The International Monetary Fund, IMF, has proposed a plan to bailout the island nation of Cyprus by levying a tax on the bank accounts of citizens. This bailout plan has caused a bank run as depositors empty their savings accounts. The original deal was to impose a 9.9% tax on accounts with more than 100,000 Euros and a 6.75% tax on those with less. Another proposal calls for those with less than 100,000 Euros to pay a 3% tax on their savings. Those with 100,000 to 500,000 Euros would be taxed at a 10% rate and those with more than 500,000 at a 15% tax rate. Cyprus has attracted much foreign investments, particularly from Russia. Needless to say nobody likes either plan and one can only imagine how Obama and the Democrats are drooling over doing a similar tax here in the USA.

imf cyprus bailout

I know that many people are starting to think that the economy is improving. They watch the Dow Jones reach new highs and we get a steady flow of happy-news from various government agencies and other sources. But the reality is that America is, as one economist put it, ″the healthiest horse in the glue factory.″ GDP growth is still anemic, unemployment, REAL unemployment, is still above 14% with very high numbers of workers who have been unemployed for more than six months. Not to mention the fact that our labor participation is still very low as nearly 9 million Americans have just simply given up looking for work.

The Eurozone is still a basket-case. One Deutches Bank official recently said that the only one who can save the European Union now is Jesus Christ. The situation in Cyprus proves that the EU is still in deep trouble. The IMF bailout plan for Cyprus is austerity-plus. Be afraid, America, as Obama and the Democrats have already been talking about a ′modest′, ′one-time′ tax of your 401K savings. Just like the income tax was only supposed to be on millionaires when allegedly voted into law in 1913, we see how the camel′s nose has a habit of tearing down the whole tent.