[belorn]

Money in the bank is not your money anymore. By the time of credit cards, banks moved from being a custodian of money, to a service provider that can cut anyone off from their service.

Sure, this time it was not the banks itself but rather the government that did this, but they could only do this because banks and government has stopped seeing money in the bank as belonging to the person who put it there. They would have never gone to a farmer and taken 10% of their grain. They would have never gone and taken physical property in peoples home. That would had been an complete impossibility. I even strongly doubt that any safety deposit boxes will be effect by this.

I understand the idea that this is a blow against companies that are using Cyprus as an tax haven. Its fully understandable. But I really dislike this current system of treating money in the bank as belonging to the bank. This story is just a clear example of this behavior expanding further.

[ahomescu1]

They would have never gone to a farmer and taken 10% of their grain.

Except this actually used to happen a lot in European countries in the Middle Ages. Farmers would still pay taxes to the king, and they'd have to pay in goods if not in gold.

[burntsushi]

> Except

Pretty sure the OP was talking about the present times...

[ameister14]

Have people changed significantly since then?

Plus, he was saying that prior to banks being how they are now, things were different. That prior period encompasses the middle ages.

[burntsushi]

> Have people changed significantly since then?

I don't know. Your question is sufficiently general that a plausible answer could be given to support either "yes" or "no" answers. It is very dependent on what you mean by "change". And therein lay my answer: I don't know what you mean by "change".

The poster in this case was touching on a point that going out and taking a farmer's property (or generally anyone for that matter) explicitly was very unlikely to happen, but taking it from a bank is considered something else entirely. I think that's fairly reasonable in the first world. Could a scenario arise in the future where that isn't reasonable? Sure. But, that's kind of beside the point here I think.

If you extend your reasoning to the extreme, you could pretty much say to anything, "Well, humans have done it before so what's stopping them from doing it again?" The answer is nothing, but it's a red herring: it ignores the possibility that the chance of some Event X has gone down with the passage of time. Perhaps it has gone down so much, that it is no longer reasonable to address it if one want to maintain a modicum of concision.

[ameister14]

Yeah, except you don't need to take the reasoning to the extreme. Physical property redistribution happens in countries all around the world all the time. Why do you think the founders of the US decided only property owners could vote?

I don't think of the government taking people's savings out of a bank and the government taking people's land as very different. It's a small and easy step to take from one to the other, and it's a step that has been taken many, many times before.

As to your last paragraph; it is foolish to assume social changes or governmental behaviors are more or less likely because of technological advances.

[burntsushi]

> Physical property redistribution happens in countries all around the world all the time.

We're not talking about the entire world.

> I don't think of the government taking people's savings out of a bank and the government taking people's land as very different.

Yes. I don't either, and neither does the top parent. That's the point.

> As to your last paragraph; it is foolish to assume social changes or governmental behaviors are more or less likely because of technological advances.

If you say so.

[belorn]

The middle ages had merchant banks, which is quite a step away from the bank that ordinary citizens use to place their earned wages.

Instead, the 17th and 18th centuries are a good milestone in the the history of banking where its function is similar to the one we expect today. (https://en.wikipedia.org/wiki/History_of_banking)

[InclinedPlane]

In present times without mandatory taxation. Right, where is this then?

[burntsushi]

In my interpretation, taxation parallels "banks" in the comparison drawn by the top parent. From the parent,

> but they could only do this because banks and government has stopped seeing money in the bank as belonging to the person who put it there. They would have never gone to a farmer and taken 10% of their grain. They would have never gone and taken physical property in peoples home.

Now instead of "stopped seeing money in the bank as belonging to the person who put it there," simply think of "stopped seeing labor/goods/(taxable things) as belonging to the person who performed/has it/them."

IMO, the top parent was a commentary on cognitive dissonance. It's implied that the parent believes taking stuff from the bank is morally equivalent to taking 10% of the grain from a farmer. The parent could have been more explicit, but alas, this was how I interpreted it.

[ameister14]

It's not about moral equivalence, it's about likelihood of action.

He's saying because the banks are structured a certain way, the government behaves differently than they would otherwise. Namely that the government feels it has a right to the goods/property of the citizenry that they did not have before. I disagree, because governments did things like this without the banks.

[burntsushi]

> It's not about moral equivalence, it's about likelihood of action.

It's about both. The top parent can't make this statement

> They would have never gone to a farmer and taken 10% of their grain.

without an assumption of moral equivalence.

[yuhong]

I think that is just a normal tax in a different form.

[InclinedPlane]

There's no such thing as an intrinsic value for "money", even in gold. If you keep your money in the form of dollars (or Euros) shoved into a mattress the value can go away through inflation. If you keep your money in the form of gold bars the value can also go away through inflation, but perhaps less so.

[wintersFright]

Physical gold bars are not money but a phyiscal, tradeable asset. It cannot be inflated except via mining - but even then there are roughly known quantities of metal in the ground that are then liberated. What can be inflated however is paper gold where more paper gold exists and is traded than physically exists - some estimate a 100 - 1 paper to physical ratio.

True that gold has no intrisic value, it's value is derived from other people valuing it and willing to trade services for it - and they have done so for thousands of years, where as a typical fiat currency (USD) does not have such a timespan. "Paper money eventually returns to its intrinsic value – zero." (Voltaire, 1694-1778)

btw - as i understand it wasn't a 10% tax, it was a mandatory debt for equity trade- meaning the depositors now own some part of the bank.

[InclinedPlane]

Gold can inflate quite easily, and does all the time, independent of its scarcity. It's possible for the price of anything and everything to go up, on an absolute scale. And if that happens accross the board then you've effectively inflated even some hypothetical absolute currency.

Money has no value, it is in fact nothing more than tradeable debt. It has as much value as the market is willing to allow. To imagine this in an extreme case imagine if the entire worldwid economy collapsed and food bacame very much rarer. Now you'd expect to have to pay vastly more gold for food. Inflation.

My point is that no part of the economy is static, all of it is dynamic. All of it. The value of everything, labor, goods, food, even money is dynamically dictated by the action of the economy.

[ars]

The intrinsic value of gold is also 0.

The intrinsic value of EVERYTHING is 0. Things only have value because people want them, not because they have some intrinsic value.

[rtwtlkj]

I thought gold went up with inflation.

[dmiladinov]

The only way for gold to inflate is for someone to dig up more gold, thereby increasing its supply.

[jpollock]

Gold can be inflated the same way as any other currency. Since people don't typically trade in physical gold, but in certificates used to represent the gold, it is possible to print more certificates than you have gold. While this is a fraud, it is an increase in the money supply.

[fnordfnordfnord]

Yes, paper gold isn't gold. Or at least it won't be when you need it to be.

[Gormo]

Inflation is when the money supply increases in relation to the real wealth that it represents, not when the money supply increases in absolute terms.

[mcantelon]

Gold's value in fiat currency goes up with the fiat currency's inflation.

[awakeasleep]

This sure seems like it would be a violation of a person's right to be secure from seizure of property in the USA.

Does anyone with a legal background have any insight they want to share? I am having trouble wrapping my brain around the idea that money I have in the bank could be seized to pay for someone else's fuckup. I know inflation can sort of do that on a society-wide scale, but seizure of post-tax income from a private bank account? That's mind-boggling.

[mcantelon]

>This sure seems like it would be a violation of a person's right to be secure from seizure of property in the USA.

The US government made a 50%+ profit by forcing people to sell their gold in 1933:

http://en.wikipedia.org/wiki/Executive_Order_6102#Effect_of_...

>Executive Order 6102 required all persons to deliver [gold] owned by them to the Federal Reserve, in exchange for $20.67 ... The price of gold from the Treasury for international transactions was thereafter raised to $35 ... resulting in an immediate loss for everyone who had been forced to surrender their gold ... The resulting profit that the government realized funded the Exchange Stabilization Fund

[snowwrestler]

In the U.S., a new tax like this would require an act of Congress. If it passed it would most likely be found Constitutional--there are basically no limits on the power of the Congress to levy a tax.

But, it would take truly dire straits for Congress to even consider such an obviously unpopular idea. And those dire straits would have a much harder time arriving in the U.S. than the EU.

Cypress (and Greece, and Italy, etc) is in such big trouble because they cannot print their own currency. The U.S. can always bail out its banks because it can create as many dollars as it needs. In fact this is what happened a few years ago, and why the U.S. financial system is currently in better shape than the EU.

The flaws in the EU concept have been laid bare by this financial crisis. When you have financial consolidation without political consolidation, you get unelected bureaucrats deciding to take 10% of the bank accounts in one member nation, and there's nothing that population can do about it. In the U.S., the threat of getting voted out office is a powerful restraint on the governent's eagerness to levy shocking new taxes.

[Silhouette]

When you have financial consolidation without political consolidation, you get unelected bureaucrats deciding to take 10% of the bank accounts in one member nation, and there's nothing that population can do about it.

Part of the reason I think they're crazy to do this is that the above is obviously not true.

There may be nothing the population can legally do about it, but we're living in a time when governments are in genuine danger of going bankrupt, funny money isn't worth the paper it's printed on, and people are literally worrying about essentials like putting food on the table and keeping a roof over their kids' heads. Sooner or later, if we continue down this path, something is going to give, spectacularly.

Unfortunately, when that happens, it will probably come with a horrific body count and potentially even civil or all-out international war. That's the really terrifying thing about this whole mess: it is disrupting the basic fabric of society, the implicit trust we all place in our political and legal and financial systems so we can enjoy our modern, civilised lifestyles. We take a lot of things about that civil society for granted that we would miss dearly if they were gone.

We can only hope that whoever thought this blatant cash grab was a good idea will come to their senses in time to contain the fallout if they go through with it.

[Pro_bity]

I cannot comment on the rights of a person in the EU against seizure of personal assets. In the United States there is a right to due process of law if the government wants to deprive citizens and some other classes of people (long conversation) of property (money or actual physical property) or freedom (jail). This can happen through legislative action and (sometimes) by the fiat of an government agency like the IRS, but when either of these happen people can get the matter heard in court. However, at times Due Process can be a fuzzy concept, like when property is seized as part of certain drug related or anti-terrorist laws. TL;DR: This type of taking would be harder to do in the US unless you are a terrorist of a drug dealer/smuggler/or in possession of drugs.

[yuhong]

Yea, there is a reason why Glass-Steagall was enacted.