Reporting from: Cebu, Philippines
I illustrated last week why living in a smaller, more laissez faire country has its advantages over big, bloated governments like the United States. Why have hundreds of average taxpayers toil all year to send the President on one round-trip flight to Hawai’i when you could live in a small country where the leader flies business class?
But big government hates competition and will do anything to keep its power. In the wake of Cyprus, the Troika and other power hungry leaders have been shouting for change in banking worldwide, all in an interest to keep their power and increase their ability to keep you their slave. They are the enemies of economic freedom.
The financial hub of Luxembourg has been under scrutiny for well over a week now. It’s banking sector is significantly larger than its economy, and ECB King Mario Draghi has declared that “the recent experience shows that countries where the banking sector is several times bigger than the economy are countries that, on average, have more vulnerabilities.”
Forget that Luxembourg is the wealthiest country in Europe.
Forget that it has very little debt and could bail-out its banks more easily if it needed to.
Forget that Cyprus – the excuse du jour for going after places like Luxembourg – is a communist country that crashed under a heap of debt… or that it never should have granted entrance to the Eurozone in the first place.
Yes, forget all those things and just blindly follow Mario Draghi in calling every small banking hub into question. He knows what’s best for you.
Of course, the lemmings in the press have picked up on the unfair comparisons between Cyprus and healthier economies and started to talk of issues in Luxembourg.
I absolutely believe the potential for another Cyprus exists in broke countries that dot the Eurozone. The piper will have to be paid and it won’t be pretty. Yet what Mario Draghi and his cabal really want is centralized power to control how you bank.
Consider Andorra. Their banks are among the most liquid in the world. The EU had no problem roping this non-member country into its Savings Tax Directive merely by its location on the map, forcing them to withhold taxes for EU residents.
On the other hand, the EU wants to bash its smaller members and offshore banking havens around the world, only to threaten no help to effected depositors.
Andorra is nothing without banking. Their 180 square miles have scant natural resources and they even lack their own currency. Yet they have a long tradition of old school banking. Or take Singapore, which was built from nothing in a few decades on the principles of economic freedom.
Or Hong Kong, where you can’t walk around Central without tripping over banks. Listen to the big government power grabbers and you’d think these places were about to collapse tomorrow.
That’s because these guys want your money out of the offshore havens and back where they can control it, devalue it, and manipulate it. They’ll try to scare you back into their lair by hook or by crook. Do you really believe Mario Draghi’s empire of bankrupt countries are the place to keep your money? Of course not.
But if he gets enough people to “look over here”, he can chip away at jurisdictions like Luxembourg.
After all, why do so many Americans think banking in another country is so risky when the United States was rated the fortieth safest banking sector in the world?
Ah, the value of good old-fashioned propaganda.