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Can we trust the banks with our money? Fifty years ago, anyone raising such a question was considered a paranoid lunatic. One hundred years ago, the question had some legitimacy behind it, as lots of folks did not yet trust banks. Many people who lived through the great depression in the 1930’s in the U.S. understandably became mattress stuffers, having seen bank failures actually happen. Here we are in the year 2013, living in the digital money age where cash is a rapidly vanishing entity, and we once again must wonder about our money being safe in the bank. It appears we have come full circle.
The situation in Cyprus seems far enough removed to not cause many Americans to have sleepless nights. Of course, it really isn’t as far removed as it seems. Repercussions in Italy and Greece are likely. From there, who knows what could happen. We all know this, but we don’t let it upset us too much. In this day and age, we are just thankful our own highly questionable financial system is still somehow holding together. Better there than here.
Can’t you just picture Jimmy Stewart behind the counter of the Cyprus banks telling the people, “You’re thinking about this place all wrong! Your money isn’t here, it’s in Dimitris’ house and Christos’ house and Giorgos’ house!” Only, that’s not the way it works in modern banks. These days, home mortgages are sold to specific mortgage holding companies who service them. Your deposited money should be in the bank.
…just not in cash. Banks don’t have that much cash on hand. It’s not in gold, either. The money is all just digits in a computer database. You can get some cash, of course, but it’s best if you just keep using your cards and adjusting the balance of those numbers. Hey, you can always close your account and transfer it all to another bank and look at those same numbers on different letterhead - assuming, of course, you even bother to receive paper statements anymore.
So, when the mobs hoard the Cyprus banks upon their reopening, nobody can get more than 300 bucks per day. They cannot transfer more than five grand out of the country. They can, however, close their accounts and transfer it all to a different bank within the country of Cyprus - which will seem like an exercise in futility. All of this is to prevent a run on the banks. A bank run is a mob mentality that has the very real potential for igniting an unnecessary financial crisis.
Here is my take on the entire situation:
As usual, the problem does not lie in the mechanics of how things are operating, but in the reaction of the human mind. Our resistance to change and tendency to overreact to negative-seeming developments is what causes most of our problems. The Cyprus banks came up with a very reasonable solution to thwart off a massive financial crisis. They were going to take 10% of all deposited funds in the banks. Everybody kicks in 10% of whatever they have. Problem solved, and everyone gets to keep living their wonderful little life on a Mediterranean island. (This is especially reasonable considering that your 10% would be paid for in less than three years at the 5% interest rate Cyprus banks currently pay depositors. You are still better off there, after paying the bailout assessment, than you are having your money is USA banks.)
But noooooooooooo. They had to go get all up in arms about it. Now the banks are being forced to do something different, something much more conspicuous. They will be shamefully robbing the wealthy and upper-middle class instead. Instead of everyone paying their fair share, large depositors will now lose up to 40% of their balances to pay for the bailout. This is a much worse solution for many reasons, but the main one is the large depositors will be pulling all the rest of their funds out of that country just as soon as they are able. Count on it. This sets up a condition which could very well result in real bank failures in the near future. The bulk of the wealth will be removed.
Folks, if the choice is to pay 10% of your money or risk complete financial ruin, the correct answer is to pay the 10% and go back to your happy life where the currency is still good and a loaf of bread doesn’t cost a wheelbarrow full of cash. Whining and complaining your way to making those richer than you pay for it, and driving them all out of your economy as a result, leaves you on an island of only poor and destitute whiners and complainers.
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It is just about the year 2009 and amazingly, many Americans are still harboring an anti-French attitude which was spawned in the early days of the current Iraq war (or whatever that has become). This is absolutely the stupidest thing I have witnessed in our society over the past decade. There is no doubt in my mind that those who have acquired this attitude, and have somehow managed to hang unto it, have not visited France in their lifetime. Most likely they are mindless drones who spend every spare moment watching television. Either that or they are hardcore right-wing politics addicts that have lost their ability to think clearly.
I remember back about five or six years ago when the topic was hot. It was France and Germany that were the targets of our collective irrational hate. They were the countries that would not directly support us (to a degree of our liking) in the Iraq war by sending troops. Those countries live a little close to that battlefield and decided to sit this one out.
Americans responded by refusing to order French fries at McDonalds and by boycotting German beer. (Stupid Americans that is. Papa Riah wouldn’t abandon German beer even if Hitler rose back to power, as I have my priorities straight.) They soon forgave Germany however - that one didn’t last long at all. But Americans held unto their French hatred for some inexplicable reason, many even to this day. For some reason stupid Americans just want to hate the French and will take any excuse to do so.
It doesn’t make sense. The war in Iraq is unpopular. The President associated with that war is unpopular. But bashing the French for not sending troops to that unpopular war led by that unpopular President is, somehow, popular.
Even for hardcore right-wingers this position is nothing more than pure unwarranted hatred. It isn’t much different from the Nazis hating the Jews (or the modern day Arabs hating the Jews, for that matter). There were plenty of other European countries who weren’t bullied into sending troops to Iraq. For example: Switzerland, Holland, and Denmark. Why aren’t they hated? What is it that makes the French such an easy target for bashing?
Perhaps many Americans forget that the French were our allies in the American Revolutionary war. If it wasn’t for their timely help we would not have won our independence in that war. The statue of liberty, the one universally recognized symbol of American freedom and national pride, was constructed by the French and given to us as a gift after our victory. My how soon we forget these things.
If you start talking about how you disrepect the French for being smart enough not to get involved in Iraq, be careful who you are talking to. That co-worker friend might actually turn out to be French. Then you will feel pretty stupid, won’t you? As you should.
Are you a generally happy person? Thankful for all your blessings and appreciative of the good things you get to experience in life? Or are you an often-angry person, mad that others have more than you and not happy about the way the world works? If it’s the latter, I have a question for you: Just who the heck do you think you are? Why is it you think you deserve anything? The truth is you are darn lucky to have what you have, and that you aren’t starving in some third-world country somewhere.
The attitude that others shouldn’t have more than you, that it’s just not fair, is usually held by those who are not willing to do the work that those who have more do in order to get it. Welfare recipients think their welfare checks should be high enough that they get to drive an SUV and vacation in Europe too, just like their neighbor the workaholic who started a successful business in his spare time. What they don’t seem to understand is that the neighbor who busts his butt to get slightly ahead in life is also busting his butt to pay for that welfare check of his lazy neighbor.
It doesn’t matter to them. They hold a different world view than rational thinking people. Joe the plumber might save enough to finally purchase the company he works for through decades of hard work and wise financial planning. But angry-lazy people who hate society, work as little as possible, blow every cent they make on immediate pleasures, and spend all their spare time watching TV think Joe the plumber owes them something. He’s doing fine. But the angry-lazy people think that his “wealth” should be shared with everyone who didn’t work hard and didn’t bother saving any money.
There is a term used to describe the society which the lazy angry people envision. It’s called socialism. In a socialist society nobody has anything more than anybody else. The government takes most, or even all of, the money you earn and provides for all your needs. There is nothing to be jealous of because everybody has it the same way. Of course, nobody works hard to get ahead because there is no reward for it. So everybody has a very poor standard of living.
You know what? That suits the socialists just fine. They don’t necessarily want nice things for themselves. They just don’t want anybody else to be able to get nice things for themselves either. They want to drag everyone down to their pathetic level.
This dangerous attitude usually starts at a young age. It begins with - you guessed it - bad parenting. Not being able to say no to your child and refusing to discipline them raises them in a frame of mind which makes them think they were born kings or something, and that the world should be rushing to meet their every whim. This carries over into adulthood and causes problems.
If your child throws temper tantrums when they don’t get their way and you allow this, you are dangerously spoiling your kids. Spoiled kids grow up with issues of entitlement . They don’t understand how fortunate they are just to be healthy and living in a wealthy society. They think they deserve it all. What a misconception that is.
I have news for you: You aren’t entitled to anything by virtue of your existence. Nobody is. You might go to prison tomorrow, or come down with a terminal disease. Everything you have might be gone in an instant. There is no security in this life. If you are angry about other people having it better than you, then you need to seriously get over it. If you want more than you have put your nose to the grindstone and do something about it.
The recent election has resulted in our government being dominated by a political party who holds socialist views. That is an obvious fact, even to somebody like me who isn’t into politics. You can expect a flurry of socialist policies to materialize in the coming years. Those who work hard to get ahead will have an ever-growing percentage of the fruits of their labor confiscated and given to angry-lazy people who think they shouldn’t have to work hard to get the same rewards.
Now don’t get me wrong. Papa Riah is not a defender our current society. In fact I find much of it quite stupid, thus the existence of this blog. However socialism is clearly moving backwards. It’s been tried before and has always failed miserably. It results in violent revolutions and therefore must be instilled by military force upon the residents of it’s own country. But when people with issues of entitlement get control of world governments, as is apparently happening before our eyes, that nightmare becomes a very real threat.
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