Federal Reserve

Government to regulate bitcoin.

Peter Schiff has a wider understanding of the Cyprus banking crisis.

"And it's not as if depositors at Cypriot banks, many of whom are reported to be Russian citizens seeking tax havens, were not complicit in the risk taking. Bloomberg reports that over the past five years euro deposits at Cyprus banks returned more than 24 percent cumulatively, almost double the returns on comparable German accounts. The banks were able to offer such returns because they were exposed to riskier assets (i.e. Greek government bonds). What's so wrong with asking those who took greater risks to earn higher returns to give something back when their decisions go bad?
Cypriot citizens, as members of the EU, had the choice to put their deposits in any EU bank. Even after paying the taxes that had been proposed in the bailout, long-term depositors would have made more money by keeping their savings in the high yielding Cypriot banks than low yielding German banks. So what kind of sadistic Rubicon are we crossing?"

I hope Peter Schiff is not advocating theft. I believe he's ridiculing the idea that one manifestation of theft is tolerated while another is not. I get that people profited greater than others from circumstances, but that doesn't mean they should have their profits stolen. The banks should be allowed to fail.

"The predominating fear internationally was not that mom and pop Cypriots would have trouble making ends meet, or that Russian mobsters would have lost any of their questionable fortunes, but that a run on banks in Cyprus would lead to similar panics in Greece, Spain, and then the world at large. As a result, the troubles of an insignificant economy are seen to threaten the entire global financial edifice. This is just the latest sign that our current system rests upon nothing but confidence...which in the end can be ephemeral."

There's the rub.

In a normal fit of corruption, the president of Cyprus warned his conies to move their money out of Cyprus. Of course he did. Why wouldn't he?

"Italian media said 4.5 billion euros left the island in the week before the crisis"

It's like politics equals corruption. Oh, wait....