Economics, International economy

EU, ECB, and IMF: The Three Amigos rob depositors

Image Credit: Shutterstock

Image Credit: Shutterstock

Last night the Three Amigos pulled off a bank heist, without firing a shot. The expropriation of over 5 billion euros of deposits in Cypriot banks was deemed a “bank restructuring” instead of a deposit tax so the the Cypriot government could issue an executive order with no pesky approval by parliament required. That’s like having President Obama steal your bank deposits over the objections of Congress. Of course, that’s not going to happen because the US government is not beholden to the Three Amigo Dimwits that have managed to bring Europe back into recession in the name of “saving the euro.”

They are claiming, with each disastrous step, that they are “having to destroy the economy in order to save it” to paraphrase the defense offered after the 1968 Vietnam Mi Lai massacre.

7 thoughts on “EU, ECB, and IMF: The Three Amigos rob depositors

  1. Instead of looking at it as the depositors having their deposits stolen, look at it as their recovering more than they would have had the banks been forced into bankruptcy.

  2. You say the government breached the contract. The reality is the government does not have the resources. A finance based economy will eventually run into these problems. The Germans are tired of going to work every day producing real products in order to support these Finance and real estate economies.

    Eventually similar problems will show up on our shores. There will not be a direct confiscation but the Fed will print money and reduce the value of what the money will buy. The effect will be the same.

    • I’m sure that’s exactly what the governments in Sacramento and Springfield are assuming.

      BTW, the Fed is already confiscating the money of savers by keeping real returns on bank accounts and MM funds negative for years.

    • It has already happened here. The bailouts of GM and Chrysler stole money from the bond holders, who were senior creditors, and gave it to the UAW pension fund, which was a very junior creditor with very good political connections. At least in Cyprus, the small depositors who were insured will get all of their money back. The haircut was imposed on the stock and bond holders, who deserved it. The Cyprus banks got into trouble by buying Greek government bonds. When the “Three Amigos” forced a haircut on the non governmental Greek government bond holders, the Cypriot banks got creamed. Since the bond holders and big depositors in the Cypriot banks are mainly Russian, I would look for distress there next. The Euro is the gift that keeps on giving.

  3. The Cypriots are getting a better deal than Americans are under Bernanke. At least they get the benefit of transparency — as well as a one-time levy, as opposed to monthly money printing that degrades the value of our savings.

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