We Must Learn From Our Mistakes

"Never did I think the EU, in a completely unprecedented manner, resort to stealing money from people's bank accounts..... get your money out while you can."

Nigel Farage UKIP

Image courtesy of Fox News

My view:

It appears that the Cyprus crisis is an opportunity to learn why we should not trust governments with control over the supply of money.

The artificial currency construct called The Euro, is, after a 14 year lifetime, in danger of failure and ultimate collapse.

The EU officials, together with the IMF and their banker friends, are planning a biggest financial heist of the century, stealing from everyone's bank deposits in Cyprus.

This desperate effort to save the evil currency union for the benefit of Germany and the Netherlands, is so blatantly wicked, that ordinary folks are finally waking up to the theft of their savings.

Understand this, governments run deficits that are funded by robbing savers.  The usual way to do this is by creating inflation to steal at the rate of 2 or 3% annually.  That is not longer enough to keep a socialist state alive as the economy has stagnated and borrowing has slowed.

Socialism fears deflation because it requires continual asset inflation to kick the proverbial debt can down the road.

If we think that this sort of thing will not happen in other European countries, or in the US, Canada, and Australia, think again.

The same forces are at work in each nation that are present in Cyprus.

This is about far more than corrupt banks and greedy executives.  It is about a widespread moral corruption that has contaminated the entire financial system.

Unless reforms are enacted quickly both on banks and governments, the entire system will end in a giant liquidity crisis at some point.

The timing of that point will vary from nation to nation, but as the banking system is highly interconnected, the danger of contagion is growing quickly.

Access to cash outside the banking system is increasingly attractive given the current circumstances.  Faith in an extremely corrupt financial system that will just magically resolve itself is dangerous and naive.