The government is saying “We guarantee bank deposits!”, BUT there will be a tax of 5-10% on bank deposits, making the guarantee meaningless.
Under pressure from several members of the eurozone – Germany in particular, if reports are accurate – the new Nicosia government agreed that deposits above 100,000 euros would be taxed 9.9 percent and those under 100,000 at a rate of 6.75 percent.
Some pro-State troll might say “HAHAHA!! This could never happen in the USA!” Actually, this did happen in the USA, except the tax was a lot more than 10%! Bank deposits pay 0% interest, while real inflation is 20-30% a year or more. When the government and Federal Reserve print new money to bail out banksters, that effectively is a tax on bank deposits. It isn’t an explicit tax. Inflation is a tax. In the USA, bank deposits are “guaranteed”, but the government will steal your purchasing power via inflation.
In the USA, the government can always print new money to prevent a default on bank deposits. Instead of an explicit default, it’s an indirect default via inflation. Why doesn’t Cyprus do the same thing?
Cyprus is a member of the EU. Cyprus does not control its own monetary system like the USA. Cyprus can’t bail out banks via inflation, because Cyprus is no longer sovereign. By joining the EU, Cyprus effectively ceded its sovereignty to the EU. The “deposit tax” is imposed by the EU, as a condition for receiving a bailout. Instead of robbing Cyprus depositors indirectly via inflation, Cyprus depositors will be explicitly robbed.
Incidentally, that’s one of the pro-State troll arguments against a gold standard. With gold as money, you can’t have inflation-financed bailouts, making bankster theft more obvious. Each gold standard “failed” when the government inflated to bail out banks, and then abandoned its fractionally-backed gold monetary system. The “free market” ruined the gold standard, as people rushed to redeem their inflating paper with gold, anticipating a default. The “free market” is blamed, while the gold standard was really ruined by fractional reserve banking and bank bailouts.
What’s the conspiracy theory? If Cyrpus bank depositors lost $20B, SOMEONE ELSE MADE $20B. In all the articles I read, that question was not asked. “What were Cyprus banks investing in, that they lost $20B?”
Another amusing bit is that Cyprus is an offshore tax haven for rich people. It defeats the purpose of having an offshore tax haven, if the bank can steal your deposit!
In the USA, banks can always be bailed out via inflation. Cyprus no longer controls its own monetary system, so depositors must be explicitly robbed to finance the bailout. There’s one gaping hole in all the articles I read. What were Cyprus banks investing in? If Cyprus depositors lost $20B, someone else made $20B. Where did the money go? Why are no mainstream media articles asking this question?