actually the Federal Reserve that caused the Great Depression (which is something that Ben Bernanke himself has insisted that the Fed will not repeat) then one way of interpreting what has happened is that the European Central Bank has just set us all up for another Depression. The trigger is that tax of a little over 6% on all depositors.
This isnt an analysis that youll be able to get all economists to sign up to. But the basic story told by Friedman and Schwartz in A Monetary History of the United States was that the 1929 crash was indeed a serious crash. But it would not have led to the Great Depression without the Federal Reserve making some serious mistakes. Two of which were to allow the intertwined collapses of both the money supply and the banking system. Given that it is the banks that create credit and thus the wider money supply they are, to a great extent, the same thing.
(Excerpt) Read more at forbes.com ...
Yes, I do know, theyve called it a tax: but here weve got to make reference to that duck thing. The difference between a 6% or more tax on your bank deposit and a failure of the previously agreed deposit insurance to protect your deposit is quackery enough that its a duck ~~
Got Safe Haven?
If I “invest” a dollar in stocks, bonds, funds markets etc, I can gain a lot, gain a little, or lose it all.
If I park my dollar in a savings account, I will owe the bank money for monthly service fees, unless I agree to add lots of dollars, and maintain a minimum average daily balance, and notify the bank well in advance when I plan to withdraw all my money from my savings account.
So I can let a bank store my non-interest bearing money for me, for a designated monthly fee, as long as I don't store too much (anything over the FDIC limits per account)or I can let the bank play with my savings, and have them pay me a small monthly percentage for allowing them to do so.
They won't pay me very much, if anything, for allowing them to do that with my savings account.
But I don't have many other options, if I did win the lotto, and just wanted to save the money, since I am not allowed to retain or spend large amounts of cash.
But any money I put into a bank savings account is not really my money anymore, is it?
Very good article. We withdrew a significant amount of money from our account today. Not putting it back.
Thank God for internet anonymity. Be careful your local paper doesn’t find out about this. They’ll print a map to your house.
But seriously, if you are doing some off the grid thing (and I’m not telling you not to) do not tell the world about it.
Even Freepers. There are creepers amongst the Freepers.
Have you seen the writing on the wall about the safety of banks?