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Friday, March 29, 2013

Norway: A rare example of a Successful economy

As we end another week here at A&G, we thought we'd shift our attentions from nations who are economic failures and frack-ups (Yes, the word 'frack' is intentional... our swear jar is already filled to capacity after the whole Cyprus fiasco)

So we turn our eyes to northern Europe; a a very beautiful country that admittedly we fell in love with during the 1992 Winter Olympics in Lilyhammer...   Norway.

Norway is the envy of the world: growth is strong, per capita GDP has exceeded $100,000 and the nation sits on a $700 billion rainy day cash reserve, or $140,000 per man, woman and child.

This is due to a combination of Middle East-style oil wealth combined with a generous Nordic welfare model.
What is more interesting than finding a success story amid the the economic rot and sewage which is Europe thanks to the continued existence of the Eurozone, is how others want to portray all Norway's successes as negatives or impediments.

We found a Reuters article last Sunday on this topic entitled, "Sitting on too much money, Norway risks going off course".  Just reading that title made us shake our heads in irritation..

Here's some 'nuggets' from the silly Reuters article..

"It may just be too much money as Norwegians, more keen on leisure and family life are working less and less.  Immigration is not filling the gap in the skilled part of the workforce, so productivity is stagnating, wages are surging and firms are pricing themselves out of their own market."
Isn't that terrible!  Norwegians have more time to spend with their families where its well documented that children are more likely to be raised properly and live healthy, normal lives from a stable two-parent home...

Just awful... Don't they know it would be so much better if they made dramatically less salary, worked longer hours and paid less taxes so there'd be far fewer social services.

And those poor firms!!  Those poor corporations..  Making them pay good wages and 28% corporate tax rate...  Its just so mean!

Why can't these people be miserable, personality-less entertainment-addicted zombies like us, dag-nabbit?!


"Wage costs are up 63 percent since 2000, about six times more than in Germany or Sweden... Unemployment is a barely visible 3 percent as more prefer part time work...

The government recently warned that unless working hours are increased by 10 percent over time, the state will eventually start eating into its savings. The central bank also warned that the welfare model is simply encouraging people to leave the labor market."

Ahh... here's the real Alice In Wonderland 'black is white' Kicker...  Everything that is supposedly to be Good about a nation--  Everything that a nation is supposed to strive for-- extremely low unemployment, good wages, free time to pursue other interests or family bonding, minimal to no poverty, low crime,etc...

Its all treated as 'Bad'.
Banks can't profit off people when times are good.  You want to buy a car or a home.. maybe you take out a loan for 50% the total... or 25%... or pay free and clear... And how can any bank gouge you for 5-30 years then??

How can there be debt slaves when people aren't getting into debt??

And what's the #1 cause for adults over 30 years old getting into severe debt-- enough to end up going bankrupt??   Medical bills.

And how can you make the Nordic people suffer financially if their welfare system takes care of everyone?  Or complain about the drain on the costs to the national economy when so much income is being generated that no one's complaining over the taxes?

See what we mean... gotta follow the dots..
Norway has a budget surplus of 12% of GDP. We in the US as well as most nations in the world are running deficits...  Which is better?   Correct..

In the US as well as most nations, the people serve four purposes-- Work, pay taxes, consume and obey the law...  If they aren't working, you the government can't tax them to death and profit off each person living and breathing...

Few governments will say this openly but its in no one's interest to have a society where productive work is accomplished in 80% the time, leaving endless leisure time for citizens to pursue their dreams or worse have time to actually follow political news.

Governments get away with murder simply because a vast percentage are soooo exhausted mentally and physically from work, they want to watch silly, light fluff on TV to relax them rather than watch or read news.... Just too tiring...
The reason its important to know how government values you is simple-- so that you and we, and everyone in between learn to look at ourselves as Individuals and not accept the Collectivist mindset that the decisions of a few or one affecting us all, is a good thing.

Norway is the economy the world should be tirelessly striving to be like..Instead, with a 'Billy Budd'-like envy (Herman Melville short story about everyone jealous of a genuinely good looking man), the goal is to create warts where none exist..

If/when there's another global crash, it will be nations like Norway and Canada who ride out the storm pretty well in comparison to others...

Thursday, March 28, 2013

Cyprus Q&A; Answers 25 wds or less

Its another day in the black lagoon which is global finance..

We were told by a few that yesterday's post was extremely long to read... 


Sometimes we forget this is 2013 and attention spans tend to be rather short in comparison to days gone by..

For instance, the famous Lincoln-Douglas debates of 1858 went on for Hours...  Hour upon Hour of verbal grandiosity and the people who sat and listened, did so with total eagerness and enthrallment--

To people of the mid 19th century, listening to two orators bloviate was entertainment...

Now we live in a soundbite age..
So we'll see if we can be accommodating in today's post.  We're going to try to summarize the whole Cyprus situation up to the present through a Q&A with each answer no more than 25 words... Some responses, we may only use 1 or 2 words...

Let's begin..

Q:  The Cyprus banks are finally open after 13 days including weekends... All is well right?

A:  Um, no...

Q:  How so?
A:  The banks in Cyprus are nothing more than humanized ATMs-- 300 euro limit withdraw per person per day..

Q:  That's not good.. but if that's the worst, well not bad considering, right?

A: People leaving Cyprus are not allowed to take more than 3000 euros with them... The rest will be confiscated...

Q: Oh.. well just those two things, right?

A: In addition, a ban on cashing of checks and barring businesses from transferring money abroad unless showing it is for imports.
Q:  So what is the currency rate between euros to US dollars?

A: One euro = $1.28.  300 euros = $384  

Q: That's really not much is it to withdraw... quite a pittance, yes?

A:  Yes but people get what they deserve.

Q: What do you mean?

A: Twelve days of Cyprus banks closed and people protesting peaceably with signs and singing; they don't get it..
Q:  Get what?

A:  They have no future.. no nation.. no hope.. Poof.  Their one economic lifeblood-- offshore banking now killed.  No revenue stream to pay back loans.

Q:  Well Cyprus knew what they were doing right?

A:  No.  Parliamentary vote on deal was skipped; Nation utterly naive about need to stay in eurozone.

Q: Well Cyprus was/is in a real economic bind.. what would you have done differently Smarty?

A:  Would have negotiated with Germany: 'FULL 100% bailout loan or we leave EU instantly'; No bluff.. Comply or Die
Q:  Well how much power do you really think you would have had?  Cyprus is a tiny-tiny nation with population less than a million...

A:  If Cyprus was so unimportant the troika would have offered Zero. But they are.. Once a dam breaks...

Q:  Anything else on Cyprus real quick?

A:  Deposits of more than 100,000 euros will be frozen i.e. No access.

Q: Two brief questions as we close this Q&A.. The first is why does it seem people keep taking 'It' from their governments such as going on in Cyprus?

A:  Complacency, disbelief, fear of standing out, fear of losing stuff, blind trust in System, etc.  Very little different than Jews of early 1930s Nazi Germany...
Q: You Must explain..

A:  Jews had rights slowly stripped; assets seized.. capital controls placed.  When they tried escaping, they were searched- cash confiscated.. like in Cyprus.

Q:  Last question for now...  Can any of this happen in the US?

A: Absolutely.  Going to feel even worse when it happens because we're kept in dark.. We WANT to be kept in dark.

Q:  That's not true..

A:  If Cyprus-like money controls happened here, we'd freeze up.  Plenty of opportunity to withdraw cash presently; to prepare-- so few do...  One big joke.

Q:  Good point..

A:  Can't prepare for the unexpected After it occurs folks...

Monday, March 25, 2013

Cyprus- How the Evil won and Lessons to learn

Well, we wake up this snowy Monday where we're located and see Cyprus' leaders sold its soul to the banking troika...   Not the first to capitulate and not the last...

Seems the only world leader with any real conviction is located in North Korea...  

Take of that sentence what you will...   

But trust us, if Kim Jong-Il was sitting at that table across from that most vile, detestable group of European finance scoundrels and jackals (backed by the US money) waiting to pounce, he would have probably told them: 

"어머니는 창녀 고 모든 지옥에 갈 수 있습니다."

This we would be translated as:

'Your mothers are whores and you all can go to hell'
Really-- its Disgusting that the only leader in the entire world with any guts to put bankers in their place happens to be him!   Him!

We can't see any other leader telling the banks and the professional Investors/vulture capitalists, and other Dogs to go fuck themselves and shove their harsh terms up their rectums...

Can you?

So what happened last night?  

Oh nothing much-- just an agreement to raid the accounts of depositors holding more than 100k euros to the tune of at least 25% and cap of no more than 40% losses, while sneakily avoiding Parliamentary approval after because cleverly its not called a 'tax'.
So.. let's say Person A had 250,000 euros in a Cyprus bank today and couldn't get any out due to the 10 day bank holiday preventing wire transfers or physical acquisition of cash...

How much will he/she have once this levy takes place?

If its a 25% levy, he/she will now have 212,500 euros, a theft of 37,500

If its a 40% levy, he/she will now have 190k euros, a theft of 60k

** Remember, the first 100k euros are still to be insured so the thievery will occur on the non-insured portion...
Another example: let's say Person B has 500k euros in Cyprus banks...

If its a 25% levy, he/she will now have 400k euros, a theft of 100k

If its a 40% levy, he/she will now have 340,000 euros, a theft of 160k

~ Oh they're wealthy... Oh they deserve it..  Oh its only mostly Russians who got hurt-- who cares...

Total rationalization...and utter ignorance to justify blatant theft of personal property; the first time in human history this has ever taken place-- siphoning money from individual depositors to pay for government incompetence...
So what lessons can we learn:

1)  Governments and banks may have been repulsed when seeking to raid ALL depositors of banks, but now precedent has been set and moral hazard gone.... 

If you have more $$ in the bank than what is insured (100k euros in Eurozone, 50k pounds in Great Britain and $250k FDIC in the US), you're opening yourself to being a victim if/when there's an emergency which requires a shutdown and bank holiday...  

2)  Governments do what they want... If they think they have the votes, they'll go through Parliamentary or Congressional vote.. If not, they'll bypass it..  If its a Constitutional question, it will be side-stepped or the 'argument' cleverly re-worded so as not to apply...

3)  Banks and Investors own the world.   They truly do.  Just about every nation on earth is in serious debt and owing money to a global bank...  Currently only three nations do not owe a penny-- Cuba, Iran and North Korea... Ironic, isn't it...

Prior to a year or so ago, there was a fourth nation to the list-- Libya.. But then the US sent warplanes in under the guise of a multi-national effort, assassinated Qhadafi and the IMF was right there to immediately provide long term loans to the Libyan 'freedom fighters' for their new government..

See how it works?
So what's done is done.. the Asshole Ass-umptionists.. the Ass-umers that cackle that all will be well and everything happily resolved to the benefit of the global markets, will be correct again..

Nice winning streak they're riding..

We look forward with glee to seeing their faces when events and situations arise where they are on the losing side..

So.. Cyprus... you didn't have the Guts to leave the Euro.. now we leave your little nothing nation-island behind to mire in the rot of economic depression and misery your leaders brought upon you...

And tomorrow will be a new day in the evil world of finance and markets..

Friday, March 22, 2013

NCAA Tourney or Cyprus-- what to focus on??

Today's post is going to be a bit 'tough love' so fair warning on that..

So its Friday and boy we at A&G are in a real pickle..  We just don't know what to do..

See by nature, we can see the people out there in America-- coast to coast and heartland in-between.. a vast collection of entertainment-obsessed zombies currently transfixed solely on the NCAA basketball tourney with everything else distant second..

And yet we want to shake them and scream 'Cyprus'!!

But we've been burnt before..
No way do we consciously seek to be part of the 'Peter and the Wolf' game... one continual media cocktease that country X is going to collapse and trigger something bad if 'Y' deadline passes.. and Then..  And Then..

Everything gets magically settled.. or deadlines given the respect of children in an argument among adults i.e.  totally ignored...

Quite frustrating.

See we want to tell you Cyprus and the EU situation is getting Worse not better as of Friday, noon est time; that ATM limits there have been cut from withdrawls of 700 euros/day to 260/day... That the people are hitting the streets on droves and getting worse by the day..
That Cyprus is right now not at plan B or C, but trying to figure out a Plan E because:

Plan A was haircuts to depositors (Cyprus Parliament voted it down once idea became public)

Plan B was to beg Russia for money (on hands and knees and with pink lipstick if necessary) by privatizing whatever little resources of value Cyprus possessed, but Putin had absolutely no interest as of this writing

Plan C was a solidarity fund which is a professional way of saying take money from public pension and social security funds, among other options.

Plan D is restructuring and a Larger bank-deposit levy on accounts of 100k euros or more.. instead of 9% tax, it would be 12.2%-- Germany loves this plan because it really sticks it to the Russians who many wealthy have their money in Cyprus banks, and you know historically that whole Germany-Russia thing...
But we say ultimately there will need to be a plan E because if seizing the personal property of others was so repugnant a few days ago, how is it so attractive now?  If this happened and Then banks reopened, you'd see Mediterranean 'Spring'

Then again, Germany who is the real Master or 'Mistress' of this thumbscrew tightening enterprise will not accept anything less than depositors getting screwed... In a way, we don't know why Germany doesn't simply make the demand instead of this faux-show where Cyprus decides their fate...

Oh, wait.. ok we do..  Germany & Merkel get a bad enough public rap as it is... See what happens when you bail out nations instead of letting them collapse...they just want to bite your paw...
And of course the Cyprus banks are close to collapse which could trigger collapses and bank runs in other nations early next week...

We want to warn people to be cognizant of the situation, but its so hard when those who always assume everything will turn out OK in the end turn out correct, because the powers of economic manipulation are That strong, and the clueless populace roots it on...

So the market goes up instead.. just as an utterly manipulated market is supposed to..  And they go Yay! when Bernanke announces no change to infinite QE4 & 5 dumping $85billion a month into the stock market (That's $118 million dollars per hour-- yes, Hour!)

And they all go double-Yay! when he says no changes to the super-low interest rates to go on forever

And everyone just assumes the US is completely unaffected and we'd never have a bank holiday again, much less money stolen from our private accounts.. no no.. we have due process and well, we're Americans dammit...
Bernanke was asked yesterday by someone in the media whether a Cyprus-style grab of bank deposits is possible in the U.S. :

The specific question was as follows: "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 answered the first part in a roundabout way... said that due to Cyprus' insignificant size and scope, he didn't see it affecting the Eurozone, much less the US.

More importantly, he never answered or remotely addressed the second part.  Would it have been so difficult for Bernanke to officially say 'We'd Never Ever consider taking from the accounts of depositors Ever no matter what the situation... Ever!!"

Instead-- silence and evasion.
But here's why Bernanke is so wrong about Cyprus....  Let's use us as an example:  Which state is more important--  Texas or Rhode Island?

We know your answer-- bigger is better

And yet which state has more US senators?  Oh...what do you know.. they all have the Same.  And which state would the US government be more accommodating to if it wanted to secede and leave the Union?

Trust us.. the answer is Neither... And why?  Combination of precedent and both states have equal 'seats' at the proverbial table.

Well same applies with Cyprus at the European Union..  tiny island nation but it holds the same amount of votes in policy decisions as France, Germany and Spain..  Its not the inconsequential island some want you to believe..

So in a way, we're hoping nothing gets resolved next week, it triggers a massive bank run and panic throughout Europe and scares the shit out of Americans.

Sincerely so..

Its not we're sadistic or evil or hate Europe...far from it...

We Hate complacency.. We hate everyone so willing to keep their heads in the sand like ostriches and assume all is well because that rigged stock market is expanding..  We hate the blind, stupid trust and faith everyone has in their political leaders; their President

Like lapdogs...woof..

What Should be happening in this country is Congress make all the decisions to fix this economy.  Of course they voted that power away to the Fed in a hush-hush vote in the evening hours of Dec 31, 2008 so the hot potato wouldn't affect re-election chances..

But we're saying that's the biggest problem.  People tend to hold their congressperson's feet to the fire on controversial votes that impact their constituents' lives and livelihoods.  And when their representative blatantly ignores them it generates passion and anger in due time..

But when all the decisions are in the hands of the Fed who really no one has the slightest clue what it does, much less who it really serves...

And it is run by a quiet, mild-mannered, unassuming man who nobody could identify  in a photo if there was a reward attached, its much easier to institute policy to Hurt the bottom 99%...  And as long as that market is going up, well..  things can't be 'that' bad can it?

Ya gotta wake up!!.. Gotta start waking and shaking your friends and family...  Gotta start sincerely spreading word of us and our site to others for them to be informed and make up their minds..

Entertainment is nice..  And blocking out the world-- well you'll make a psychiatrist most proud...  But you gotta get your head into the real 'game'..  Because your personal finances are not as safe as you think.. not in an emergency...

Wheww.. just finished..12:15p.. Time for Basketball tip-off!  Go Team!!

Kidding...   Happy Weekend~

Thursday, March 21, 2013

What would a 2013 US Bank Holiday look like?

OK, so today was supposed to be the day all was resolved in Cyprus, that little island country non of us cared about before and probably don't care about in the present..

Everything was supposed to magically work out to find a deal to keep their economy solvent and the banks were to re-open its doors...

Except none of that happened...

So now the EU has given this line-in-sand 'deadline' of Monday to come up with some way of financing the rest of the bailout that the EU only wishes to given in portion, and the lovely bank holiday, now in its 6th day counting last weekend, will continue for an additional 4 days.. until next Tuesday..

Now most Americans think this will never ever happen to us, so they aren't really caring about Cyprus or looking with detached interest, like watching the after-effects of a car accident off to the side of the road involving people one does not know...

But we explained yesterday in some detail, we had a bank holiday once back in 1933.  Officially on a national level, it lasted 9 days counting weekends but prior to FDR declaring it, 33 different state governors had made the declaration and closed banks a couple weeks prior to FDR.

And if/when a bank holiday occurs in the US, this is what it will mean:
1) The only money you can access is going to be via ATM.  You won't be able to withdraw money directly, have it wired to other accounts, cash checks, cash out CDs..

We do believe bills will continue to be paid electronically but since that option wasn't available in 1933, we're only making logical assumption.  However you wouldn't be able to make any non-electric deposit into your account if you're short funds and need to pay bills.

There's also a good chance the stock market may close to coincide with the holiday so no means of cashing out stocks.
2)  The Executive Banking Act of 1933 established the President as ipso facto leader during a bank holiday.  Only he may declare one and he has ultimate final say as to its duration and what needs to be done during an emergency.

That means as unthinkable and perhaps unconstitutional as it seems, if the market plunged a few thousands points in a day, people mad-dashing to withdraw funds and the only way to resuscitate the economy would be to take, lets say 5% from the accounts of every depositor, you better believe he'd do it!

This is not a partisan attack on the current President.  We're pointing out in a true emergency, the President has that power and would do it if he is advised and believed that was the best option to save the nation from destruction.

That means never assume all is always to be hunky dory.
3)  Even if private citizens' accounts are not directly touched with money siphoned, expect the currency to be devalued.  This was done in 1933.

Its a bit complicated to get into.. the formulas and such, but using 1933 as a guide, the dollar was devalued by 40%.  Back then the currency was pegged to gold which was why FDR demanded upon pain of arrest, all gold be turned in...  Now its backed by nothing.

So simple math:  40% of $1 = 40 cents.  What was once $10 has value of $6
4) If a bank holiday lasts more than a couple days and there's no clear time frame for banks to open, expect to have your credit cards rejected by merchants.

When you use them, especially those tied to your checking account, they provide funds to the merchants which they 'cash out' into their accounts.  No bank functionality means there's no transfer of funds and merchants do not normally wish to wait for repayment.  This is occurring in Cyprus

So literal physical cash will be King.
5)  As we mentioned yesterday, what calmed the nation back in 1933 into ultimately returning their money back into the banks was FDR giving a 100% guarantee on all deposits no matter how big or small; no limit...  Then using the 'fireside chats' to assure the people all would be well...

And as we explained, after one year of that, when enough people were calm about their money in banks, the FDIC was created and lowered the insurance coverage maximum from infinity (which was not realistic for the US to back, but people were more gullible and trusting of government then) down to $2,500.

Over time the FDIC limit has been raised with it currently at $250k per account.

There's a little over $10 Trillion in total US citizens deposits with a National debt over $16 Trillion and government running yearly deficits...  Do you think that same '100% of everything' guarantee could be offered today... and believed?
The ultimate point of all this is to get it through your noggins not to be complacent and assume it will never happen here because we're so great or infallible...

Everything is inter-connected.

For instance here are the financial sources demanding blood, um.. we mean $$ from Cyprus?

1) The International Monetary Fund (IMF) which the US created and controls with a 16.4% veto power making it have a larger say in decisions made than All other nations in the IMF combined.

That means 16.4% of its funding to dole out loans come from the US i.e. US taxpayers.  We put a 'dummy' (sometimes literally so) European as head of the bank to diffuse the appearance we run it.

Side note.. the US also runs the World Bank but we make no effort to mask that-- the head of the World Bank is Always an American, appointed by the US President
2)  European Central Bank (ECB)    There may be other players too but basically its the EU...and who has received about $1 Trillion in backdoor, backstop funding since 2009 to keep its monetary unit solvent?

Yes.. the Federal Reserve..   And how does the Fed get money?  Its created out of thin air with money printed to match the amount needed, which adds up to newly created debt which someone has to ultimately repay...

See how incestual it is?

So don't be in la-la land and think things in small or third world nations don't have any affect on the great powerful Oz.. um.. Uncle Sam...

Prepare yourself all contingencies... There's really no good reason to keep your savings in a bank-- what is not used on bills, or emergencies other than a naive trust that government will protect you in times of economic chaos...

Or you're just one lazy grasshopper...

Wednesday, March 20, 2013

Understanding the Bank Holiday of 1933

Not much is really talked about concerning the Bank Holiday which took place in the US back in March, 1933.  A few perhaps heard of it in the most general of ways but ultimately doesn't ring a bell..

We want to take a moment to explain why it occurred, why it was successful at the time and most importantly why if we ever come anywhere close to it again, we will not be saved, at least in the same way..

Prior to March, 1933 there had been a full month of continual and steady savings withdrawls from citizens who were very nervous about the future and solvency of the nation, especially with this brand new President, FDR just recently inaugurated.

This was entering year four of the Depression and people had simply no faith anymore that their money would be protected.   So the government had to put a stop to these continual runs..  
FDR instituted a week long national 'holiday', thereby closing the banks so no one could get access to their funds (actually 9 days when weekends taken into consideration) and re-opened only after Congress passed a hastily pushed piece of legislation known as the Emergency Banking Act of 1933 on March 9th.

So what did this do?

Among other things, if gave the President "the ability to declare a national emergency and have absolute control over the national finances and foreign exchange of the United States in the event of such an emergency." (Title 1, Section 2)

In addition, it authorized the Secretary of the Treasury "to order any individual or organization in the United States to deliver any gold that they possess or have custody of to the Treasury in return for "any other form of coin or currency coined or issued under the laws of the United States"." (Title 1, Section 3)

That's was the part about being forced to turn in your gold so it could be re-pegged i.e. devalued
But the success of the legislation and the reason why confidence was soon restored in banking was the Act created de facto 100 percent deposit insurance.

Prior, if a bank closed and you had money deposited, you lost everything...  Gone.  The FDIC which provides insurance on deposits did not come into existence until a year later.

Now after the Act, you could put all your cash back into the bank and 'trust' if that institution crumbled, you'd be reimbursed 100%

But you see in its success then, it can not be duplicated today...

What do we mean?
For one year to basically calm everyone, the government guaranteed the totality of all depositors' cash for a full 100%.  Then when FDIC went into effect, it provided 100% coverage of depositor's cash.... up to $2,500.   Anything above that and if there was another bank crash, well, you'd lose it...

By this point, people were a little more complacent and ultimately would keep their money in banks even if above that $2,500 demarcation.  And 80 years later, nothing has changed in the psychology of most Americans... they believe the FDIC will rescue them if the market crashed or banks collapsed.

But remember, the key in restoring public confidence back then was the government guaranteeing 100% of Everything.  As of Jan 2009, US banks held a total of just over $10 Trillion in deposits.

Could the President honestly say today in a 'fireside chat' that he could guarantee 100% of $10 Trillion to be covered when our National Debt is over $16 Trillion and every year we spend more than we take in, thus expanding the deficit as well?
As it is, the FDIC has enough in its war-chest to cover at most 5% of the total deposits in US banks if there was actual calamity that couldn't be contained through mainstream-news mouthpieces.

The insurance protection is mainly psychological..

If a couple hundred banks fail like between 2008-2011, the FDIC can come in, flex its muscle and demonstrate its in control...  But how about a couple thousand banks faltering?  

For instance, there are over 6,000 Bank of America branches-- its the largest bank in the US.   If it failed, the losses to be covered would be hundreds of billions if not trillions...

So the only thing keeping the game afoot is confidence...
How confident do you feel in your President (we don't mean Obama specifically).. How confident do you feel in the banks... the Fed..  the System...  How successfully have they earned your confidence?

Confidence... confidence game... con

So when something happens like in Cyprus this week, it should give shivers to everyone for never in history have everyday depositor's savings been open to instant tax seizure..

And what was the lesson learned?  Did the powerful banking interests and national big-wigs realize they were wrong and never to try such a fiendish coup?   No..  the lesson was you don't pass legislation making it legal for government to confiscate funds so soon before you actually are to do it!
Instead you simply pass such legislation on a Friday night at midnight... or right before a holiday when no one's paying attention...and you let it stay dormant.  Then when the government needs to, it simply implements it while coordinating a bank holiday, and the 1-2 punch will leave the populace staggered and confused.

Meanwhile you, the government got the 5-10% from each depositor that you needed to pay the banks or the Investors holding onto your government bonds.

That is the lesson..

There really is no reason to keep more of your $$ in banks than you need for monthly bills and emergency situations..  You'd earn just about as much interest hiding the cash in a box of Cocoa Puffs than a bank..