Ron Paul: The Great Cyprus Bank Robbery




by Ron Paul

The dramatic recent events in Cyprus have highlighted the fundamental weakness in the European banking system and the extreme fragility of fractional reserve banking. Cypriot banks invested heavily in Greek sovereign debt, and last summer’s Greek debt restructuring resulted in losses equivalent to more than 25 percent of Cyprus’ GDP. These banks then took their bad investments to the government, demanding a bailout from an already beleaguered Cypriot treasury. The government of Cyprus then turned to the European Union (EU) for a bailout.

The terms insisted upon by the troika (European Commission, European Central Bank, International Monetary Fund) before funding the bailout were nothing short of highway robbery. While bank depositors have traditionally been protected in the event of bankruptcy or liquidation, the troika insisted that all bank depositors pay a tax of between 6.75 and 10 percent of their total deposits to help fund the bailout.

While one can sympathize with EU taxpayers not wanting to fund yet another bailout of a poorly-managed banking system, forcing the Cypriot people to pay for the foolish risks taken by their government and bankers is also criminal. In their desire to punish a “tax haven” catering supposedly to Russian oligarchs, the EU elites ensured that ordinary citizens would suffer just as much as foreign depositors. Imagine the reaction if in September 2008, the US government had financed its $700 billion bank bailout by directly looting American taxpayers’ bank accounts!

While the Cypriot parliament rejected that first proposal, they will have no say in the final proposal delivered by the EU and IMF: deposits over 100,000 euros are likely to see losses of at least 40 percent and possibly as much as 80 percent. “Temporary” capital controls that were supposed to last for days will now last at least a month and might remain in effect for years.

Especially affected have been the elderly, who were unable to use ATMs or to transfer money electronically. Despite the fact that ATMs severely limited the size of withdrawals during the two week-long bank closure, reports indicated that account holders who had access to Cypriot bank branches in London and Athens were able to withdraw most of their funds, leading to speculation that there would be no money available when banks finally opened up again. In other words, the supposed Russian oligarch money may well be already gone.

Remember that under a fractional reserve banking system only a small percentage of deposits is kept on hand for dispersal to depositors. The rest of the money is loaned out. Not only are many of the loans made by these banks going bad, but the reserve requirement in Euro-system countries is only one percent! If just one euro out of every hundred is withdrawn from banks, the bank reserves would be completely exhausted and the whole system would collapse. Is it any wonder, then, that the EU fears a major bank run and has shipped billions of euros to Cyprus?

The elites in the EU and IMF failed to learn their lesson from the popular backlash to these tax proposals, and have openly talked about using Cyprus as a template for future bank bailouts. This raises the prospect of raids on bank accounts, pension funds, and any investments the government can get its hands on. In other words, no one’s money is safe in any financial institution in Europe. Bank runs are now a certainty in future crises, as the people realize that they do not really own the money in their accounts. How long before bureaucrat and banker try that here?

Unfortunately, all of this is the predictable result of a fiat paper money system combined with fractional reserve banking. When governments and banks collude to monopolize the monetary system so that they can create money out of thin air, the result is a business cycle that wreaks havoc on the economy. Pyramiding more and more loans on top of a tiny base of money will create an economic house of cards just waiting to collapse. The situation in Cyprus should be both a lesson and a warning to the United States. We need to end the Federal Reserve, stay away from propping up the euro, and return to a sound monetary system.

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54 Comments:

  1. The real problem is government insured deposits, also it is important to understand that our govt. did tax us during 08 albeit in a very dishonest way. In the future depositors will need to take losses when their banks lose their money

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  2. French Canadian, I put a comment on the other thread. It taking a long time to post again. Trying it here to see how long it takes to post.

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  3. Imagine the reaction if in September 2008, the US government had financed its $700 billion bank bailout by directly looting American taxpayers’ bank accounts!

    Yea it was done by utilizing tax funds collected. Remember that before the Federal Reserve was created they first had to set into law the ‘taxation of labor’.

    Leveraging labor and the consumption/production ratio is a secretive science of the money changers. Thus the books of the IRS and the Federal Reserve are very secretive.

    Few have be in a position of power to effectively challenge their secretive system and lived. Few have accomplished this and shown a great track record for liberating citizens from the money changers grip.

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    • The extremes currently confounding our civilization can be simplified. There are basic Natural Laws which allow the Universe and US to exist. Harmonizing with the ‘Original Force’ becomes one with the ‘Universal Expansion’. However, that which chooses through ‘Free Will’ not to harmonize with ‘Natural Universal Laws’ falls into ‘Self destructing Chaos’.

      So what defines Natural Law, what are the historic examples that exemplify Natural Laws implemented into civilization?

      What is interesting is that the mass teaching of Natural Law throughout so called recorded history has apparently coincided with natural ‘Earth Changes’ and/or the collapse of relative socio-political economic systems. This pattern in my ‘worm in the mud’ opinion logically started with the destruction of Eden.

      The current scriptures of Genesis are not ‘scientific’ but ‘allegory’. That is because the books of Moses were written in Egyptian Hieroglyphics which was coded. The ‘code’ of the ‘Secret Schools’ Moses was a Student of and fought against the power of the ‘Black Satanic Priesthoods’ who controlled the Pharos, give each symbol comprising the Egyptian Hieroglyphic language two meanings, one that is common and one that is secret.

      So, what happened was that the Sons of Moses died off and the Leviticus Priesthoods took over and interpreted the books of Moses in a very common way. Thus you have a very common dogmatic Genesis that is allegory rather than a scientific understanding of how Earths Angelic Host ‘Evolved’ Earths ecological and biological systems fermented from the Ocean Waters fueled by Our Solar Systems Star.

      Yea the book of Enoch. That Episode is over and told so through the ‘allegory’ story of Noah. Spirits trapped in that Episode need to come into the light of Christ through Jesus. There is a so called Book of the Living and a Book of the Dead. Those of US who seeks to partake into the ‘Eternal Universal Expansion’ seek the Book of the Living. Notice how astrophysicist found the Universe is in fact expanding with ever greater acceleration!!!!

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  4. Ron Paul is a blithering fucktard. What a fuckin’ jackass. wRONg Paul isn’t fit to be the dogcatcher of Bumfuck Egypt! You Paultards are the scum of the Earth! You should all be herded onto a fleet of prison busses and driven of the edge of the Grand Canyon! Lol!

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  5. Ron Paul is a blithering fucktard. What a fuckin’ jackass. wRONg Paul isn’t fit to be the dogcatcher of Bumfuck Egypt! You Paultards are the scum of the Earth! You should all be herded onto a fleet of prison busses and driven of the edge of the Grand Canyon! Lol!

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  6. Deposits in the U.K. and Russian subsidiaries are separate from the Cyprus banks. Depositors in those countries were able to withdraw money on deposit in the U.K. or Russia. But they were not allowed to move money from Cyprus to the U.K. or Russia. It would be like if you had money in a Citibank subsidiary in Brazil and Brazil imposed capital controls. You wouldn’t be able to take money out of your Citi Brazil account, but your account in New York would not be impacted.

    So while reports may have indicated this happened… it didn’t.

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  7. Ron Paul is my hero. Thank you dr. Paul

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  8. Could the Banksters Grab Your Bank Deposits?
    http://www.infowars.com/could-the-banksters-grab-your-bank-deposits/

    Excerpt:

    “The recent news about Cyprus banks confiscating depositor’s funds sent chills throughout the financial world here and abroad. I couldn’t believe that the plan in Cyprus hinged on the idea that the bank could just steal customer’s funds to balance the bank’s books. I muttered to myself when I read the story that something as crazy as that couldn’t possible happen here in the United States. Unfortunately, I learned that the plan to pull a Cyprus type grab here was already in the works. “

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  9. “The bankers own the earth. Take it away from them, but leave them the power to create money, they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money.”

    -Sir Josiah Stamp, (Director-Bank of England)

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  10. “The bankers own the earth. Take it away from them, but leave them the power to create money, they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money.”

    -Sir Josiah Stamp, (Director-Bank of England)

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  11. What is “normal” Fraction Reserve Banking and “excessive” Fraction Reserve Banking? … never heard those terms before.

    It seems to me that Ron is fine with Fraction Reserve Banking – of any kind – provided a gold standard is in place. That’s what I took away …. and that would be somewhat consistent with his previous statements

    But I am still suprised that after decades he is now finally attacking Fraction Reserve Banking.

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  12. He does not have a problem with normal Fraction Reserve Banking, but he does have a problem with excessive Fraction Reserve Banking due to the artificial distortion by manipulation of interest rate. Just like I would be against excessive consumption of gasoline when Nixon artificially priced fixed gasoline below market rate. They both are symptoms and not the disease.

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  13. I dont remember Ron Paul having a big problem with Fraction Reserve Banking before….

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  14. HAPPY EASTER ❤ GOD BLESS GEORGE W. OBAMA!
    ACLU: ‘Obama Continues Bush Policies': /watch?v=EY0jsJEJ_mI
    Nader: ‘War Criminal Obama Worse Than Bush': /watch?v=tovOOJIj0kU
    Chomsky: ‘Obama Is Worse Than Bush AND Blair': /watch?v=8mA4HYTO790
    Hedges: ‘Obama is Worse Than Bush': /watch?v=3I0-u8Z6LAs
    Prof. West: Obama is ‘Republican In Blackface': /watch?v=VvNzLcq1hHM
    Oliver Stone: ‘Obama’s a Wolf in Sheep’s Clothing': /watch?v=AK2neU1dTrk
    Michael Moore: ‘Obama Worse Than Bush': /watch?v=NI1X36ubzpQ

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  15. HAPPY EASTER ❤ GOD BLESS GEORGE W. OBAMA!
    ACLU: ‘Obama Continues Bush Policies': /watch?v=EY0jsJEJ_mI
    Nader: ‘War Criminal Obama Worse Than Bush': /watch?v=tovOOJIj0kU
    Chomsky: ‘Obama Is Worse Than Bush AND Blair': /watch?v=8mA4HYTO790
    Hedges: ‘Obama is Worse Than Bush': /watch?v=3I0-u8Z6LAs
    Prof. West: Obama is ‘Republican In Blackface': /watch?v=VvNzLcq1hHM
    Oliver Stone: ‘Obama’s a Wolf in Sheep’s Clothing': /watch?v=AK2neU1dTrk
    Michael Moore: ‘Obama Worse Than Bush': /watch?v=NI1X36ubzpQ

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