In Case you Missed Bernanke's response to this question today:
Journalist: I was wondering if you can tell me how if a run on the banks happens in Cyprus, how that might affect U.S. markets. And also is it possible for the U.S. to levy a tax on regular deposits here? Or why not?
Bernanke: As someone mentioned Cyprus is a tiny economy. I don’t think these issues as worrisome as they are and as concerned as we would be for the Cyprus people, I don’t think that they have a direct implications for the U.S. economy.
The only way that they would create a problem would be if the runs became contagious in some sense, if depositors in other countries lost confidence. But to this point I’m not aware of any evidence that that is in fact the case.
The argument the Europeans are making is that Cyprus is a unique situation, very different situation, and indeed, it is quite unusual to have a banking sector as large as they have relative to their economy.
In terms of the United States, the FDIC was founded in 1934, and we have insured deposits and they are very proud of the fact that no one has ever lost a dime in insured deposits.
And during the crisis the response of the government was in fact to increase the level of deposit or account sizes that were insured. So I consider that to be extremely unlikely in the United States.
My Observation:
I was aghast that Bernanke did not make a definitive statement against the ECB and IMF theft. Not surprised especially, but amazed that he did not say something more equivocating. He condoned it, he knows it is an ace up his sleeve (should he need it) and believes that deferring the question with euphemisms will keep the U.S. and Europe cash in deposits intact. An incredible failure due to hubris.
His condoning and equivocation is an UNMISTAKABLE SIGNAL THAT HE VIEWS THIS THEFT AS AN ACCEPTABLE POLICY TOOL.
Period.
Trust me, if anyone in the world pays extra special attention to every syllable that exits his mouth, and what it means or could be interpreted as meaning, It's Bernanke.
Just wait, until it hits the fan.
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You know something bad is going to happen when you hear..."Hey, hold my beer and watch this"