'The Banking Crisis Is Over,' Say European Bureaucrats. Ho, Ho, Ho.

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Bureaucrats are paid well to lie. They are paid well to tell the voters not to worry, that everything is fine. This lets politicians say the same.

The banks in Cyprus remain closed. There is a $130 limit on daily withdrawals of currency out of an ATM. Capital controls keep depositors from wiring euros outside of Cyprus. The Parliament must agree to spending cuts. Maybe it won’t agree. In other words, nothing has been settled.

The previously unknown chairman (for one year) of the EuroGroup announced: “We’ve put an end to the uncertainty that has affected Cyprus and the euro area over the past week.”

Ho, ho, ho.

Christine Legarde, head of the International Monetary Fund, announced: “We believe that this will form a lasting, durable and fully financed solution.”

Ho, ho, ho.

The finance minister from Ireland, who a week ago had voted as a member of the EuroGroup to require a tax on all Cypriots’ deposits to help bail out the nation’s banks, announced: “We would never hit depositors in Ireland, we believe the €100,000 is absolutely sacrosanct and there is absolutely no circumstances in which we would touch depositors because they are guaranteed and that guarantee applies across the euro zone.”

Ho, ho, ho.

Voters are naive. They want to believe bureaucrats, who they say they do not trust, whenever the bureaucrats say soothing things. They do not want to take responsibility for their investment decisions. They want government guarantees. They want bailouts for themselves, but these bailouts are supposed to be paid for by other voters.

Everyone wants to believe that the fractional reserve banking system is not at risk, and whatever risks there are – very, very low – should be borne by other voters.

So, the crisis will continue. So will the reassurances from officials that it is all over. “There is nothing to see here. Move along.”

Continue Reading on www.irishtimes.com

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