The Cyprus Deception they call a Bailout or How ordinary people are getting shafted by bankers yet again!

G. Edward Griffin, author of “The Creature from Jekyll Island: A Second Look at the Federal Reserve” oftentimes begins his talks on the nature of the Federal Reserve System with a historical reference to the 1st Century philosopher Epictatus from the tiny kingdom of Frigia. Epictatus said that appearances are of 4 kinds.

That is, things are as they appear to be, or they neither are nor appear to be, or they are but do not appear to be, or they are not yet appear to be. Confused yet? Well, don’t be.

All Epictatus was saying, with too many words as most philosophers are wont to do, is that appearances can be deceiving. Well…..the bailout of Cyprus is one of those appearances of the 4th kind – it is not yet appears to be. Plain and simple, it is a deception.

How can that be, you may ask. You may have looked at the provisions of the bail out arrangements and agreed with Jeroen Dijsselbloem- Chair of the Eurozone’s finance ministers statement that this arrangement will, “concentrate the losses where the problems are, in the large banks.” Won’t it?

Withdrawals were limited to 100 Euros or $130. Banks are now closed until Thursday. Your money?

Withdrawals were limited to 100 Euros or $130. Banks are closed now until Thursday. Whose money?

After all, the 2nd largest bank in Cyprus, Laiki, is being “restructured” (Translated as eliminated along with most of its 5,000 workers. With unemployment in Cyprus at 15% already this loss could push the unemployment level up to 26% if there is a potential GDP decline to a nadir of 23% according to Hugo Dixon writing for Reuters.).

And the wealthiest investors are being hit with the losses, not the little people with accounts under 100,000 Euros, losing as much as 40% of their investments. However, as noted above, the offshore banking center, a huge source of income and employment is being destroyed and so will the economy upon which Cyprus was based.

BTW, whose labor earned the money in the first place? Certainly not the banks. So if they are protecting the depositor, especially the little person, why are the depositors being limited in withdrawals? Why the banking “holiday”? Whose interests are being protected here, the people’s? Not!

So, what about the bankers? The real power brokers in all of this. What about their losses?

Well, here’s where that appearance of the 4th kind of Epictatus comes into view. You see the bankers losses are not, yet appear to be.

After all, the Laiki bank is being eliminated. But how?

Well, they are splitting into two banks– a good one and a bad one.

The good bank or profitable parts of Laiki are being spun off and folded into the largest Cypriot bank, the Bank of Cyprus. OK, that shores up the Bank of Cyprus.

The 4.2 Billion of uninsured deposits or bad investments will be kept with the “bad” bank portion of Laiki and converted into equity. In other words, the uninsured creditors could lose most of their money. This is where the investors losses come in.

Now, this may appear to be a good thing because those bad investors are going to be punished for their sins. However, the banking system gets to keep the good part and cuts afloat the bad part! The stockholders and investors in the bank lose and the banking system wins.

Now, here is the really deceptive part of all of this. The deal is that the Cypriot banking system will be bailed out (NOT Cyprus mind you but the banking system– an important distinction to keep in mind) with $10 Billion Euros ($13 Billion). They will have to match that amount with 5.8 Euros ($7.5 Billion) of their own. Where will that money come from?

Well, the majority of it will be raised by seizing the assets of large deposit holders. You know, the people who gave the banks the money to run themselves and profit from money made from nothing. (Watch G. Edward Griffin video at the end for more on that.). The remainder of the money will come from tax increases (to the people) and privatizations (the people again through the sale of public assets).

In other words, the collateral will come in one form or another from people, not the banking industry. Either through direct seizure (legalized theft), taxes (legalized theft) or privatization (selling publicly funded businesses, enterprises or agencies to private concerns in other words – think this through- the people, once again.)

The banking industry’s penalty in all of this? Well, do the math! Nada. All the losses are transferred to the people including the losses of jobs and the primary means of earning income on the Island of Cyprus. The people will have to completely retool! It is after all, ALL their fault isn’t it?

Now, here comes the part that really sticks in my craw and is the most deceptive move of all. Earlier today when the agreement was reached between Cyprus and the so-called troika of creditors (Or the EU, ECB and the IMF) Christine Lagarde, President of the International Monetary Fund (IMF) said:

“I expect to be in a position to make a recommendation to the IMF executive board in the coming weeks. And that recommendation will aim at including the financial participation of the IMF.”

Translated from implication into reality this means that it is likely that the Cyprus bail out will fall into the lap of the citizens of this nation or the United States.

How can that be you may ask? Well, even though the IMF (which is a creation of the U.S.) is broken up into percentages and member nations, what is the denomination of the money supplied by the IMF?

Well, it is dollars! Or more specifically- Federal Reserve Note (FRN) dollars.

Well, now…….who generates Federal Reserve Notes? Uh, that would be the Federal Reserve wouldn’t it?

And who is responsible for the debt that the Federal Reserve generates? That would be those using Federal Reserve Notes. Hey! Isn’t that the money American citizens use to purchase goods, save and invest with?

You see, the more money the Fed generates, the less value the FRN’s have. It is called inflation.

As inflation grows, the purchasing power of the dollars you earn declines. The money you work for or even worse save, buys less and less. In truth and fact, you are being taxed without even knowing it.

So aside from the percentage we pay into the IMF, our FRN’s are being diluted like water being poured into soup. Our savings and earnings are worth less and less, faster and faster as more FRN’s are generated and put into circulation without a subsequent rise in the production of real wealth.

One way or another, we eat the Cypriot losses or don’t eat them as the case may be since you may have to tighten your belt to make ends meet with your declining purchasing power.

Oh and those poor bankers?

Hey all taken care of! Don’t you dare fret a moment to worry about them.

The international central banking cartel has ridden to their rescue once again and transferred those pesky losses to the people! (You know as in the $700 Billion plus bailout here in the good ole land of the free and home of the brave.)

Hi Yo IMF!!!!!

For a very excellent and easily understood overview of the Federal Reserve workings, please watch the free 1993 video from G. Edward Griffin below on YouTube:

For an excellent and recently updated book on the Federal Reserve check out G. Edward Griffin’s book:


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