This past Friday, Cyprus announced a new tax as part of it’s “bailout” solutions to it’s problems. The details are still a little muddy, but, the new tax is on existing bank accounts inside the country. Smaller deposits will be taxed 6.6% while larger deposits will be taxed 9.9%. Basically, the government decided to simply steal private property to help fix their financial woes. This involves all accounts, citizen of Cyprus or not. While this is a European Union issue, it is unprecedented in it’s nature. I can’t imagine this happening in a larger country like Spain or Italy. Now, one must wonder if they are next.
This brings me to some stories related to the USA. The Democrats in D.C., namely Pelosi and Obama, have said that they have a revenue (not enough taxes coming in) problem, not a spending problem. In the past, there have been whispers of the Federal govt demanding that some portions, if not all, of current retirement accounts, being Federalized and used to purchase Treasury Bonds. While many have blown this off as another “conspiracy theory”, the threat is very real. The way things have been operating in D.C. as of late, all of this could occur without the initial consent of Congress. By the time all the court hearings are concluded, the damage would be done, and likely irreversible.