It Can’t Happen Here?
Cyprus: The Great Bank Robbery
The news from Cyprus is disturbing to say the least. For those who don’t know, Cyprus just secured one of those infamous bailouts… at a price. The catch is that anyone who has a bank account that holds over 100 000 euros will have their money taken directly out of their account (as much as 40%) to service the debt this bailout has created. Now (full disclosure), I’m all for taxing the rich. As one mulit-millionaire put it in a banned Ted talk, taxing the rich is what creates jobs, since the rich only buy so much despite their wealth. The middle class are what create the jobs, because they spend money, and there are more of them. This increases demand, thus increasing the need for jobs. The middle class only flourishes when the tax burden is lessened by those with money paying their fair share. But not like this.
This abomination in Cyprus is a sign of things to come over here at home. The international bankers, who swindled the Greeks, the Irish, the Spanish, and the Italians among others have set a precedent. The International Monetary Fund, who support bank bailouts as a legitimate cure to a financial crisis created by those very banks, has set a precedent. The governments of all the afore-mentioned countries, but especially the government of Cyprus, have set a precedent.
The precedent is this: a bunch of rich, irresponsible gambling addicts lost their shirts gambling on the stock market. And the people get to pick up the tab. And if the people protest, “Hey, I didn’t make those stupid bets! Why should I pay for your gambling debt?” they won’t have any recourse because the money will disappear right out of their bank accounts. They say this is designed to get money back from Russian mobsters. But mobsters don’t have 100 000 euros in the bank. They have millions. Anyone who hacks into your bank account and takes your money is a thief, and therefore a felon, who should be imprisoned.
We in Canada are not safe from this. We love our debit cards here in North America. And why not? They’re convenient, take up less space, and getting faster every day. However, as long as we use them, our money exists in the form of ones and zeroes. It takes only the click of a mouse to turn those ones and zeroes into zeroes… if the wrong person gets access. In Cyprus they have. If we in Canada wind up in a similar economic mess, they will here, too.
Think it can’t happen here? Think this country is doing well financially? Think our government’s supposed system of checks and balances would prevent such an atrocity? Don’t think your bank would do anything that dishonest and blatantly criminal? That’s what people thought about Europe five years ago.
Benjamin Longshot McFee
In my last article, “Cyprus: The Great Bank Robbery”, I mentioned that the fiasco in Cyprus was likely to happen here, but mentioned no specifics, because at the time, this was just an educated guess.
Yesterday, my suspicions were confirmed. The Toronto Star published an article that stated that “Two weeks ago, [Finance Minister Jim] Flaherty quietly served notice in his budget that Ottawa is preparing a new set of what it called bail-in rules that it could impose should one of the country’s big banks face collapse.”
You can read the article here:
Toronto Star: Flaherty’s Cyprus-style Bank Rescue Plan
And they’re not just going after bank accounts with over $100,000 this time, because the wording used was “unspecified amounts”. Basically, whatever they want. All that is needed now, is a financial crisis. But “Wait!” you say. “Our banks didn’t flounder in 2008 because they were still regulated, unlike the ones in the States or the E-U” Our banks might have been regulated (Harper and his buddies failed at de-regulating them, but believe me, they tried) but if you read MacLean’s you will know that banks aren’t the only looming crisis. We’re still facing a major housing bubble here in Canada.
So there you have it. It’s not “going to happen here,” as I thought previously. It’s happening already.
Benjamin Longshot McFee
April 5th, 2013