Patterico's Pontifications

7/4/2015

Greece Plans Cyprus-Style Raid on Bank Deposits

Filed under: General — Patterico @ 12:44 pm

The Financial Times has reported that Greece plans to raid Greek bank deposits to deal with its financial crisis:

Greek banks are preparing contingency plans for a possible “bail-in” of depositors amid fears the country is heading for financial collapse, bankers and businesspeople with knowledge of the measures said on Friday.

The plans, which call for a “haircut” of at least 30 per cent on deposits above €8,000, sketch out an increasingly likely scenario for at least one bank, the sources said.

A Greek bail-in could resemble the rescue plan agreed by Cyprus in 2013, when customers’ funds were seized to shore up the banks, with a haircut imposed on uninsured deposits over €100,000.

But relax, silly depositors in Greek banks! Greek officials have told Reuters that any such reports are “baseless”:

The head of Greece’s Bank Association on Friday dismissed as “completely baseless” a report by the Financial Times that contingency plans were being made for a possible bail-in on bank deposits.

Louka Katseli, who also chairs the National Bank of Greece , told Skai TV that suggestions authorities were planning a raid on deposits belonged “only in the sphere of fantasy.”

“There are no such scenarios at any Greek bank, not even as an exercise on paper,” Katseli said.

Are you having a sense of deja vu? If so, here’s why:

On March 1, 2013, Cyprus officials told Reuters they ruled out seizing bank deposits:

Cyprus’s new finance minister on Friday ruled out a haircut, or imposed losses, on bank deposits to ease a financial bailout from international lenders, now stalled amid worries about debt sustainability.

Really and categorically – and this doesn’t only apply in the case of Cyprus but for the world over and the euro zone – there really couldn’t be a more stupid idea,” Michael Sarris, who took over his post on Friday, told reporters.

By the end of that same month, Cyprus had stolen 60% of bank deposits over 100,000 Euros.

Governments will steal your money if they want to.

But it could never happen here.

123 Responses to “Greece Plans Cyprus-Style Raid on Bank Deposits”

  1. So relax.

    Patterico (3cc0c1)

  2. Sure, relax! 😉

    I wonder if they would steal cash from our safe deposit boxes here…

    Patricia (5fc097)

  3. I wonder if they would steal cash from our safe deposit boxes here…

    They absolutely would.

    Patterico (3cc0c1)

  4. it figures:

    Critics accuse Prime Minister Alexis Tsipras, a 40-year-old former student protest leader, of gambling Greece’s future by calling a plebiscite with eight days’ notice after negotiations with the European Union, European Central Bank and International Monetary Fund hit a wall.

    They point out that the offer Greeks will vote on is no longer on the table and the question is worded in cryptic legalese, leading the Council of Europe, a major European rights watchdog, to say the plebiscite falls short of international standards of fairness.

    http://www.huffingtonpost.com/2015/07/04/greece-europe-economy-crash_n_7726450.html

    elissa (ef926b)

  5. Of course it couldn’t happen here.

    Bank deposits in the US are in dollars, not Euros.

    JWB (aedb59)

  6. We are so effin effed

    JD (addbc4)

  7. The reason I ask about raiding our safe deposit boxes (not that I have any cash there, Mr. Koskinen!) is that I read that years ago, people in Soviet Russia heard that we have locked boxes here that no one from the government can open. They were amazed at the freedom and privacy.

    We’re losing that. We’ve lost that.

    Just had to allow my Smart Meter for gas to be installed yesterday so they can keep track of my usage… and to turn it off from the master switch when they deem necessary.

    Patricia (5fc097)

  8. Greece is not Cyprus. Or Cyprus is not Greece. Either way.

    And if you want to worry about something, Greek banks’ fractional reserves are 40%. American banks’ are 15% I believe?

    nk (dbc370)

  9. I don’t know if it’s any comfort, but if the US tried to do that they’d be violating the Fifth Amendment. Of course, with Obama the Constitution and the Bill of Rights dont represent an impediment to allowing him to do what he knows is right, but I doubt the succeeding President will be quite so inclined.

    Steven Den Beste (99cfa1)

  10. Steven – When has the Constitution ever proven to be any obstacle for these asshats?

    JD (3b5483)

  11. Why couldn’t it happen here? The gov’t already seizes money without warrants, just based on a “feeling” that the money is for nefarious purposes (somewhat strangely, Holden was putting out notifications that agencies need to stop doing that). To me it seems anything in a bank account that is over the guarantee amount is liable to a taking.

    seeRpea (0cf003)

  12. I don’t know why you call it stealing. How’s it different from any bankruptcy? The Cypriot banks could’t pay their debts, so they were effectively bankrupt; after insured creditors were paid in full, uninsured creditors got 40 cents on the dollar. Why do you think that’s unreasonable? What happens to any bankrupt company here? When a bank goes bust here, what happens to deposits over the $200K that the FDIC insures?

    And what makes you think they’d break into safety deposit boxes, which are private property?

    Milhouse (a04cc3)

  13. What I think people are not understanding is that your bank accounts is not your money, it’s a debt that the bank owes you. Despite the word “deposit”, you don’t actually deposit your money with the bank for safekeeping, you lend it to the bank, which is why the bank is allowed to lend it to other people. You “have money in the bank” in the same way that the local grocery “has money” with you when you run up a tab. It’s not money, it’s a debt, which can be discharged in bankruptcy.

    What’s in your safety deposit box, though, isn’t a debt, it’s your actual property, just as if you lend someone your car and they go bankrupt you get your car back.

    Milhouse (a04cc3)

  14. Milhouse is correct, Cyprus didn’t steal the money, the banks in Cyprus lost it.

    Greek banks are in bad shape because they have a lot of bad loans what with the Greek government about to default and the Greek economy in freefall. They can’t possibly pay back their depositors without a bailout which no one seems inclined to provide.

    James B. Shearer (84bde5)

  15. So they should just take it from the depositors. Because, why?

    JD (3b5483)

  16. Will obama help putin take control of Greece?

    mg (31009b)

  17. People like Shearer should never be allowed to control more than a nickel of other people’s money.

    JD (addbc4)

  18. Why is it that Leftists act like this is something that just happened to Cyprus? Happened to Greece? This notion that it wasn’t foreseeable and known that their reckless spending ended up exactly at the only spot where it could end up, yet bemoan that wah nobody seems to be inclined to bail them out. Again. And again. And again.

    JD (addbc4)

  19. Cyprus was like our subprime mortgage “crisis”, but, let’s say, happening in the Caymans instead of here. Cypriot banks were overleveraged and the Cypriot government was not in a position to bail them out the way we were with TARP. One reason was that Cypriot banks were trying to attract foreign depositors, especially Russian kleptocrats, with unrealistically high rates of return; another was local real estate bubbles.

    nk (dbc370)

  20. Greece’s socialistic, urban-American way of thinking and voting, and the amoral, greedy, pro-enabler bankers of the EU, etc, deserve one another. I don’t have much sympathy for either side, but I do feel sorry for the minority of people who’ve been repulsed by the lazy-liberal-graspy politics in that part of the world and, for that matter, elsewhere too.

    In effect, much of the globe is like one big Greece.

    Mark (e584c3)

  21. Credit card companies flooded the Greek market with offers they wouldn’t refuse.

    mg (31009b)

  22. 15.So they should just take it from the depositors. Because, why?

    They aren’t taking it from the depositors, the money is already gone. Like with Madoff.

    James B. Shearer (84bde5)

  23. Here is the skinny on the imminent demise of the EU via its banks.

    http://www.zerohedge.com/news/2015-07-04/greek-bluff-all-its-glory-presenting-grexit-falling-dominoes

    Our Fed and investment banks are outside the article’s scope.

    DNF (208255)

  24. 60% of Amerikkkans consider the Federal government a threat to life and well-being.

    http://www.breitbart.com/big-government/2015/07/04/time-for-the-states-to-declare-independence-from-the-federal-government/

    Wonder where heart disease ranks.

    DNF (208255)

  25. It isn’t “already gone” or they wouldn’t be negotiating percentages. Is there any bad behavior and poor fiscal mgmt that a leftist won’t apologize for as long as their intentions were correct?

    JD (3b5483)

  26. Re: #24. And the other 40% make a living off the same government either through employment or subsidies.

    Rev. Barack Hussein Hoagie (f4eb27)

  27. Early signs are that the electorate of Greece is voting “no” on today’s referendum — or giving the finger to the EU — which align with the sentiments of much of the left in and many of the elected officials of that country. This is one instance where I, although on the right, share those sentiments.

    The banking industry worldwide is full of greedy crony capitalists along the lines of Hillary and Barack, and let’s-vote-for-secretive-trade-deals Republicans—with the IRS rounding up the rear.

    Buckle up, people, we may be in for a bumpy ride.

    Mark (e584c3)

  28. 25.It isn’t “already gone” or they wouldn’t be negotiating percentages …

    So you think the Greek banks have plenty of money and could easily pay their depositors but the Greek government is about to grab the money instead?

    James B. Shearer (84bde5)

  29. I think you are a dishonest twit. I never said that which you attribute to me.

    JD (3b5483)

  30. I wouldn’t trust leftists like Shearer With a nickel of my own money.

    JD (3b5483)

  31. This could all be avoided if only someone were inclined to give them more money. It is simply just some random thing that just happened to them. Unavoidable. If only they had more of other people’s money to give away.

    JD (3b5483)

  32. 30.I wouldn’t trust leftists like Shearer …

    Your leftist radar appears to be broken. I am not a leftist as shown for example by my opposition to immigration.

    James B. Shearer (84bde5)

  33. 31.This could all be avoided if only someone were inclined to give them more money …

    Actually it could be. Until recently the ECB has been providing Greek banks “liquidity” assistance based on the pretense that their collateral is good. Since their collateral is in fact garbage this amounted to a multi-billion Euro handout. The ECB finally turned off the spigot creating the current crisis.

    … It is simply just some random thing that just happened to them. …

    No, it is the culmination of years of bad policy starting with the decision to admit Greece to the Euro in the first place.

    James B. Shearer (84bde5)

  34. So they should just take it from the depositors. Because, why?

    How are depositors different from any other creditors? What happens when any company (or individual) can’t pay its debts? All the creditors get paid a percentage.

    Shearer: They aren’t taking it from the depositors, the money is already gone. Like with Madoff.

    JD: It isn’t “already gone” or they wouldn’t be negotiating percentages.

    Shearer: So you think the Greek banks have plenty of money and could easily pay their depositors but the Greek government is about to grab the money instead?

    JD: I think you are a dishonest twit. I never said that which you attribute to me.

    Shearer is 100% correct, and JD is being a twit. There is only one way to read JD’s claim that the money isn’t “already gone”, which is that it’s still there. Shearer’s restatement of JD’s claim is completely accurate.

    The money is obviously gone; that is the whole problem. If the money were there, there wouldn’t be a crisis! It’s precisely because the banks don’t have all the money they owe people, and can’t get it, that they have a problem. And the way such problems are usually resolved, in every civilised country, is for the creditors to be paid a percentage of what they are owed and write off the rest.

    This process is always accompanied by intense negotiations about the percentage to be paid. Madoff’s victims were and are subject to the exact same process. Every time the adminstrator finds more money that can be recovered, every creditor gets a percentage, and they’re watching him carefully to make sure he sets that percentage as high as feasible.

    Milhouse (a04cc3)

  35. You know, any Greek stupid enough to have more than a hundred or two hundred Euro’s at most in their bank account as of last week deserves to have their Euro’s taken to recapitalize Greek banks. There are no Governmental restrictions on Greek citizens having bank accounts in other Eurozone countries (individual banks can say no legally, but there are plenty of banks that would have accepted accounts of Greeks).

    Jeffrey (cd2f00)

  36. Milhouse -‘I wear that as a badge of honor coming from you two.

    Explain to me this – if it really is all gone POOF why are they discussing negotiating various percentages to steal? Why discuss stealing 30% of deposits over x dollars, or 40% of deposits over y dollars? If it is all gone POOF why not 100% of all uninsured deposits?

    JD (addbc4)

  37. Shearer – conservatives don’t oppose “immigration”. Nice try.

    JD (addbc4)

  38. The ECB finally turned off the spigot creating the current crisis.

    Wrong answer. That they finally did the right thing did not create this crisis. Leftist Greek policies did.

    JD (addbc4)

  39. Actually, JD, if it’s all gone there’s nothing to discuss. So Poof! becomes an understatement.

    Rev. Barack Hussein Hoagie (f4eb27)

  40. I guess the Greeks finally ran out of other people’s money.

    Rev. Barack Hussein Hoagie (f4eb27)

  41. Some express wonderment that EU banks loaned money to Greece.

    A seven-year bund pays 1%, the Greek 15%, mystery banished.

    DNF (91649c)

  42. Milhouse -‘I wear that as a badge of honor coming from you two.

    Explain to me this – if it really is all gone POOF why are they discussing negotiating various percentages to steal? Why discuss stealing 30% of deposits over x dollars, or 40% of deposits over y dollars? If it is all gone POOF why not 100% of all uninsured deposits?

    They are not discussing stealing anything. That is your dishonest characterization. They are discussing what percentage of the banks’ debts can be paid, exactly as happens in every bankruptcy. The reason they can’t pay 100 cents on the euro is precisely because the money isn’t there. If it was there there would be no bank crisis and no negotiations!

    Milhouse (a04cc3)

  43. Actually, JD, if it’s all gone there’s nothing to discuss. So Poof! becomes an understatement.

    No, it’s not all gone, any more than Madoff’s money was all gone, or most bankrupts’ money is all gone. Usually there is something left, and creditors get something back.

    Milhouse (a04cc3)

  44. 37.Shearer – conservatives don’t oppose “immigration”. Nice try.

    I didn’t claim that I am a conservative just that I’m not a leftist. As an another example I thought the SCOTUS gay marriage ruling was absurd.

    James B. Shearer (84bde5)

  45. Sweet baby Jesus. I am trying to figure out which of you is being more absurd.

    JD (3b5483)

  46. 12. …And what makes you think they’d break into safety deposit boxes, which are private property?

    Milhouse (a04cc3) — 7/4/2015 @ 10:48 pm

    “Because that’s where the money is.”

    Sutton’s Law.

    Steve57 (4c9797)

  47. I don’t know if it’s any comfort, but if the US tried to do that they’d be violating the Fifth Amendment.

    It’s not. Survives as a tax.

    How did FDR’s gold grab survive the Fifth Amendment?

    Patterico (3cc0c1)

  48. By the way, the Greek government is not treating safety deposit boxes as if they’re anything but government property.

    Greeks not only can’t withdraw more the 50 euros a day (the banks ran of 20 euro notes) they are not allowed to access the contents of their safety deposit boxes.

    Of course it’s charming that anyone would think far-left Syriza is a hotbed of respect for private property in the first place. The Greeks with any money or who still have jobs are under no such illusions. They’re asking their employers not to pay them on time. A spokesman for the Hellenic Chamber of Commerce notes that they have more faith that their employers will hold onto their pay for safekeeping than they trust their government not to steal it.

    Steve57 (4c9797)

  49. By the way, the Greek government is not treating safety deposit boxes as if they’re anything but government property.

    Greeks not only can’t withdraw more the 50 euros a day (the banks ran of 20 euro notes) they are not allowed to access the contents of their safety deposit boxes.

    Absolutely correct.

    Greeks cannot withdraw cash left in safe deposit boxes at Greek banks as long as capital restrictions remain in place, a deputy finance minister told Greek television on Sunday.

    Greece’s government shut banks and imposed capital controls a week ago to prevent the country’s banks from collapsing under the weight of mass withdrawals.

    Deputy Finance Minister Nadia Valavani told Alpha TV that, as part of those measures, the government and banks had agreed at the time that people would also not be allowed to withdraw cash from safe deposit boxes.

    “Poof” is the sound of Milhouse’s portrayal of all this going up in smoke. No, it is not a normal, orderly bankruptcy, as Milhouse would have you believe. It is the government talking about stealing people’s money. Just as they did in Cyprus.

    If Milhouse’s portrayal were accurate, people could take cash from their safety deposit boxes. Or does Milhouse think that’s a “loan” too??

    Patterico (3cc0c1)

  50. and there are already politicos from Brussels calling for Greece to be given a waiver,
    allowed to stay in the Euro and to have most of the debt obsoleted.

    Yeah, that will teach countries to stay within their means.

    seeRpea (0cf003)

  51. What is Dennis Hastert on trial for? Would anybody like to let the DEA, the Treasury Department, or the DOJ know that they $10,000 or more in cash, whether in a safe deposit box or in a suitcase at the airport?

    And what is fractional reserve banking? And why would you not want a run on banks when you have fractional reserve banking?

    nk (dbc370)

  52. How did FDR’s gold grab survive the Fifth Amendment?

    It was a taking for which compensation was paid at market rates.

    Milhouse (a04cc3)

  53. They were paid $20.67 per Troy ounce, which was then the official rate.

    Milhouse (a04cc3)

  54. Patterico, I haven’t been able to find out much about why cash in safe deposit boxes can’t be taken out; every report I’ve found seems to be based on the same statement by the minister, which didn’t go into details, but seems to relate it somehow to the capital controls. I don’t really see how it’s connected, but that one statement is all anyone seems to have to go on.

    As far as Cyprus is concerned, once again I don’t understand why you claim anything was stolen. Uninsured creditors of one bank that was in very bad trouble had the value of the debt they held written down, and received shares in the bank in return. If the bank should ever recover from this disaster and start growing, those shares might become worth something. But it sounds to me much like what might happen in a bankruptcy. What difference do you see?

    Milhouse (a04cc3)

  55. POOF!

    JD (3b5483)

  56. Many Greeks foresaw a run on the banks and started hoarding cash months ago. Some under the mattress, some in safe deposit boxes.

    nk (dbc370)

  57. If Milhouse’s portrayal were accurate, people could take cash from their safety deposit boxes. Or does Milhouse think that’s a “loan” too??

    If the bank is closed, how do you get to the safe deposit box if it is in the bank?

    But prohibiting access is not the same as stealing. Unless the government demands people turn over their physical cash to the government. Which would affect more than just money in safety deposit boxes. Or if the government issued drachmas and declared euros worthless inside Greece. Which again would affect more than money held in boxes.

    kishnevi (294553)

  58. What’s happening in Greece is small πατάτες compared to China, where a stock market crash has seen $3.2 trillion wiped from the value of Chinese shares in just three weeks.

    Colonel Haiku (2601c0)

  59. Omigosh, Haiku. I hope this doesn’t mean I won’t be able to find my favorite flavor of civet cap poop coffee.

    nk (dbc370)

  60. Not to worry, nk… availability of the earthy, effervescent egesta should be unaffected.

    Colonel Haiku (2601c0)

  61. Should they be excluded from the EU, teh Greeks plan a return to their previous currency, the “duquis”

    Colonel Haiku (2601c0)

  62. What’s a duquis?

    nk (dbc370)

  63. 52. …It was a taking for which compensation was paid at market rates.

    Milhouse (a04cc3) — 7/7/2015 @ 12:40 am

    53. They were paid $20.67 per Troy ounce, which was then the official rate.

    Milhouse (a04cc3) — 7/7/2015 @ 12:46 am

    The official rate was not the market rate, Milhouse. It was arbitrary, and it had been in effect for some time. The whole point of stealing privately-held gold was so FDR could bail out the Federal Reserve. Because of the Depression there was the start of a gold run. Foreign holders of gold-clause notes tried to exchange them for physical gold, and neither the Treasury or the Reserve had anywhere near enough gold on hand. The market rate was creeping up from the official government rate precisely because people lost confidence in the gold clause notes.

    So the government forced private holders of gold to sell at the artificially low rate. That increased the supply of gold held by the government. In fact, because the government controlled the supply withing the the year FDR raised the price of gold to $35/ounce. It was a classic guy low (at the point of a gun) sell high strategy. FDR could debase the currency and cause inflation. Now foreign holders of gold-clause notes had to pay nearly twice as much for an ounce of gold.

    It was a theft of private wealth pure and simple. And yes it was no doubt unconstitutional.

    Steve57 (4c9797)

  64. If the bank is closed, how do you get to the safe deposit box if it is in the bank?

    According to reports, the banks are opening to let people visit their boxes, and take out anything they like except cash. But it all seems to boil down to one statement by the minister; every report cites that same statement, which doesn’t explain anything.

    Milhouse (a04cc3)

  65. There was no functioning market; the value of the US dollar was by definition 1/20.67 troy oz., because that’s what the US treasury said it was. Then the dollar was devalued to 1/35 of a troy oz.

    It was a theft of private wealth pure and simple. And yes it was no doubt unconstitutional.

    How so? What part of the constitution did it violate? The constitution explicitly authorizes the taking of private property in return for just compensation.

    Now there was something blatantly unconstituional about that whole deal, but it wasn’t the forced purchase of everyone’s gold. It was the cancellation of gold value clauses in government contracts. The Supreme Court even held that it was unconstitutional, but that the victims couldn’t recover damages.

    Milhouse (a04cc3)

  66. It’s pretty simple, Milhouse. Capital controls are simply restrictions on how much money people can remove from the banking system. And the restriction on removing money from safe deposit boxes are part of the package of capital controls that the Greek government imposed a week ago when they closed the banks.

    The Greek government doesn’t want anyone moving any money out of Greece, or even taking it home and burying it in the backyard or stuffing it into a mattress.

    And it’s not hard to read the writing on the wall. The Greek government is considering that it may need that money more than the depositors. Whether that money is in an account or in a safe deposit box.

    Steve57 (4c9797)

  67. It’s pretty simple, Milhouse. Capital controls are simply restrictions on how much money people can remove from the banking system.

    Yes, but stuff in safe deposit boxes aren’t in the banking system.

    Milhouse (a04cc3)

  68. It’s a good thing FDR is not President of Greece.

    nk (dbc370)

  69. Milhouse, when our government seizes a citizens property it seizes their safe deposit boxes too. Why is this a surprise?

    Rev. Barack Hussein Hoagie (f4eb27)

  70. Stuff in safe deposit boxes certainly are in the banking system. They’re in a bank aren’t they? Who’s responsible for their security? If they’re on the property they are in the system. Remember, you don’t own the safe deposit box, you rent it. From who? If these boxes were not in the system there wouldn’t be specific rules as to what a person is permitted to put in them. Didn’t know that, did ya?

    Rev. Barack Hussein Hoagie (f4eb27)

  71. 66. There was no functioning market; the value of the US dollar was by definition 1/20.67 troy oz., because that’s what the US treasury said it was. Then the dollar was devalued to 1/35 of a troy oz.

    There is always a functioning market. Sometimes it’s a legal free market, and sometimes it’s a black market. It doesn’t matter if the Cuban government says its Peso trades one for one with the US dollar or the Zambian government says the same about its Kwacha. That’s the official exchange rate. The market exchange rate is vastly different.

    The same with gold in the 1930s. It was a artificial price cap; that’s why there were gold runs on the banks within the US as well. Americans weren’t stupid. They were trading in their gold certificates for gold because the market rate, the actual value of the gold, was higher than $20.67/oz.

    How so? What part of the constitution did it violate? The constitution explicitly authorizes the taking of private property in return for just compensation.

    Milhouse (a04cc3) — 7/7/2015 @ 2:42 pm

    That wasn’t the rationale. The owners of the gold weren’t being justly compensated. The courts simply ruled the confiscation was necessary. They never got to the question of constitutionality.

    Steve57 (4c9797)

  72. The lower federal courts simply accepted the government’s assertion that it was acting out of necessity.

    https://mises.org/library/great-gold-robbery-1933

    The Great Gold Robbery of 1933
    August 13, 2008 Thomas E. Woods, Jr.

    …The Court never pronounced upon the constitutionality of the gold seizure (for reasons we speculate on in our book), the legality of which it simply took for granted. The cases it chose to hear involved the cancellation of gold clauses in public and private contracts. Known as the Gold Clause Cases, Norman v. Baltimore & Ohio Railroad Co., Nortz v. United States, and Perry v. United States were argued in January 1935 and decided the following month. In each case Chief Justice Charles Evans Hughes wrote the opinion for the Court; Justice McReynolds composed a single dissent that he applied to all three.

    The Court declared in the first two cases that the federal government had been entitled to cancel all private contracts in gold. The perpetuation of gold clauses would have amounted to the “attempted frustration” of “the constitutional power of the Congress over the monetary system of the country…. [T]hese clauses interfere with the exertion of the power granted to the Congress.” Not a stitch of evidence existed for any aspect of this argument…

    Steve57 (4c9797)

  73. By the way, just as in the 1930s there is still a difference between the official value of US-owned gold and the market value of gold.

    https://www.fiscal.treasury.gov/fsreports/rpt/goldRpt/goldRpt_home.htm

    Status Report of U.S. Treasury-Owned Gold

    The Status Report of U.S. Treasury-Owned Gold (Gold Report):

    Reflects gold bullion and gold coins owned by the federal government
    Summarizes the fine troy ounces and the book value of gold held by various facilities
    Identifies the value of gold coins and bullion on display at Federal Reserve banks; coins and bullion in reserve at the Federal Reserve Bank of New York; and gold held by U.S. Mint facilities

    The book value of gold is currently $42.2222 per troy ounce. The information used to compile this reporting is received from the U.S. Mint, Federal Reserve banks, and the Bureau of the Fiscal Service.

    Current Report: May 31, 2015

    US gold reserves are officially valued at $42.2222/oz. The market value today is $1155/oz.

    Steve57 (4c9797)

  74. Stuff in safe deposit boxes certainly are in the banking system. They’re in a bank aren’t they? Who’s responsible for their security? If they’re on the property they are in the system. Remember, you don’t own the safe deposit box, you rent it. From who? If these boxes were not in the system there wouldn’t be specific rules as to what a person is permitted to put in them. Didn’t know that, did ya?

    Money in safe deposit boxes is not on deposit with a bank. They are merely physically deposited with the bank. They are not in the system in the same way as money in your checking account is. You can even have safe deposit boxes in non banks. Storage facilities are a big version of safe deposit boxes.

    If there is a run on the bank, you might lose the money in the checking account but not the box….

    Think of it this way: the bank pretends to pay interest on money in accounts, and charges fees based on how much is in them. The bank charges a straight rental fee for a box based on its size, what you choose to store there being quite literally none of the bank’s business (which is why they normally need to go to court to open a box without the permission if the box’s lessee).

    The government might try to grab money in those boxes, and if so it would also try to grab money in people’s wallets. There is no conceptual difference.

    kishnevi (91d5c6)

  75. If the Greek government is (or is planning to) confiscate money in safe deposit boxes that is a different matter for which the term theft is more applicable. Did this happen in Cyprus?

    However it is perfectly normal for uninsured depositors in insolvent banks to receive less than 100% when the banks are closed by the government. This web page lists (when you select all banks) payouts for failed US banks since 2000. Do you believe the US government stole the unpaid balances?

    James B. Shearer (84bde5)

  76. Stuff in safe deposit boxes certainly are in the banking system. They’re in a bank aren’t they?

    No, it’s not in the banking system. It’s physically on the premises of a bank, just like the bricks and the furniture, but it is not in the national banking system. It doesn’t count towards the bank’s liquidity, it isn’t available for lending or investment, as far as the banking system is concerned it may as well be ordinary paper.

    Milhouse (a04cc3)

  77. There is always a functioning market. Sometimes it’s a legal free market, and sometimes it’s a black market.

    Just compensation under the takings clause does not include black market rates! $20.67 an ounce was the only legally available price of gold, and that is the only measure the constitution cares about.

    The constitution explicitly authorizes the taking of private property in return for just compensation.

    That wasn’t the rationale. The owners of the gold weren’t being justly compensated. The courts simply ruled the confiscation was necessary. They never got to the question of constitutionality.

    They never got there because nobody ever challenged it, because there were clearly no grounds to challenge it. The constituition clearly authorized the taking. If you think they were not justly compensated, why don’t you tell us how much the constitution said they should have got, and why?

    Milhouse (a04cc3)

  78. …The Court never pronounced upon the constitutionality of the gold seizure (for reasons we speculate on in our book), the legality of which it simply took for granted.

    There’s no need for speculation; the legality was taken for granted because it was obviously legal. If you disagree please explain why.

    Milhouse (a04cc3)

  79. It was a taking for which compensation was paid at market rates.

    Bull. Shit.

    Patterico (3cc0c1)

  80. There’s no need for speculation; the legality was taken for granted because it was obviously legal. If you disagree please explain why.

    It’s obviously legal to steal stuff. If you disagree please explain why.

    Patterico (3cc0c1)

  81. POOF!

    Patterico (3cc0c1)

  82. Patterico, are you serious? Stealing is obviously illegal. For the government to steal is specifically forbidden by the constitution — in the same clause that lets it take property with just compensation, which the gold owners got. That is not bullshit, it’s what happened, and if you claim otherwise you are the one slinging bullshit.

    Milhouse (a04cc3)

  83. Patterico, are you serious? Stealing is obviously illegal. For the government to steal is specifically forbidden by the constitution — in the same clause that lets it take property with just compensation, which the gold owners got. That is not bullsh*t, it’s what happened, and if you claim otherwise you are the one slinging bullsh*t.

    Milhouse (a04cc3)

  84. I guess you and I have a different view of “just” compensation. They grabbed the gold, severely devalued it, and gave diluted paper money in return. How fair! How “constitutional”!

    Remind me never to leave you in charge of anything that might affect me.

    No wonder Texas wants its gold back, physically within its borders.

    Patterico (3cc0c1)

  85. Patterico, are you serious?

    I love the “are you serious?” “argument.”

    I encountered that one recently on Facebook, from a former colleague who pretended to be ASTOUNDED that I thought Justice Thomas’s dissenting remarks on “dignity” were correct.

    Could I possibly be serious?!?!

    Yes. And I am here.

    Patterico (3cc0c1)

  86. Please provide your address so that I may come divest you of your property and give you “just” (highly devalued) “compensation” in return.

    Patterico (3cc0c1)

  87. I guess you and I have a different view of “just” compensation. They grabbed the gold, severely devalued it, and gave diluted paper money in return. How fair! How “constitutional”!

    They paid the long-standing legal value. Do you dispute that the government has the legal right to take your property and pay just compensation? If you think $20.67 an ounce was not just compensation, please explain. If you were a judge in the 1930s, and the case came before you, what compensation would you set, and if it was more than $20.67 how would you justify it?

    Milhouse (a04cc3)

  88. I read Wilson’s “The Road Away From Revolution”. They were scared spitless that there would be a Bolshevik-style uprising if they did not placate the masses. Wilson (and I imagine it took several re-writes by his speech writers) couched it in terms of Christianity, social justice and democracy, but it was the haves afraid of what the have-nots would do if they got too hungry.

    nk (dbc370)

  89. Patterico, how do you understand the takings clause? If you think it doesn’t apply to the gold seizure, please explain why.

    Milhouse (a04cc3)

  90. 79. …If you disagree please explain why.

    Milhouse (a04cc3) — 7/7/2015 @ 9:49 pm

    The lower courts just accepted it as legal exercise of the government’s authority because they accepted the Roosevelt administration’s argument that was necessary to maintain public order. As far as the SCOTUS is concerned you should have learned in your first year of law school that you can’t infer anything as far as precedent when it doesn’t take the case.

    83. Patterico, are you serious? Stealing is obviously illegal. For the government to steal is specifically forbidden by the constitution — in the same clause that lets it take property with just compensation, which the gold owners got. That is not bullsh*t, it’s what happened, and if you claim otherwise you are the one slinging bullsh*t.

    Milhouse (a04cc3) — 7/7/2015 @ 10:10 pm

    Milhouse, are you nuts? Stealing is exactly what FDR did. They needed to control the gold supply in order to debase the currency and cause inflation. You had a month to sell your gold to a single buyer. You had to sell it to that buyer at the official government rate. Unless you could afford to travel abroad with your gold, and you may recall reading there was a severe depression on. Very few people, even if they had gold, could do that.

    As of 31 May 2015 the official government value of gold is $42.2222/oz. It has been the same for at least five years, and since it’s been the same for years, I’m sure it is still the same today.

    Yet you can sell gold on the free market for $1155/oz.

    If you had gold, and the government confiscated it today, and paid you only the official rate of $42.2222/oz. you couldn’t possibly say you received just compensation.

    That’s what happened in 1933.

    It was theft pure and simple then. It would be theft pure and simple now. FDR wasn’t above it. Neither will the leftists of Syriza.

    66. …Now there was something blatantly unconstituional about that whole deal, but it wasn’t the forced purchase of everyone’s gold. It was the cancellation of gold value clauses in government contracts. The Supreme Court even held that it was unconstitutional, but that the victims couldn’t recover damages.

    Milhouse (a04cc3) — 7/7/2015 @ 2:42 pm

    As you note there were people who had suffered damages. Why? Because these people who had government contracts were not receiving just compensation. They were being paid in debased currency.

    And the people who had their physical gold confiscated suffered the exact same damages. The government simply relieved them of 40% of their wealth.

    I don’t know what else to call that except stealing.

    Steve57 (4c9797)

  91. It appears from Milhouse’s link (#66) that from the time FDR announced his heist, it was illegal to travel abroad/send your gold abroad and sell it for a better price.

    (d) Congress, by virtue of its power to deal with gold coin as a medium of exchange, was authorized to prohibit its export and limit its use in foreign exchange, and the restraint thus imposed upon holders of such coin was incident to their ownership of it, and gave them no cause of action. P. 294 U. S. 356.

    …(h) Foreign dealing being forbidden, save under license, and the domestic market being not free, but lawfully restricted by Congress,

    So, no, you couldn’t travel abroad and take advantage of free markets. You had to sell it at the official rate to the officials who set the rate.

    And that is not and never has been just compensation.

    Steve57 (4c9797)

  92. For the government to steal is specifically forbidden by the constitution

    Milhouse, your comment makes me think of the line in the movie “Casablanca,” where a Vichy French police officer, when entering a secretive casino, proclaims “I’m shocked, shocked to find that gambling is going on in here.” But I’m assuming you’re also being a bit sarcastic about what the US government will or won’t do based upon the Constitution.

    BTW, I hope you saw an article in the New York Times over the past year or so that detailed the way government officials working for America’s trusted name brand, the IRS, have been seizing the assets of citizens based upon nothing but pure suspicion.

    Mark (710c48)

  93. Steve, the legality of the seizure was so obvious that nobody bothered challenging it. Any challenge would have been thrown out in a second. The constitution explicitly authorizes it. Even if they did it today, the only thing anyone could possibly argue over would be the level of compensation.

    Today there is an open market for gold, so any court would set the compensation rate based on that. But going on past performance they’d probably set it based on the post-announcement rate, not on what it fetched before. The $42.2222 figure is just the book value of government-held gold, it does not purport to be the actual value. But in the 1930s the definition of the value of a dollar was 1/20.67th of a troy ounce of gold. Therefore no court in the land could possibly have found a higher value for the gold than $20.67 an ounce.

    The cancellation of the gold clauses in public contracts was unconstitutional because it was after the dollar was devalued. The government’s right to devalue the dollar at will was precisely why people made these clauses. When it issued those contracts the government solemnly promised that it would pay the value of so many ounces of gold at whatever the exchange rate would be when payment fell due, and it broke that promise. Mind you the abrogation of gold clauses in private contracts was perfectly constitutional; the constitution says states can’t do that, but pointedly refrains from saying Congress can’t do it. But it can’t legally do it to its own contracts.

    Milhouse (a04cc3)

  94. So, no, you couldn’t travel abroad and take advantage of free markets. You had to sell it at the official rate to the officials who set the rate.

    And that is not and never has been just compensation.

    That is what courts have been callin just compensation ever since the fifth amendment was ratified.

    Milhouse (a04cc3)

  95. So, no, you couldn’t travel abroad and take advantage of free markets.

    Of course you couldn’t; you’re the one who suggested you could. But just compensation has never been calculated according to what your property would fetch in some other place.

    Milhouse (a04cc3)

  96. 87. …They paid the long-standing legal value. Do you dispute that the government has the legal right to take your property and pay just compensation? If you think $20.67 an ounce was not just compensation, please explain…

    Milhouse (a04cc3) — 7/7/2015 @ 10:40 pm

    These days the long standing “legal value” for gold is $42.2222/oz. Please see my link to the Treasury Dept.

    Now, search on the market value of gold.

    Or better yet use this link.

    http://money.cnn.com/data/commodities/

    Here’s a snapshot:

    Gold
    Aug. 2015 contract
    $ / troy ounce 1,151.20 -1.40 -0.12%

    Now, ‘splain to me how the “long-standing legal value” of $42.2222/oz. is just compensation.

    Steve57 (4c9797)

  97. But I’m assuming you’re also being a bit sarcastic about what the US government will or won’t do based upon the Constitution.

    No, I wasn’t. The courts are not so far gone that tey’ll allow outright stealing.

    Civil forfeiture is certainly a huge problem, and needs reform. Congress already had a go at reforming it in the early days of the Gingrich revolution, but police and prosecutors got more clever at getting around the reforms. But in each of those cases the prosecutor is declaring, under oath and with a straight face, that the government has evidence that the asset was used in a crime. The problem is that most of the time the prosecutor is lying, and the onus is on you to prove it. That’s not relevant to what we’re talking about here. The government could never declare that all money in every bank account, or all gold held by anyone, was used in crimes; it would have to go after each person individually, and make an individual allegation in each case.

    Milhouse (a04cc3)

  98. These days the long standing “legal value” for gold is $42.2222/oz. Please see my link to the Treasury Dept.

    No, it isn’t. That’s merely the accounting value of the gold the treasury holds.

    Milhouse (a04cc3)

  99. 95. …But just compensation has never been calculated according to what your property would fetch in some other place.

    Milhouse (a04cc3) — 7/7/2015 @ 11:07 pm

    That’s how theft works, Milhouse. Abolish a free market in a moveable commodity, make it illegal to move that commodity, and BOOM! The gangster government can steal it for half the price.

    And that is not just compensation.

    Steve57 (4c9797)

  100. ==Steve, the legality of the seizure was so obvious that nobody bothered challenging it.==

    The passage of the Gold Reserve Act of 1934 signified that the American people could no longer hold gold, with the exception of jewelry and collectors coins. After the passage of the Gold Reserve Act several people were indicted for violating the clauses that restricted gold ownership and trade. Frederick Barber Campbell (who was actually convicted under the Gold Reserve Act’s predecessor, Executive Order 6102), was convicted of hoarding gold when he tried to withdraw 5,000 troy ounces of gold he had at Chase National bank. Gus Farber, a diamond and jewelry merchant was arrested with his father and 12 others for illegally selling $20 gold coins without a license. The Baraban family was arrested for operating a gold scrap business under a false license.[12] Foreign companies even had their gold confiscated. The Uebersee Finanz-Korporation, a Swiss banking company, had $1,250,000 in gold coins that were being held in the United States.

    In the Consolidated Gold Clause Cases (independently known as Perry v. U.S., U.S. v. Bankers Trust Co., Norman v. Baltimore & Ohio R. Co., Nortz v. U.S.) the Gold Reserve act was subject to scrutiny by the United States Supreme Court, which narrowly upheld Roosevelt’s gold confiscation policy.

    (Wikipedia)

    elissa (68414e)

  101. The courts are not so far gone that tey’ll allow outright stealing.

    You have more faith in the court system than I do, because, after all, the courts are ruled over by people, referring to human beings suffering from various flaws and shortcomings, evident recently in some of the key jurists on the US Supreme Court.

    Mark (710c48)

  102. 98. These days the long standing “legal value” for gold is $42.2222/oz. Please see my link to the Treasury Dept.

    No, it isn’t. That’s merely the accounting value of the gold the treasury holds.
    Milhouse (a04cc3) — 7/7/2015 @ 11:14 pm

    That is precisely how the price of gold was figured when FDR confiscated it on the cheap.

    You got what the government accountants said gold was worth. And because of the shakiness of the US economic system, market forces had already determined that gold was worth more than the government accountants were willing to admit.

    For obvious theft-oriented reasons.

    Steve57 (4c9797)

  103. 95. …But just compensation has never been calculated according to what your property would fetch in some other place

    .

    Milhouse (a04cc3) — 7/7/2015 @ 11:07 pm

    That’s how theft works, Milhouse. Abolish a free market in a moveable commodity, make it illegal to move that commodity, and BOOM! The gangster government can steal it for half the price.

    And that is not just compensation.

    There was no market to abolish. A dollar was 1/20.67 of an ounce of gold, so there was nothing for a market to work on. And prices in foreign markets are irrelevant to just compensation; tell me when they have ever been considered relevant. When the government takes your house, does it have to pay you according to what that house would be worth in some other place?!

    Milhouse (a04cc3)

  104. No, it isn’t. That’s merely the accounting value of the gold the treasury holds.
    Milhouse (a04cc3) — 7/7/2015 @ 11:14 pm

    That is precisely how the price of gold was figured when FDR confiscated it on the cheap.

    You got what the government accountants said gold was worth.

    Not true. There was no accounting involved; 1/20.67 oz was the definition of a dollar. It was impossible for it to be worth anything else. Nobody in the USA would have paid you more. Not only after the announcement, but before. The $42.22 value is nothing like that. It’s just an arbitrary number that the treasury uses for a specific purpose, and does not pretend that it has any relationship to the gold’s actual value. If the government were to take someone’s gold now, it would have to pay something approximating the market value.

    Milhouse (a04cc3)

  105. In the Consolidated Gold Clause Cases (independently known as Perry v. U.S., U.S. v. Bankers Trust Co., Norman v. Baltimore & Ohio R. Co., Nortz v. U.S.) the Gold Reserve act was subject to scrutiny by the United States Supreme Court, which narrowly upheld Roosevelt’s gold confiscation policy.

    That is not true. The confiscation was never at issue. The cases were about the gold clauses in contracts.

    Milhouse (a04cc3)

  106. 103. …There was no market to abolish. A dollar was 1/20.67 of an ounce of gold, so there was nothing for a market to work on. And prices in foreign markets are irrelevant to just compensation; tell me when they have ever been considered relevant. When the government takes your house, does it have to pay you according to what that house would be worth in some other place?!

    Milhouse (a04cc3) — 7/7/2015 @ 11:35 pm

    So, among other things we’ve established:

    1) You don’t know the difference between a market exchange rate and a government exchange rate.

    2) You don’t know the difference between real property and moveable goods.

    You don’t have a leg to stand on. The government paid an official rate of $20.67/oz. in 1933 when it confiscated private gold.

    If the government paid $42.2222/oz. when confiscating private gold today would that be just compensation?

    Yes or No? It’s no more complicated than that.

    Steve57 (4c9797)

  107. And yes, there was a market to abolish. That’s why the FDR administration needed export controls, licensing, and outlawing the possession of gold within the borders of the United States.

    Steve57 (4c9797)

  108. Milhouse, your arguments are such transparent bullshit that you should hide your head in shame. Saying it is just compensation for the President to seize everyone’s gold and replace it with currency that he deliberately devalues is like saying you could force someone to accept Zimbabwe fauxbucks at the height of their hyperinflation and never mind that it will be worth half tomorrow. These were the actions of a banana republic, and FDR was the only world leader Hitler admired for his willingness to do whatever he wanted and the process be damned.

    FDR was a sober Constitution follower, Cyprus stole nothing, Greece does nothing wrong by locking people out of their safety deposit boxes, and unicorns dance on sugarplums in Milhouse’s Magic Fantasy Land.

    Patterico (0869a7)

  109. If the government paid $42.2222/oz. when confiscating private gold today would that be just compensation?

    No, of course not, because that is not the value of the gold. Nobody claims it is. $42.22 is just a nominal book value. The dollar is no longer defined in terms of gold. But in 1933 it was, and 20.67 was the value of gold, by definition. And no, there was never a local market in gold, because it would have made no sense. Gold clauses were put in contracts in case the dollar was devalued. Nobody thought those clauses would be cancelled.

    Milhouse (a04cc3)

  110. So Patterico what would you have called just compensation? If you were a judge then, called on to determine how much the government should pay for the gold, how would you set the price, and how would you justify your decision?

    And please explain what was stolen in Cyprus. Who took the money? How was it different from any bankruptcy?

    Milhouse (a04cc3)

  111. 104. Not true. There was no accounting involved; 1/20.67 oz was the definition of a dollar. It was impossible for it to be worth anything else. Nobody in the USA would have paid you more…

    Milhouse (a04cc3) — 7/7/2015 @ 11:39 pm

    Yes, actually they would have paid you more. Especially because no one thought the government would actually stand by it’s promise and redeem 100% of the gold notes outstanding for their value in gold. That’s what the gold runs on the banks were all about. If you could have gotten 75 cents on the dollar instead of 60 cents on the dollar you would have.

    https://mises.org/library/great-gold-robbery-1933

    …As amended by the Emergency Banking Act of 1933, the Trading with the Enemy Act no longer said that simply “during time of war” could the president prohibit the export of gold or take action against “hoarding” (i.e., holding on to one’s money). Now these actions could be taken during time of war or “during any other period of national emergency declared by the President.”

    A month later, claiming authority from the Emergency Banking Act and its amendment to the Trading with the Enemy Act, the president ordered all individuals and corporations in America to hand over their gold holdings to the federal government in exchange for an equivalent amount of paper currency. The paper currency they were receiving in exchange for the gold had always been redeemable in gold in the past, so few saw anything amiss in this coerced transaction, and most trusted the government’s assurances that this was somehow necessary in order to combat the Depression. Only later would they discover that they weren’t getting that gold back, and that the paper dollars they were being given in exchange would be devalued.

    There is no way around it. This was stealing.

    Steve57 (4c9797)

  112. 2) You don’t know the difference between real property and moveable goods.

    The Takings clause does not distinguish between them. As the Court just found in the raisins case.

    Milhouse (a04cc3)

  113. Just because the Rockwell nuts say something doesn’t make it true, Steve. What market was there in the USA, and what price could gold legally be sold for? How was this different from any government taking of property, which happens all the time? How was it different from taking your house, or your raisins?

    The fact that the dollar was then devalued doesn’t make it stealing, any more than any other devaluation. Remember that there was no currency market until the end of the 1970s. Before then governments set the value of their currencies, and changed them at will. Devaluations and revaluations were a fact of life.

    But we’re losing sight of what this thread was originally about. If you call eminent domain stealing, I can’t argue with you. But that’s simply not what people mean by stealing. When you say FDR stole the gold, an ordinary person would take that to mean he simply took it without paying for it, and I just stepped in to say that’s not what happened.

    Milhouse (a04cc3)

  114. OMG it’s after 3am. I can’t keep my eyes open any longer. G’night

    Milhouse (a04cc3)

  115. 108. …Saying it is just compensation for the President to seize everyone’s gold and replace it with currency that he deliberately devalues is like saying you could force someone to accept Zimbabwe fauxbucks at the height of their hyperinflation and never mind that it will be worth half tomorrow. These were the actions of a banana republic, and FDR was the only world leader Hitler admired for his willingness to do whatever he wanted and the process be damned…

    Patterico (0869a7) — 7/8/2015 @ 12:04 am

    I went hunting in Zimbabwe in 2009, and on my first night in and my last night out I stayed at the same guesthouse in Harare. They had an extensive library, and as is my habit I read in the evenings. I pulled one book out and there was a Zim $1 trillion note in it as a bookmark.

    Half as much tomorrow? You’d be lucky if it was worth that from 9 – 5 on the same day.

    I recommend reading Three New Deals: Reflections on Roosevelt’s America, Mussolini’s Italy, and Hitler’s Germany, 1933-1939. By Wolfgang Schivelbusch.

    Steve57 (4c9797)

  116. I don’t know how many trillions of dollars I could have found if I had looked through those books.

    But stealing is stealing, even if none of those Zim trillion dollar bills would have been worth a nickel to later copy or scan and print off. So they’re all still in Harare. Or, at least they were when I left. I have no idea how they’re faring in Mugabe’s purges.

    Steve57 (4c9797)

  117. 113. …When you say FDR stole the gold, an ordinary person would take that to mean he simply took it without paying for it, and I just stepped in to say that’s not what happened.

    Milhouse (a04cc3) — 7/8/2015 @ 12:17 am

    No, to put it in automotive terms FDR decided he like the looks of your 2015 Corvette and so he took it from your garage and replaced it with a 2010 Corolla.

    Steve57 (4c9797)

  118. They were paid $20.67 per Troy ounce, which was then the official rate.

    Yeah, and then the President deliberately raised the official price of gold to $35 per ounce, which was always part of the two-step plan:

    1. Take the gold and give citizens (suckers) paper money in exchange.

    2. Deliberately cause the paper money to be worth far less.

    Yeah, how that is a problem in any way?

    It wasn’t just the seizure of the gold that was the theft. It was the two-step plan. But part 2 was contemplated when part 1 occurred.

    Inflation is a form of theft. Before the gold seizure, citizens had a way to protect themselves. Basically, FDR disarmed them and then robbed them.

    Patterico (3cc0c1)

  119. It’s interesting that most conservatives understand the importance of guns (and the dangers of gun confiscation by governments) but most fail to understand the importance of gold (and the dangers of gold confiscation by governments).

    Patterico (ae22b9)

  120. FDR went after coins and bullion. Stalin went after earrings and engagement rings, too.

    Currency control is one of the most important functions/powers/prerogatives/tools of tyranny/societal control tools (pick one or all) of government. That’s what the stupid Greeks did not see. The controls were in the hands of the big boys — Germany and France. Or maybe saw and didn’t care if it meant iPhones and Starbucks.

    Did I misunderstand your posts about fractional reserve banking and quantitative easing? Isn’t devaluing the currency in our pockets, paper and zinc that it is, what the government does when it puts more money in circulation without an attendant expansion of the economy?

    nk (dbc370)

  121. Did I misunderstand your posts about fractional reserve banking and quantitative easing? Isn’t devaluing the currency in our pockets, paper and zinc that it is, what the government does when it puts more money in circulation without an attendant expansion of the economy?

    Sure is.

    Patterico (3cc0c1)

  122. Wow! Just wow! http://www.telegraph.co.uk/finance/economics/11724924/Europe-is-blowing-itself-apart-over-Greece-and-nobody-can-stop-it.html

    Read the whole thing. Just a couple of appetizers:

    Greek premier Alexis Tsipras never expected to win Sunday’s referendum on EMU bail-out terms, let alone to preside over a blazing national revolt against foreign control.

    He called the snap vote with the expectation – and intention – of losing it. The plan was to put up a good fight, accept honourable defeat, and hand over the keys of the Maximos Mansion, leaving it to others to implement the June 25 “ultimatum” and suffer the opprobrium.

    And this little tidbit:

    This ultimatum came as a shock to the Greek cabinet. They thought they were on the cusp of a deal, bad though it was. Mr Tsipras had already made the decision to acquiesce to austerity demands, recognizing that Syriza had failed to bring about a debtors’ cartel of southern EMU states and had seriously misjudged the mood across the eurozone.

    Instead they were confronted with a text from the creditors that upped the ante, demanding a rise in VAT on tourist hotels from 7pc (de facto) to 23pc at a single stroke.

    Reposting this language warning cartoon: http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/06/Greece%20Oxi%20Vote_0.jpg

    nk (dbc370)


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