Bandit Gang Writ Large

Kwame Kilpatrick guilty: For destitute Detroit, downfall of ex-mayor complete

"Former Detroit Mayor Kwame Kilpatrick was found guilty Monday under federal corruption charges of scheming to enrich himself and his close confidants during his tenure in public office. The verdict, which was announced after 15 days of jury deliberations, concludes a saga that has gripped the destitute city for over two years and represents the staggering downfall of Mr. Kilpatrick. The tales of personal excess resulting from systemic graft arrives one day before the city tries to make a last-ditch attempt to fight the takeover of its troubled finances by an emergency financial manager." Continue reading →

Continue ReadingKwame Kilpatrick guilty: For destitute Detroit, downfall of ex-mayor complete

When Governments Take Your Money, Bitcoin Looks Really Good

"The tiny island of Cyprus became the center of the financial universe over the weekend, after its leaders, facing financial collapse and pressure from EU authorities, announced a plan that would let the government withdraw money directly from citizens' savings accounts in order to fund a massive bailout. That's the sound of Pandora's Box being opened. European officials are now proposing directly picking the pockets of their citizens by going straight for their banking deposits, a move that Reuters says has 'potentially severe consequences for the rest of the troubled euro zone.' Incidentally, it's also turning furious (and fearful) Europeans to Bitcoin." Continue reading →

Continue ReadingWhen Governments Take Your Money, Bitcoin Looks Really Good

Cyprus and the reality of banking: Deposit haircuts are both inevitable and the right thing to do

"My sympathies for Cypriot depositors is somewhat limited. If you are a depositor in a Cypriot bank, whether of deposits of more or less than €100,000, who did you think was guaranteeing your deposit? The Blue Fairy? Did you really think that in such a small place with such a bizarrely bloated banking system – one that for years and, by now, very publicly had been investing in Greek government bonds! – your government had the resources to protect all depositors? The bailout of Cyprus’ two largest banks will cost the equivalent of 60% of GDP! And after what happened in Greece, did you really think that the Germans were willing to cover the whole bill?" Continue reading →

Continue ReadingCyprus and the reality of banking: Deposit haircuts are both inevitable and the right thing to do

How German fears of underwriting Russian oligarchs pushed Cyprus to crisis

"German politicians and many of their European colleagues suspect Cyprus to be a tax haven and a money-laundering site for Russian oligarchs. Of the 68 billion euros stored in Cypriot bank accounts, around 20 billion ($26 billion) belong to Russian account holders. A report compiled last year by the German secret service, the Bundesnachrichtendienst, claims to have found evidence that Cypriot banks or Russian bank branches based in Cyprus are used to launder illegal money. Germany’s ruling coalition of conservatives and liberals is facing general elections in September, and politicians fear accusations they are sacrificing German tax money to bail out Russian billionaires." Continue reading →

Continue ReadingHow German fears of underwriting Russian oligarchs pushed Cyprus to crisis

Confidential Wikileaks Cable (US Embassy in Nicosia) on Russian Money in Cyprus

"Curiously, the imposition of a tax on money deposited in Cyprus banks will hurt many Russian tax evaders, as the Wikileaks released cable below highlights, the amount of money placed in Cyprus by Russians attempting to evade Russian taxes is significant relative to the overall Cyprus banking system. The imposition of the tax is surely going to cause a flight of these funds out of Cyprus to a more stable tax haven--which is likely to destabilize the Cypriot banking sector even more." Continue reading →

Continue ReadingConfidential Wikileaks Cable (US Embassy in Nicosia) on Russian Money in Cyprus

Driver’s Taxes and Other Money-Grabbing Schemes Throughout History

"Did you know that you need a license in Japan to be a sushi chef? It’s true. In Japan, you need a license to slice raw fish. You can bet that if the sushi restaurants in the USA were to become so popular that they stood on every street corner, the government would increase taxes on them by requiring a special license to slice fish; and why not? They tax you to go out on the water to catch them! Throughout the history of man there have been all sorts of ridiculous taxes levied on people by their overlords. The government claims they are doing it for the good of society, but it’s all a money scam. Here’s a short list of some of my, er, 'favorite' taxes through time." Continue reading →

Continue ReadingDriver’s Taxes and Other Money-Grabbing Schemes Throughout History

Economists warn Cyprus will face a recession ‘for decades’ after EU deposit tax

"The controversial tax is seen hitting Russian pockets hard, with experts estimating that Russian deposits in Cypriot banks amount to at least 15.4 billion euros of the estimated 67 billion euros of deposits held by Cyprus banks. Russian President Vladimir Putin criticised the proposed tax, describing it, according to a Kremlin spokesman, as 'unfair, unprofessional and dangerous'. Russian Prime Minister Dmitry Medvedev was equally forthright. 'We should say this directly: this simply looks like the confiscation of other people’s money,' Russian news agencies quoted him as saying. 'I do not know who the author of this idea is, but this is what it looks like.'" Continue reading →

Continue ReadingEconomists warn Cyprus will face a recession ‘for decades’ after EU deposit tax

A Fiscal Lesson in Cyprus for Americans

"Would the U.S. government ever do these sorts of things? Well, don’t forget that President Roosevelt did it during the Great Depression when he nationalized gold and made it a felony offense to own it, notwithstanding the fact that it had been the official constitutional money of the United States since the founding of the nation. FDR ordered Americans to deliver their gold to the federal government, which paid them off in cheapened, devalued, irredeemable notes. It was a confiscation of wealth no different in principle from that that was done by the Argentine government and that is now being conducted by the Cyprus government." Continue reading →

Continue ReadingA Fiscal Lesson in Cyprus for Americans

Gold Rises, Dollar Rises, Stocks Fall: The Cyprus Disaster Begins

"Over the weekend, Eurozone bureaucrats at a closed meeting came up with a plan. The committee demanded that the government of Cyprus impose a tax of 3% on all bank accounts under $130,000, and close to 10% on all accounts over $130,000. If the government refuses, the Eurozone will not provide a $13 billion bailout for the banks of Cyprus. The story is all over the European press, for good reason. The Eurocrats had always said that bank accounts would be sacrosanct. This announcement says, 'We lied.' But they also assured depositors that this will never happen again. 'Trust us.'" Continue reading →

Continue ReadingGold Rises, Dollar Rises, Stocks Fall: The Cyprus Disaster Begins

Believe a Politician and You Will Lose Your Money

"The president of Cyprus assured voters that he would never, ever tax their bank accounts. Now he says the government must do this. Any voter who heard this assurance should have gone to his bank immediately and withdrawn half of his money. Then he should have sent another 40% to a German bank. The other 10% he might have left in his bank to meet existing expenses. Anyone who left all of his money in the bank was a fool. He trusted the head of the country." Continue reading →

Continue ReadingBelieve a Politician and You Will Lose Your Money