Who Are We Kidding? We Are Cyprus!
What's amazing to us is that people don't seem to understand that it is happening here, only in a much more subtle way
Mar 21, 2013
John Maynard Keynes - "The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens."
When Americans heard about the government of Cyprus taking 7-10% of people's bank accounts, many in this country said it could never happen here. What's amazing to us is that people don't seem to understand that it is happening here, only in a much more subtle way (or not so subtle to us). In the Eurozone, countries can't just print their own money like we do in the U.S. because they are members of a group with a common currency, so must plead with the other members to lend them the money. In the case of Cyprus the other members demanded the money from the people's bank accounts in exchange for the bailout and the government agreed, having no other options.
In the U....S. we can print money, so we do. We print money and buy our own debt. It devalues the currency and causes inflation. Officially, the government says there is very low inflation, but if you go to the gas station or grocery store you know the truth. You can't buy a hundred dollars worth of gas or groceries with a hundred dollars like you could when gas was $2/gallon. Agreed?
So, if you can only buy $90 worth of stuff with your $100, isn't it the same as the government taking 10% our of your account? The answer is yes. They've inflated away 10% of the value instead of reaching into your account and taking 10% What's the differrence? It's sneaky, less noticable, like the frog in water that slowly gets warmer and warmer until the frog finds himself boiling to death. We would prefer the government do the obvious and take the money out of our accounts so we could have a real debate about spending. If people could see what's happening to them, see the government taking their money instead of slowly inflating it away, maybe things would change. But, don't kid yourselves. We are Cyprus.
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