I haven’t been able to blog as much as I would like to. Learning a new job and preparing for an upcoming wedding has eaten into my normal hours of bloggeration. But, just because I haven’t been blogging as much doesn’t mean that nothing has been happening. In fact, a lot has happened.
Since I’m not Catholic, I don’t need to recap the election of a new Pope.
Since my NCAA bracket is completely screwed-up, I don’t need to discuss March Madness.
So that leaves only one thing for me to rant about: the little country that everyone is talking about, but no one knows where it is.
You can visit any financial website and read in detail what’s going on in Cyprus, but here’s all you need to know:
Cyprus is the latest country to face financial meltdown. In order to receive a bailout from the European Union, the President has agreed to a few terms. Initially, it was proposed that all bank deposits be taxed 6.75% (under 100k) and 9.9% (above 100k). This caused an uproar (obviously) as depositors raced to the banks to withdraw their deposits. The terms have since been adjusted to where only deposits above 100k will be frozen. These depositors could face losses up to 30%.
In the days following these announcements, every article has excited the same reaction.
“I’m so glad that could never happen here.”
Honesty Is The Worst Policy
I can’t help but laugh at this response – the absolute outrage when people hear of the government confiscating wealth. How could they? How could we trust a government that directly takes our money that’s sitting in the bank?
Here’s a better question…
Is it easier to trust a government that directly takes the money sitting in the bank – or – that indirectly takes the money sitting in the bank?
On one hand, you have a government directly taking about $7000 of your $100,000. On the other hand, you have a government devaluing their currency so that your $100,000 only buys $93,000 worth of goods later. Is there a difference?
I, personally, prefer the honest approach, but the general public would disagree.
The Federal Reserve is continually pumping money into our economy which will lead to inflation. Inflation is an indirect tax on any money you have sitting in the bank. But, for some reason, I don’t see Americans causing an uproar about our monetary policy.
It seems to me that Americans would rather be lied to.