If you want to see who is going to guarantee your funds, look in the nearest mirror.

I've seen two posts today that put paid to the notion that Cyprus can't happen here. In fact it is possible (if not probable) that it will happen again somewhere in Euro-World.

Now just for the record, I am not a fan of hyperventilating shock scenarios and predictions of disaster. I am perpetually amused at the commercials for gold sellers that flood the radio waves when I'm out running errands at lunch time. Well, I'm not one of them. Each blip in the economy is not the end.

But this post in ETF Daily News and this one at Seeking Alpha give very detailed and technical explanations of how, in fact, in can happen here.

Again, I want to say that I do not believe this will happen just that it can happen within the legal framework that sits atop our financial system. My money is still in the bank and my retirement account is still at eTrade.

Still, as the ETF Daily News author says, "If you want to see who is going to guarantee your funds, look in the nearest mirror." This will win the award as my favorite quote of the week.

With Friends Like These ...

With friends like these, who needs enemies? This picture (from Pragmatic Capital) compares industrial production in the Eurozone over the last several years.

Everything seems to go swimmingly for the Euros until 2011. Here's the bonus question; what financial event began in late 2010 and continues to this day? (No cheating!)  Okay, it's the European union and the Euro currency struggles.

Oh, and Pragmatic Capital has some other interesting tidbits I'd like to share.

• Spain's stock market is worth 50 percent less than in 2007 and hasn't moved since joining the Euro.
• Italy's market is down 60 percent and is lower than when it joined the Euro.
• Portugal's market is over 60 percent lower and hasn't moved since joining the Euro.
• Greece's market (the most popular example) is down 80 percent.
• Cyprus' market is down 98 percent from its 2007 high. Yes, that's right, 98 percent!

As the title says, with friends like northern Europe, the Mediterranean countries hardly need enemies.

Bail-Outs, Bail-Ins, and Old Fashioned Failures

The recent drama in the Eurozone and, specifically, Cyprus is worth the commentary of people a lot more skilled in financial analysis than I. Future careers at organizations like the International Monetary Fund will be made by young people just now writing their doctoral these on bank failures.

Because an old-fashioned bank failure is what we're seeing happen to bankers, the investors, and the depositors. It's the fate of the depositors that is grabbing the most attention because plain-old middle class folk are being stuck with the bill. How would you enjoy losing 10 percent of your life savings?

The most important turn in this story is the seizure of deposits; what some have dubbed a "bail-in" instead of a bail-out.

So I invite you, dear reader (and bless you, whoever you are), to take a moment to ponder what happened to bank depositors before the Great Depression. In those hoary old days maybe your bank had private deposit insurance and maybe it didn't. If the bank went under you could very well lose your deposits - maybe your life savings.

Which is why the pictures of long lines of people rushing to take their money out of failing banks in the Depression are so famous. Government deposit insurance came out of that as a comfort check for people to keep their money in the banks instead of precipitating a run on a bank and only making a potential failure into a real failure.

Well, that's what's happening today. Europe has now set the precedent that your deposited money greater than 100,000 Euros is now at risk. You had better understand that risk and the solvency of your bank. Depositor beware.

Ta-Da! Give them a Nobel Prize

As I pointed out here and here, North America is now an oil and gas producing powerhouse and it will only grow over time.

What more proof? Check out the graphic and the article here at Pragmatic Capitalism.

The United States has surpassed Saudi Arabia in oil production (at least in November of 2012). Ta-da! (That's the sound a magician makes when he pulls the rabbit out of the hat.) Why, it seems like just four short years ago when America was on an inevitable road to energy decline with no road to redemption. Don't you just love irony?

Now, the fortuitous side effect is what again? Oh, yes, less war over oil. Add to this a seven million barrels a day unmet capacity in Venezuela - just recently removed from the yoke of Hugo (por que no te callas!) Chavez - and suddenly it's not looking like being an oil sheikh is such a hot gig.

The people that developed the fracking technology should get a Nobel Peace Prize.