Watching the slow motion train wreck in Cyprus made me wonder exactly whom the target of the money grab was. And more importatly, whether or not the people making demands had any clue that their victory was, at best, Pyrrhic, and at worst, a serious contagion.
Any financial system in operation is built upon various levels of trust, implicitly in the case of the least risky capital storage system. You know that you can trust, within reasonable expectations and parameters, that capital that you deposit there can be retrieved later. You know this. You trust this. Rule of law prevents assets from being seized without due process. This gives you legal heft to your trust, that if it is violated, you have some legal recourse to make things right and attempt to recover your assets.
Without this trust, a bank is no more valuable than a mattress for cash storage. Arguably less valuable than some location not in your control.
If you are helping to manage an economy, you never, ever, under any circumstances, want that trust undermined. There be dragons, bank runs, social disorder, and worse.
You never ever want people running businesses, dependent upon that trust to be able to remain in operation and keep people employed, and growing the company … to question whether or not it is in their best interests to remain in business, as they cannot trust that their business accounts will not get looted.
Moreover, if for some reason, an insane policy comes about which loots these assets, you absolutely never ever want to imply that it would be anything more than a localized aberration.
Life imitating art. Ayn Rand had called this perfectly in Atlas Shrugged. Lets hope that the powers that be realized the power of this contagion, and do the smart thing, and cease all looting efforts, and all of the dangerous class warfare rhetoric that goes hand in hand with it. The only people being punished by these insane policies are the very people whom they need to grow the economy (buinesses), not the ones they thought they were targeting (you know, those eeeevvvuuulll rich folks).
The last thing they want are for folks like me to get worried that I wont be able to pay bills because someone looted my account without recourse. Here in the US I am less worried, though I have to worry that customers or resellers in the EU may not be able to pay when their assets are seized. See how that spreads? They need to fix this fast. This is very dangerous fire they are playing with for what appears to be political or ideological reasons.
Viewed 111867 times by 5231 viewers