Quote of the Day: the Bailout Debacle in Cyprus

Have you been watching the nightmare unfolding in Cyprus over the weekend?  It actually took me a couple hours before I could believe what I was seeing.  Imagine waking up and realizing that 6.7% to 9.9%  3%-15% (updated figures) of your savings accounts have been - oh, let's just say it - confiscated.  It might be a way to get back at dodgy Russian oligarchs using Cyprus and possibly money-laundering and whatever, but it's a horrible precedent and plenty of ordinary Cypriots are getting screwed.  This passionate rant gives us the quote of the day:

"The establishment of the principle that a government can, and at times of economic strain must, help itself to your savings, and that this is a legitimate tool of statecraft, ought to provoke riots. I am amazed at the tranquillity with which it has been accepted so far."

Perhaps there aren't any riots yet because everybody is right now busy sprinting to the ATMs.  Hell, I would!  Once folks figure out that they can't get to their money, then I'll expect panic to turn into rage.

Hey, remember all that crazy talk about how cash-strapped governments might start raiding people's retirement accounts?  Doesn't sound so crazy now, does it?  Meanwhile, all those jokes that the Cine-Sib and I used to make about putting your money into your mattress instead of a bank ("Haha, I'm sure my Sealy Posturepedic can give me a better interest rate") now aren't so funny anymore.

Anyway, the thought occurs to me as I watch Cyprus: the leadership in the euro zone could scarcely do a better job of crashing that country if they were trying to do so.  I mean, look at what's been done in the name of "saving it."  When you spark panicked bank runs in the name of saving anything, I think it's fairly safe to say that you've screwed the proverbial pooch.

PS: Interesting (and prescient) anecdote.