Thomas Sowell poses an interesting question: could a Cypriot-style money grab happen here?
This is what happens when nations run up too big of a bar tab and have run out of options as the taps run dry and the bartender shouts “last call”: they start scrounging for dropped change, steal the waitresses’ tips when she’s not looking, and then eventually start lifting other patron’s wallets.
Of course, now that tiny little Cyprus has decided to brazenly steal from its depositors, the other EU zombie-states are starting to fall in line. If the citizens of Spain, Italy, and Greece wish to remain “citizens” (before they finally blow right past being “subjects” and become “serfs”), they’d better be paying close attention and getting their cash out of the banks now.
Think that’ll go well? Me neither. But once a state has removed that crucial psychological pillar – that is, your money’s safe here – then there is nothing to stop a good old-fashioned bank run. And that’s bad for everybody:
The economic repercussions of having people feel that their money is not safe in banks can be catastrophic. Banks are not just warehouses where money can be stored. They are crucial institutions for gathering individually modest amounts of money from millions of people and transferring that money to strangers whom those people would not directly entrust it to.
That means no loans for new cars, new homes, or new businesses.
Once the dust settles, they’re likely to treat their elected “betters” the same way they’d treat the proverbial drunk trying to stick them with his bill. Of course, there’s one little problem in that they all have a share of the National Bar Tab.
EVENING UPDATE: Zero Hedge on the eventual endgame.
WHAT HE SAID: Dr. Krauthammer explains why this could be the EU’s Archduke Ferdinand moment. And we all know how that turned out.