The bank runs underway are in reaction to the abandonment the previous Eurozone policy of protecting depositors in its efforts to address the EU's debt crisis. The bankster's spin is that Cyprus was unable to stabilize its banks, which had amassed €22 billion of Greek private sector debt and were disproportionately hit by the haircut taken by all Greek creditors. In reality as Michael Hewson, senior market analyst at CMC Markets says, “If European policy makers were looking for a way to undermine the public trust that underpins the foundation of any banking system they could not have done a better job.” Of course bond holders, who made the profits originally, (the 1%) are not asked to take a haircut, only the depositors (the 99%).
The bankster's spin on Cyprus' current economic crisis mirrors their spin on the previous Greek, Spanish, Italian, Irish, Portuguese problems, they blame the victims and impose Shock Doctrine type 'austerity' measures which result first in massive unemployment then in the sale of commonly owned national assets to private corporations to raise the cash necessary to make the payments on the bailouts.
What the banksters and their shareholders refuse to talk about is that this recent European disaster is a product of a huge unfair advantage which Austria, the Netherlands and especially Germany are exploiting. Austria, the Netherlands and Germany are in a currency union with far weaker economies. If monetary union had not taken place, if Greece and Germany had retained their own currencies, then the drachma would have devalued perhaps thirty or forty percent against the D-Mark in this century. In other words, Germany is benefiting from a currency that is (perhaps) 20% under-valued for Germany, with all the export advantages this brings. This is the flip-side of the position of the Greeks and others . For them, theis currencies are over-valued, which is the reason why they’re being screwed. So when Germany brags about its superior performance, remember its unfair advantage.
In other times, before the globalization of debt, before the IMF and Whirled Bank countries simply devalued their currency to become more competitive. That's what happened in the Great Depression. But the Eurozone countries cannot take a page from the Depression playbook and devalue their own currency, they no longer have one.
The vast majority of folks in Cyprus and the others know all this and that's why unelected governments have been imposed. In Cyprus and the others the 1% would take the haircut if their country told the EU to shove it. A devaluation would impoverish them relative to other 1%ers where as it wouldn't really hurt the 99% much beyond them no longer being able to buy imported foreign goods. On the flip side a devaluation would make Cyprus, and the others, very attractive to tourists, and would make their exports relatively cheaper which would rapidly increase employment.
The governments and banksters in Cyprus and the others refuse to acknowledge that Argentina told the IMF to shove it about 12 years ago and despite all the dire predictions are now one of the fastest growing economies in the world. Argentinians now enjoy nearly full employment, a very livable per capita income and didn't sell off their commonly owned utilities and national treasures. hopefully tomorrow the Cypriot minority government dominated by 1%ers will be forced by the smaller parties to tell the EU to shove it too. If that happens, in the long run, the 1% will get what it deserves and 99% of the Cypriots will party.
