OPINION

Don't Worry About Cyprus, It Already Happened Here

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.

I can just imagine Jay Leno taking to the streets in order to ask the average American citizen, “What do you think about Cyprus?”

More than likely, the answer would be, “I really prefer oak or maple for my flooring, I never really thought about cypress.” 

Jay would reply with, “No, the country Cyprus.  The IMF, EU, and ECB, the “troika,” just put a tax on bank accounts.  Well, no.  Actually, they just stole a portion and froze the rest of the money in spite of the increased guarantees.” 

The average American would then respond, “There’s a country named Cyprus?  Taxes?  So what, we get taxed on our savings all the time.  Oh, they stole part and froze the rest?  Hmmmmm…..who cares, it couldn’t happen here in America.  By the way, what are the IMF, EU, ECB, and the “troika?”  (End of interview.) 

I started to think that not knowing Cyprus is a country or to not understand the term “troika” is perhaps excusable, after all, it might be due to March Madness. 

But to think those types of financial and economic events couldn’t happen here, hmmmmm.....In 1933, President Franklin Delano Roosevelt declared a national bank moratorium (he closed all banks.) 

Then, via Executive Order 6102, the government confiscated all gold and gold certificates, exchanging them for paper.  Consequently, if you didn’t surrender your gold, you went to jail.  The price of gold was set at $20.67 per ounce.   

Yet, within a year, the government reset the price to $35.00 per ounce, effectively fleecing the American public by 69%. 

And speaking of rip-offs, just remember that in order to support the UAW in 2009, President Barack Obama rejected the rule of law for GM senior and subordinated debtholders, thus relegating them to the back of the line. 

Next, consider that former SEC Chairman Mary Schapiro along with current SEC Commissioners Luis Aguilar, Troy Paredes, and Daniel Gallagher have all previously warned the general public about the risks involving money market accounts, effectively stating that there is neither a guarantee on the return of capital nor is there a guarantee regarding the liquidity of the funds.  In page after page of SEC documents, notifications were clearly written that money market investors are not being reasonably rewarded for the risk that they’re currently taking. 

In addition, after extensive 2011 Congressional analysis failed to discover where the missing $1.6 billion of MF Global customer money had gone, J.P. Morgan was recently found to not have disclosed the risks taken and monies lost by the excess deposits as compared to the loans domiciled at J.P. Morgan. 

Finally, following the “lost decade” of investment (2000-2009) which shed a very bright light on the failure of self-directed retirement accounts, former Treasury Secretary Tim Geithner discussed the possibility of nationalizing IRAs and 401ks as a way of preserving the wealth of Americans. 

So, regarding the current situation involving the third largest island in the Mediterranean Sea, can it happen right here in our country? 

Unfortunately, it has happened, it is happening right now, and it will continue to happen.  Indeed, Cyprus could very well prove to be much more than just another alternative to oak and maple.