EU finance ministers agreed recently that large, uninsured depositors should be subject to losses but some countries may still seek some flexibility on how they wind down their banks.
The above caption is taken from an article that appeared on Reuters. To many it is an incidental, as it would seem to represent the concern of EU ministers hoping to keep a lid on any further developments like the recent one in Cyprus.
And we can be forgiven if our reading of this item suggests to us that the EU is doing its best to confine the problem, as their conclusion has been to protect the great majority of depositors, with only those possessing deposits of over 100,000 euros having to accept some measure of loss in their accounts.
The Bigger Picture
Whenever a major historical decline is under way – whether it be economic, societal, governmental, or, as in the present case, all three – the tendency of the average observer is to, increasingly, bite his nails and worry how much he, personally, will be affected.
As the chaos increases, he watches as others are subjected to the oppression imposed by the government, the police, the institutions, or as in the present case, all three. Although he is not happy with the developments, he hopes to stay clear. If he can do so, he tends to “go along” with the developments, not causing a fuss. At some point, he may find himself affected, but, if he is not as affected as others, he may continue to go along to get along.
But, at some point, he may find himself directly and dramatically affected. Should this happen, he will hope that others may save him from the injustice that is being visited upon him, but the others will do nothing, as they, too, have decided to go along.
Nowhere in history has this tendency been so poignantly described, as by German Pastor Martin Niemöller in 1946, in describing his own experience during the buildup of the Nazi movement in the late 1930s.
“First they came for the communists, and I didn't speak out because I wasn't a communist. Then they came for the socialists, and I didn't speak out because I wasn't a socialist. Then they came for the trade unionists, and I didn't speak out because I wasn't a trade unionist. Then they came for me, and there was no one left to speak for me.”
Pastor Niemöller was arrested in 1937 and sent to Dachau for “not being enthusiastic enough about the Nazi movement.”
Many see the confiscation in Cyprus as a test balloon. It was, after all, engineered by the EU, and the EU has a great deal to gain by the confiscation of funds from bank accounts generally. Therefore, if it can find a way to say, “We're concerned about confiscation and we're going to do all we can to protect the depositor of under 100,000 euros from being impacted in any way,” many will breathe a sigh of relief. They will say, “Well, then, they're not going after me. I guess it's all right.”
If we take this view, we are, in essence, saying, “I'm prepared to overlook the fact that confiscating money from accounts over 100,000 euros is outright theft, as long as you leave me alone.” This is very short-term thinking.
Here is a basic principle that I believe should never be compromised:
Never condone the victimisation of others. If you do, you give your tacit approval for the concept of victimisation. In doing so, you provide pre-approval for your ownvictimisation.
If we take this principle together with Pastor Niemöller’s warning, we recognise that, if it is acceptable for banks to steal deposits exceeding 100,000 euros (or any level, for that matter), we are stating that, when the banks run through this money, as they inevitably will, it is just as reasonable to drop the level to, say, 50,000 euros and confiscate again.
Once the principle is lost, all that remains to resolve is the degree of theft.
Further, if it happens to depositors in Cyprus and is tolerated, we should not be surprised if it spreads to Canada (as recent warnings have suggested), or Greece, or Spain, or whichever other country may be next in line.
At some point, confiscation of deposits by banks may well become a generally accepted concept. The point to remember is that such developments never begin with a bang. They are always introduced in a small and gradual way and then expanded, just as income tax was in the US. Government domination and loss of liberty are introduced. They then expand.
But, in spite of all the above, the reader would be quite justified in saying, “I don't like it any more than you do, but what am I supposed to do, take up arms against some Cypriot banker in order to make a point?”
In truth, the answer is no. That would be an exercise in futility. But that does not mean that the individual can do nothing. It is exactly developments such as this one in Cyprus (and, quite possibly, in your own country, if you live in one that is currently tied up in the EU/US march to statism) that serve as suggestions that it may be time for you to exit the banking system.
If you store your wealth in a bank (and, here, we use the term broadly – “wealth” to one person may mean as little as $5,000), you may wish to consider whether your account will be included in “Confiscation, Phase II,” or even “Confiscation, Phase III.” If so, you may wish to remove your funds from the bank and pursue another form of wealth storage.
Nearly everyone who is alive today has lived entirely in the period (since the Great Depression) during which banks have been generally accepted as a safe haven for wealth storage. Indeed, for many, they are considered the only such haven. However, this has not always been so. The modern concept of wealth storage began in Greece, ca. 400 BC, when those who had more gold than they could safely hide at home, began to store it in the vaults of the local goldsmiths.
Early banks followed. The Venetian model in the sixteenth century was the most successful, as it carried the limitation that banks could only store wealth for their clients, for a fee, and could not transact any other type of business. Throughout history, this model has been successful. What has proven repeatedly unsuccessful has been when banks took on other forms of business (loaning money, etc.). In such cases, history has seen bank failures, the final outcome of which was the depositors being the losers.
So, where to go from here? One plan might be to find locations in less-risky countries that will accept you as a client. Once an account is set up, if things begin to look a bit dodgier at home, all that may be needed would be a wire transfer, if it is still possible at that time.
Another possibility may be to resort (at least for moderate amounts) to what a very large portion of the population routinely did less than a century ago – keep some money at home. At one time, it was the norm to have some operating capital in a desk drawer. In recent decades, we have become convinced that a chequing account was much safer, but this perception may soon be ending.
To modern culture, this latter idea seems downright primitive, yet, for the great majority of people, until well into the 20th century, this was the norm. In years to come, 2013 may be looked back upon as “the arrival of modern bank confiscations,” and the majority of those who actually still have wealth in five to ten years may be the ones who foresaw the inevitable, got their money out, and put it in comparatively safer places.
Tags: economic collapse,