Inspiring Moments in Banking?

FDIC placard from when the deposit insurance limit was $2,500.  Today, deposits are guaranteed to $250,000.  Is that evidence of inflation?  (Photo credit: Wikipedia)

In “Big depositors in Cyprus to lose far more than feared, Reuters reported that,

 

“Big depositors in Cyprus’s largest bank stand to lose far more than initially feared under a European Union rescue package to save the island from bankruptcy, a source with direct knowledge of the terms said on Friday.

“Under conditions expected to be announced on Saturday, depositors in Bank of Cyprus will get shares in the bank worth 37.5 percent of their deposits over 100,000 euros, the source told Reuters, while the rest of their deposits may never be paid back.”

 

That description of the terms for ending the Cyprus Crisis is not absolutely clear.  However, I read that description to mean that anyone with over 100,000 euros in a Cyprus bank may lose 100% of his savings, but will receive shares in the newly recapitalized bank (recapitalized with his savings) equivalent to 37.5% of the value of his savings.  Thus, the depositor may be forced to buy stock he doesn’t want in his own failing bank with 37.5% of his savings, and then be forced to effectively donate the other 62.5%  to capitalizing that same failing bank.

You can use all the fancy words you want to justify that confiscation, but the confiscation differs from outright theft only in the fact that the Cyprus government—being a co-conspirator in that theft—has sanctioned that theft by law as “legal”.

Does that taking inspire your confidence in your bank?

If bankers can seize depositors’ funds in Cyprus, can they do it here in the US?

 

Gold’s Return

Usually not a good sign to receive a letter from the FDIC (Photo credit: swanksalot)

Economics is alleged to be a “science,” but if it is, it’s a very obscure science.  Much of whatever knowledge economics provides is almost incomprehensible.  Much of what can be understood is government propaganda (lies).

Nevertheless, if we can’t learn “the truth, the whole truth and nothing but the truth” from economics, we can still learn some truth.

One means of discerning truth is by observing “coincidences”.  Some people deny the existence of innocent “coincidences”. I don’t.  Sometimes one person or group just happens to do something that another group or person also does at virtually the same time.  There might seem to be a correlation or even a conspiracy between the two groups–but, in fact, there’s merely an innocent “coincidence”.

However, I also don’t deny that sometimes two seemingly disparate persons or groups perform virtually identical acts at virtually the same time based on a mutual agreement to do so.  Their similar acts might seem “coincidental,” but they are actually evidence of the two persons/groups working in concert.

When we see two powerful but seemingly separate groups or entities performing the same act simultaneously, we can suspect that something major is about to happen.