Eric King:  “We had a final outcome in Cyprus with regards to depositors’ money.  It looks like up to 75% or more will ultimately be stolen.  You mentioned if that was the template going forward it would collapse the banking system.  They are going to deny this is the template going forward but it’s being written into law in countries like the United States, Canada, England, New Zealand, etc.  If they start to implement this in other countries, talk about what you think will happen.”

Dr. Roberts:  “What it means is that anyone who is alert will simply not have money in excess of the insured amount in a bank account.  This makes it hard for people who have a certain amount of wealth, don’t trust the stock and bond markets, and try to sit in cash.

They would have to spread it around into different banks in order to avoid the confiscation.  I think the confiscation in the United States would come when the Fed can’t print dollars anymore....

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“They would still have to finance the federal budget deficit.

I don’t think the Americans are in danger of this until the Fed can’t print because dollar is being abandoned due to the printing.  I think the main effect is going to be that people are not going to have money in a bank in excess of the insured value.

It will further make people uneasy about all financial institutions and all financial assets.  So if they can seize your bank deposits, why couldn’t they take some share of your pension plan?  I think on the whole this will undermine confidence further in financial institutions.”

Eric King:  “When you say undermine confidence going forward, this has a cumulative as you know.  When does this snowball to a point where there is real panic and we see the flight out of banks begin to accelerate again? 

Dr. Roberts:  “It’s hard to fly out of banks ... You can’t escape the banks, you can only escape how much money you keep in any one bank ... If you pull out (your money), what are you doing to do with it?  Where do you put it? 

Are you going to put it in a safe in your house?  Or you have to look for some other financial asset.  Are you going to put it in the stock market when the stocks are at an all-time high and there is no economic activity, and profits are due to layoffs?  Are you going to put it in the bond market when the real interest rates are negative and the bond market is the biggest bubble in human history?  So they’ve kind of got people trapped.

So what can they do?  They can put it in precious metals, gold and silver, if they can find a place to store it that’s safe.  To prevent that the government and the Federal Reserve short the bullion market in order to drive the prices down, to scare people away from that alternative.

So when you have this kind of rigged system it’s hard for people to protect what they have.  It’s a dangerous time, and it looks like the authorities both in Western Europe and the United States are not really concerned with what happens to the wealth of the citizens, only whether or not a few giant banks can be kept afloat.”

IMPORTANT - Part III of Dr. Paul Craig Roberts remarkable written interview series will be released within hours.  Roberts discusses the gold and silver markets, the collapsing financial and banking systems, the increasingly desperate situation the West faces going forward and much more. 

This write-up is only a small portion of what Dr. Roberts had to say in his extraordinary audio interview.  The KWN audio interview with Dr. Paul Craig Roberts is available now and you can hear to it by CLICKING HERE. 

© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

The audio interviews with John Embry, Dr. Paul Craig Roberts, Jean-Marie Eveillard, Dr. Stephen Leeb, Bill Fleckenstein, Eric Sprott, Gerald Celente, Andrew Maguire and Nigel Farage are available now.  Also, be sure to hear the other recent KWN interviews which include Art Cashin, Marc Faber and Felix Zulauf by CLICKING HERE.

Eric King

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