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.

  • robin

    French Canadian, Thus far, no one has mentioned the fact that the banner on the railing was burned but no nail holes or shrapnel holes. Also, the video of the cowboy wheeling Jeff Bauman=lost his both legs, they are running and you see a prosthetic device drop to the ground and someone reattaches it. We need to be able to see that frame by frame. My son is studying this in college, but he is too busy right now. I wish Alex J. would do this. Also, all it would take is a background check to see whether this guy already lost his legs. No pictures of his legs and one picture that shows him standing with a sign blocking his legs. Just a lot of things that don’t add up. One women who supposed had her leg blown had it in such a way it is impossible=so my husband realized she already had a prothetic device on and that’s why she could do that. So many things like a women who had no blood at all and then in a later photo of her on a guerney, she is covered with blood and many other things. The blood looked fake=red like paint. I wish we had the resources to do the right kind of investigation, so I hope someone will.

  • French Canadian

    Post-Scriptum: Maybe this yesterday’s interview with Gerald Celente might also interest you, Robin. He is my favorite guest on the show.

    “Alex welcomes back trend forecaster, publisher of the Trends Journal, business consultant and author Gerald Celente who weighs in on the Boston false flag”.

    Gerald Celente: Temple of The Bankers

  • French Canadian

    Robin, 3 great guests today on Alex’s Show ( Friday, April 26) :
    Ron Paul, Syrian Girl and Sibel Edmond.

    “On today’s show, Alex welcomes former FBI translator and whistleblower Sibel Edmonds to explain the US roots of “Chechen” terrorism. We also welcome Syrian Girl to talk about a potential Syrian chemical weapon false flag attack, as well as Former Congressman and 2012 presidential contender Ron Paul to give us his take on how Congress plans to exploit our fears to take our liberties.”


  • robin

    French Canadian,
    We have been spending time going through all the video footage we can find and photos of the bombing to do our own investigation. Still looking at everything very carefully. Called my rep. in DC about why he voted for CISPA. His legislative assistant who is very articulate said although he did not feel it was the best bill, felt compelled to vote for it just in case we have a cyber attack anytime soon. He said he read it in it’s entirety and why he respects him. I plan to call our senators tomorrow and ask why they are voting NO and then send it to them. I also want to know when they are voting on this in the senate. It appears they are preoccupied with gun control and illegal immigration and this is a low priority. So much going on right now. Still watching the economy and working on self-sufficiency skills, etc.

  • French Canadian

    Robin, thanks for all the links. To answer all of your concerns, questions and observations on the Boston shooting, listen to Joel Skousen who gave a great interview yesterday on Alex’ show. He really summed it up, he did a fantastic résumé of what happenned out there:

    Joel Skousen: Tsarnaev Brothers Were Set Up .!

    • robin

      Hello French Canadian, Yes, we know all about what Joel and Wayne are talking about. We keep asking ourselves why AJ did not do a thorough background check on Jeff Bauman the guy who got his legs blown off. He has the resources and once and for all put to rest any “conspiracy theories” that these people are actors. No one in the alternative media has really looked at the videos, photos, crime scene to see whether it was real or not. We have so many questions. Then the fact that it’s impossible to get video of the other bomb site where the 6 yr. old was killed. What don’t they want us to see there? How did all those people get injured since there were not a lot of people at either site? So many other anomalies that we have not heard anyone talk about in the alternative media. This bothers us.

  • French Canadian

    Robin, thanks for all the links. To answer all of our questions and observations that we have so far, listen to this incredible resumé that Joel Skousen did today on the Alex Show. And by the way, Alex also mentionned this bizarre thing about the guy who lost both legs… very, very bizarre!

    Anyway, this false flag was very sloppy. I believe they first wanted to blame what they call… lol… the right wing extremists (Tea Party, Constitutionists, Libertarians, gun lovers, etc.) , but had to change their plan and blame the two brothers instead.

    Here is the interview: It starts at: 2:40:07, but start listening at 2:33.59, there is a caller there that is very interesting:

    Alex Jones Show: Monday (4-22-13) Wayne Madsen & Joel Skousen

  • robin

    French Canadian, I do agree with Alex Jones on this one. This is the biggest event we’ve seen and what it means for this country. We also believe it has all the earmarks of a false flag and we are looking at all the evidence and photos, etc and will continue to do so. So glad there are people working behind the scenes. Here is another article I read.