VANCOUVER, Canada (Bullions Bull Canada) -- There are many things that need to be said about the deliberately provocative move by European bankers to engage in a sovereign version of an "MF-Global" style bank heist.Unfortunately, none of these things are being said by anyone in the mainstream media. To start with, this "plan" was intended to fail. It was simply another staged event. In this case, the goal was first to isolate Cyprus politically and economically, and then "make an example" out of it to other Western governments and their populace. Regular readers will recall a previous commentary about how Iceland successfully stood up to the banksters, threw them out of their nation and has since prospered economically. Since that time I have iterated the mantra of the Financial Oligarchs on many occasions: "No more Icelands." Thus, first these oligarchs engage in a blatant act of theft that was intentionally intended to be as punitive as possible to the masses. This would ensure maximum outrage within the Cyprus population, and thus make it political suicide for any politician to support the measure. Reportedly, France's Pierre Moscovici said he had wanted an exemption for accounts worth less than 100,000 euros, or $129,500, but Austria's Maria Fekter said demands by the European Central Bank made that impossible. The ECB reportedly wanted to lowball the tax on larger depositors, magnifying the hit on the smaller ones. This is nothing less than a written confession. Individual European governments were pushing for the bank robbery to at least be structured fairly -- stealing the most from those who could most afford it. It was the ECB that vetoed those intentions, and insisted on "magnifying the hit" on ordinary people. The final vote taken by the Cyprus government is ultimate, empirical proof of this staged event. Every member of the opposition parties voted against the bank robbery; every member of the government abstained. Obviously a proposal that fails to obtain the support of a single member of government was never a serious proposal to begin with.
Now Cyprus will likely be driven out of the EU and then the jackals of the Western banking oligopoly will go to work. Forced to use its own currency, that currency will be manipulated to near zero. Indeed, with more than a decade of "competitive devaluation" under their belts, there is nothing that these banksters are better at than destroying the value of a currency. Along with that will be more of the same fraudulent manipulation of interest rates on Cypriot debt (via the same credit-default swap fraud that Wall Street has used so successfully on the rest of Europe). With the capacity to drive those interest rates to any number they desire they can totally freeze Cyprus out of international debt markets. With a virtually worthless currency and no access to credit to help restructure its economy, the economic devastation of Cyprus will even dwarf what these same banksters had previously inflicted upon Greece. However, this is only one half of what is truly significant about this episode. The other notable point here is this attempted bank robbery was acknowledged as an attempt at some form of "emergency taxation." In this respect, it is yet more of the same heinously unfair taxation policy which has been characteristic of Western economies for the past several decades. It targets not all Cypriots, but rather a specific demographic: those who tend to have relatively large percentages of their wealth in the form of ordinary bank deposits. This would include primarily middle-class families and wealthy widows. Obviously, poorer individuals have little if any savings while the Very Wealthy (who can most afford to pay and who have most benefited from the current system) tend to have only a tiny percentage of their wealth sitting in (domestic) bank accounts. Yet another "free ride" for the richest of the rich. If our corrupt governments are now trying to tell us they belatedly plan to genuinely (try to) "finance" our massive, fraudulent debts -- by confiscating our wealth -- then at the least such confiscation must be done in a fair manner (i.e. no more free rides for the billionaires). Regular readers should know from past commentaries that as a matter of simple arithmetic that wealth taxation is the only possible form of fair taxation in any economy. Nothing is hidden from the tax man. No more "free rides" for the billionaires.
In the case of Cyprus, understand that this is a manufactured "emergency." Cyprus didn't suddenly become "insolvent" in March 2013 and this phony bailout (i.e. lending more money to an insolvent economy) won't solve anything -- it's just another temporary band-aid to delay inevitable debt-default. Note that along with being the only possible fair form of taxation that wealth taxation is also the only efficient form of taxation. Since nothing can be hidden from a wealth tax it replaces all other taxes. No more income tax. No more sales tax. No more corporate tax. No more capital gains tax. In other words, we would have capitalist/consumer economies that (for the first time in history) would not be harshly penalizing income, profit, and consumption. What a radical concept! Why do we not already have wealth-taxation across all of our economies? The reason is obvious: It's because it's the only form of taxation that does not provide the billionaires with their accustomed free ride. This reflects the persistent belief among these billionaires themselves that the only thing thath has allowed them to acquire (and maintain) such unimaginably huge hoards of wealth in the first place is a taxation system which provides a free pass to the richest-of-the-rich. A flat wealth tax is the only way to tax our economies fairly and efficiently. It is a form of immediate economic "stimulus" which doesn't cost a penny. There can be no possible objection to such positive tax reform. Note that a wealth tax would also encourage these billionaires to actually use their vast hoards of wealth. Use it or lose it. If the billionaires had their "free ride" taken away from them -- and their antiques, yachts and other valuable trinkets accumulated exposed to taxation -- then they would suddenly have a direct monetary incentive to invest that capital productively so that it produced (untaxed) income. More free stimulus. Among the many reasons our economies are all on the brink of outright bankruptcy is that we have the largest percentage of capital sitting in these idle hoards of wealth. Our "bloodless" economies are about to die from anemia. Tax the billionaires and go easy on the bank accounts of the widows. Follow @bullionbulls This article was written by an independent contributor, separate from TheStreet's regular news coverage.