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Guess who gets screwed by the Cyprus bail-in?

I'm sure you guessed! Felix Salmon:

The big loser are working-class Cypriots, whose elected government has proved powerless in the face of decisions driven by Germany, and who are now edging towards fury. The Eurozone has always had a democratic deficit: monetary union was imposed by the elite on unthankful and unwilling citizens. Now the citizens are revolting: just look at Beppe Grillo. Across the continent, they’ve lost their democratic right to determine their own fate at the ballot box, and instead they’re being instructed what to do by Germans. Now, in Cyprus, they’re simply and directly losing their money.

Someone with €8,000 of life savings in the bank can ill afford to lose an arbitrary €540, but that’s exactly what is going to happen.

Edmund Conway:

Consider it: overnight a widow’s life savings, carefully saved up over decades, have been gouged, simply because EU bureaucrats decided to protect hedge funds and the German surplus, and to teach Russians a lesson.

Pravda:

For the past six months, the global financial markets have become increasingly complacent, convinced that the euro-zone crisis is, for practical purposes, over. Cyprus is the test of whether that is correct, or whether the complacency was instead misplaced.

In other words, if there is going to be a new wave of crisis in Europe, historians will be able to trace its starting point back to today’s Cyprus bank bailout.

Rather a horrible choice, if you ask the question "What are you going to do about it?" A European bank-run or worldwide expansion of the tactic. It would be foolish to think nobody would follow this example, after all. FWIW, my take is that it's the banksters testing how much they can get away with. (Salmon has a far more informed view, of course.)

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Submitted by jawbone on

the reactions both internationally and within the EU will prevent him from being quite so stupid.

However, he is desperate to enact his Great Big Bad Bad Bargain…and stick it to the non-One Percenters..

Of course, given that his plan for the Chained CPI will affect people for years, more likely decades, into the future, his money grab, both from seniors' lower SocSec increases and workers' higher taxes due to fewer cost of living adjustments in tax brackets, may actually cause, in the actual impact, US taxpayers and SocSec recipients to lose more overall?

In the end, it's all the same: Lemon socialism. Privatize the profits and socialize the losses of the greedy Big Money players.

Check out the tax increase due to hit US workers due to the CPI effect on tax brackets in this WaPo article.

Ah, that Barry, always looking out for the lower economic quintiles…NOT.

Might want to call your Congress Critters. Hits to seniors might not get their attention, but higher taxes due to that actions of the (ostensible) Dem president just might.

If Obama succeeds in this plan, raising taxes on the middle and lower middle classes will certainly be the basis for many ads against Dems in 2014. (Which also may be an Obama objective.)