As news on the Great Cyprus Bank Robbery keep getting worse, the latest being the country’s corrupt finance minister Michael Sarris saying that as much as 80% of “large” bank deposits can be confiscated, Americans should be on the alert to copycat moves by our feral government and bankers. All the more because the American Left are applauding the theft of Cypriots’ bank savings.
Tyler Durden of ZeroHedge warns us that when bankrupt insolvent governments “run out of fingers to plug the dikes,” history shows that they fall back on a very limited playbook.
Simon Black of Sovereign Man blog has enumerated 8 steps in the playbook of bankrupt governments:
1. Direct confiscation: As Cyprus showed us, bankrupt governments are quite happy to plunder people’s bank accounts, especially if it’s a wealthy minority. Aside from bank levies, though, this also includes things like seizing retirement accounts (Argentina), increases in civil asset forfeiture (United States), and gold criminalization.
2. Taxes: Just another form of confiscation, taxation plunders the hard work and talent of the citizenry. But thanks to decades of brainwashing, it’s more socially acceptable. We’ve come to regard taxes as a ‘necessary evil,’ not realizing that the country existed for decades, even centuries, without an income tax. Yet when bankrupt governments get desperate enough, they begin imposing new taxes… primarily WEALTH taxes (Argentina) or windfall profits taxes (United States in the 1970s).
3. Inflation: This is indirect confiscation– the slow, gradual plundering of people’s savings. Again, governments have been quite successful at inculcating a belief that inflation is also a necessary evil. They’re also adept at fooling people with phony inflation statistics.
4. Capital Controls: Governments can, do, and will restrict the free-flow of capital across borders. They’ll prevent you from moving your own money to a safer jurisdiction, forcing you to keep your hard earned savings at home where it can be plundered and devalued. We’re seeing this everywhere in the developed world… from withdrawal limits in Europe to cash-sniffing dogs at border checkpoints. And it certainly doesn’t help when everyone from the IMF to Nobel laureate Paul Krugman argue in favor of Capital Controls.
5. Wage and Price controls: When even the lowest common denominator in society realizes that prices are getting higher, governments step in and ‘fix’ things by imposing price controls. Occasionally this also includes wage controls… though wage increases tend to be vastly outpaced by price increases. Of course, as any basic economics textbook can illustrate, price controls never work and typically lead to shortages and massive misallocations.
6. Wage and Price controls– on STEROIDS: When the first round of price controls don’t work, the next step is to impose severe penalties for not abiding by the terms. In the days of Diocletian’s Edict on Prices in the 4th century AD, any Roman caught violating the price controls was put to death. In post-revolutionary France, shopkeepers who violated the “Law of Maximum” were fleeced of their private property… and a national spy system was put into place to enforce the measures.
7. Increased regulation: Despite being completely broke, governments will dramatically expand their ranks in a last desperate gasp to envelop the problem in sheer size. In the early 1920s, for example, the number of bureaucratic officials in the German Weimar Republic increased 242%, even though the country was flat broke from its World War I reparation payments and hyperinflation episode. The increase in both regulations and government officials criminalizes and/or controls almost every aspect of our existence… from what we can/cannot put in our bodies to how we are allowed to raise our own children.
8. War and National Emergency: When all else fails, just invade another country. Pick a fight. Keep people distracted by working them into a frenzy over men in caves… or some completely irrelevant island.
~Eowyn