Is A Cyprus-like Crisis Coming To The US?

The Obama-bots must be licking their chops as they watch the disaster occur in Cyprus! They can hardly wait for the next financial crisis to occur so that they can raid your savings, stock, retirement plans and the like.  It is only a matter of when it occurs, not if it is going to happen. The door has been opened and it will be used in every country that needs a bailout.

Our only question is--will Americans stand up and say "no" to the dictator like the Cypriots did? We sure do hope so.

The following article will give you some background on how our asset structure in the US would react the the rules that are being imposed on Cyprus by the European Central Bank.

Unfortunately, we are no so different. The primary one is that we can print money and Cyprus could not. Does that make a difference in the final analysis, yes. Will it delay the imposition of these new rules on us, the American citizens, probably not.

Obama and his crew want to remove as much wealth from this country and transfer it to themselves and their friends. Whether it is right or wrong, illegal or legal does not matter as long as it benefits Barack, Michelle and their good buddies. Their intention is to use any emergency to its fullest extend with the goal of enriching those who support them and impoverishing those who don't.

The 2012 campaign showed how the voters will sell their franchise for a few measly coins. Can we expect anything less in the next four plus years?

We have seen the next act, what will be the catalyst?

Conservative Tom

P.S. Before you jump on us for using the words "four plus years" please understand that we do not believe that the Obama-ites will give up their privilege of raiding the US Treasury easily in 2016. We fear that he will want to continue on as our leader. To that point legislation has been introduced into the Congress to abolish the two term limit on Presidents. He also could do it by "Administrative Edict."  Yes, we are paranoid, we admit it and are proud of it. Have fun with those thoughts.

Could The "Cyprus Fiasco" Occur In The United States?

Submitted by Tyler Durden on 03/17/2013 12:37 -0400

• Excess Reserves
 
• Fresh Start
 
• Germany

As has been assiduously explained by members of the European statist oligarchy, the reason for the deposit tax levy, in addition to the broader unsecured debt "bail-in" bailout of Cyprus, was due to the unique funding structure of Cypriot banks, in which the bulk of funding was in the form of deposits (whether Russian or domestic), leaving a tiny €2 billion in the form of junior bonds. Since the bailout would require realigning the balance sheet to a new, sustainable "fresh start" in which assets were remarked to a realistic value, it would mean impairing liabilities all the way down the capital structure. Naturally, politics played a big part in the decision to impair what Germany primarily saw as a Russian money-laundering haven, while local depositors were merely "collateral damage."

Politics aside, the bottom line is that the Rubicon has been crossed, and deposits have now been forcefully confiscated in what Europe promises to be a standalone case. What is certain, is that nobody will wait to find out how long it takes before Europe's class of increasingly more desperate and ill-meaning despots is found to be have lied once more (as it has about everything else since the start of the European crisis). And while the mainstream media will be focused primarily on Europe in the coming days, as BCG and we have warned, the topic of "wealth taxation" is now front and center, and it stars not only Europe, but the US as well.

The question then becomes: what does the funding structure of the US private depository institutions look like, and is there any possibility of Cyprus "wealth tax" recurring on the other side of the Atlantic. To answer this question, we present the summary layout of the consolidated US depository system, which according to the Fed's December 31, 2012 Flow of Funds report had a grand total of $15 trillion in assets, and a matched number of liabilities, of which 72%, or a total of $10.9 trillion was in the form of deposits (checkable, small and large time, and savings).

Visually, this looks as follows:

So, if the US was to go the Cyprus route, and begin impairing balance sheet liabilities to remark assets, there would be precious little space (with just $4.3 trillion in total other funding liabilities), before one would need to start eating into the deposit base, should Congress decide to implement a very "fair and just" financial asset tax in the US next.

Will Congress do this? Obviously, nobody can answer that question now. However, it was "absolutely certain" as recently as 48 hours ago that Cyprus too would see no depositor "bail in" either. Then things changed rapidly. What is known, is that according to the same BCG chart we showed last night, the necessary debt-reduction needed in the US to reach a sustainable debt level, was over $8.2 trillion using debt numbers as of 2009...

... Since then consolidated US debt has risen by over $5 trillion.

Which means that if, indeed, the US proceeds with its own wealth tax, then deposits may well be one "wealth class" that gets impaired. Of course, since in the US other financial assets, namely the stock market, account for a far greater proportion of household net worth, it is quite possible that instead of impairing deposits at US banks, which already subsist solely due to the Fed's $2 trillion in excess reserves, the government may instead choose to generously tax simple 30% of all of your stock holdings, and achieve the same "wealth transfer" result.

Why?

Because it's only fair, as the second coming of the glorious global socialist revolution has made it all too clear.

And remember this: there are no longer any rules, and any assets, any "wealth" saved, stored, and hidden is now fair game in the global forced wealth reallocation "game."