UNCLE SAM IS A THIEF
There has been global outrage about the proposal from the Cyprus government to have a significant one-time tax on those who have deposits in Cypriot banks. It has been correctly called a theft of private capital. What many fail to realize is that from the beginning, governments have been engaged in this type of theft, including the U.S. government.
As the debt crisis deepens, governments are likely to increasingly engage in various forms of capital expropriation despite the fact that such activities are economically destructive and morally offensive. The U.S. government is now doing precisely what the Cypriot government is proposing, but only with a lighter and more subtle touch.
There are a number of actions governments take to expropriate capital without explicitly saying so. For example, if you have a savings account, a CD or money market fund, there is a good chance that you are receiving less than 1 percent interest on the money, thanks to the Federal Reserve, while government-caused inflation is running at roughly 2 percent.
Thus, you are, in effect, suffering a 1 percent expropriation of your savings each year -- without Congress ever having voted for such expropriation. It gets worse.