From the Front Lines in Cyprus — A Real Live “Haircut”

This screenshot is actually from a person’s account in Cyprus showing the “blocked funds” which is the money that the government suddenly is seizing to pay off the nation’s debt.  As you can see, we toss around these figures like 40% or 60% and we all know what these numbers mean in theory, but until you see that actual figure of money that a person worked all their life to attain and now is taken in the blink of an eye, then the percentages start to come into focus.  Seeing that cold, hard example of what is really happening to ordinary citizens over there really drives home just how bad it is.

This image is from an actual resident in Cyprus representing the actual seizure of their personal funds by the government.
This image is from an actual resident in Cyprus representing the actual seizure of their personal funds by the government. Parts of it are purposely blurred out for obvious reasons.

These “haircuts” are more frightening because Cyprus’ financial crisis is only a hop, skip, and jump away from those of many European nations and the United States of America itself.  That’s the horrible irony of it all.  If this helping of itself to the money of its citizens by the government of Cyprus is at all successful, what does that really mean for the rest of the world?  Does simply pulling a surprise seizing of funds from working people all over the nation suddenly become a realistic, natural strategy for solving financial problems?

Will this happen in America?  Who knows?  It is perfectly reasonable to assume that if things got bad enough with the national debt, and especially if you throw in another war, like, I don’t know, North Korea, Iran, or both, and if you throw in on top of that a system of government that continues to add spending programs (a la Obamacare) when it doesn’t have enough money to operate to begin with, yes, it could come to this in America. As a matter of fact, the Cyprus experiment may be what world leaders everywhere have been waiting on.  Watch the propaganda machine try to show how all of these people saved Cyprus and this was a marvelous example of human generosity on display.

The concept behind these “haircuts” is that the people will have their money seized by the government to get it back on its feet, but over time, and when we say that we mean decades at best, the money will be at least in some portion recouped.  Of course, this supposes that the government that already run itself in the ground doesn’t just take the funds as a lifeline and continue on the same course to getting itself in this same situation again.  Think about it.  If the United States told you it had to take half of your deposited bank funds to pay down the debt and continue to operate, would you have any faith that you would see any of that money returned to you in the long term?  After standing by, working hard, and watching a bunch of crooked politicians destroy everything you worked so hard to build?

There is one thing that Common Sense Conspiracy would like to point out.  These people in Cyprus were taught to sock back money all their lives for retirement, just as we are in the United States.  They are taught to put their money in banks and draw interest on that money, all the while contributing to the economy as a whole.

If anyone in Cyprus amassed $800,000 in a sock under their bed, this crisis meant nothing to them.  It was only by participating in the system that people got screwed.

Could there be a lesson in this for the rest of us?

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