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It's a bit like the Iraq war.

The analogy is striking. Untold mayhem and suffering unleashed with cascades of "unforeseeable consequences" (mostly foreseeable), because of a mistaken belief which didn't stand up to serious scrutiny : the existence of WMD.

"Growth through austerity", on the other hand, seems to be much more tenacious as a belief : it only took a few months to deflate the WMD myth, but the ECB are laying waste to one country after another, without comprehending the visible disproof of their doctrine.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Mar 18th, 2013 at 08:57:00 AM EST
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This read is no longer supportable. Because if belief in confidence was the guiding star, then actions as arbitrary and unforeseeable as illegally bailing in depositories would be unthinkable. It would simply never occur to someone honestly ascribing to such a paradigm to do this.
They are not doing damage because they do not know better. Damage is the point.
by Thomas on Mon Mar 18th, 2013 at 11:40:56 AM EST
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When they talk about 'confidence' they mean 'investor confidence'. If the 99% are involved in a bank run it is of little consequence as long as 'investors' are 'confident'.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Mon Mar 18th, 2013 at 12:59:23 PM EST
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The point is the arbitrary and unforeseeable nature of the revocation of the bank guarantee. Why would investors think themselves safe from random and illegal confiscations when the people are not? They cannot. And thus, this move strikes directly at the heart of what they profess to hold most sacred. So they must be liars. The values they profess are not the values they hold, and they are attempting to sow chaos.
by Thomas on Mon Mar 18th, 2013 at 01:11:36 PM EST
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The Cypriot banking sector was - and is - a cancer. Having a finance sector that pays nine times the interest of everyone else, and is holding assets 8 times your gdp is madness. This move does not end this state of affairs.
It does damage the savings of everyone in Cyprus, makes whole bondholders that should not be made whole, and undermines the faith in deposit guarantees across the continent. It is vile end-to-end. Evil, embodied in accounting.
by Thomas on Mon Mar 18th, 2013 at 01:19:01 PM EST
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