Grand Rapids, MI -- (SBWIRE) -- 04/17/2013 -- In today's world it is difficult to stay abreast of everything that is happening financially. Dennis Tubbergen, a financial advisor, author, radio show host and CEO of PLP Advisors, LLC can be counted on to give a hand when it comes to understanding the latest events in U.S. and world economics.

Whether people enjoy his weekly newsletter at http://www.moving-markets.com or his blog at http://www.dennistubbergen.com, Tubbergen is dedicated to sharing his viewpoints and opinions. On April 9, his blog was titled Could the Cyprus 'Bailout Tax' Happen Here?

"The recent 'bailout tax,' a.k.a. confiscation of private assets deposited in banks, was devastating to those with more than 100,000 Euros on deposit in a bank," began Tubbergen. "Forty percent of assets in excess of 100,000 Euros were seized in order to keep Cyprus banks solvent. European leaders used the innocuous term 'bailout tax' to describe what was outright robbery. Bailout tax sounds better than robbery, doesn't it?"

Tubbergen goes on to say that while European leaders insist that this event is one-of-a-kind and that it won't happen elsewhere, he advises you do not believe that for even one minute.

"I think that what occurred in Cyprus will become one of the models for future bank bailouts," he explains. "This rather scary thought begs the question, 'Could anything like the Cyprus bailout tax happen in the U.S.?'"

Tubbergen then states it already has.

"One needs only to go back and review what transpired in the prior economic winter season of the 1930s to find proof of this fact," he says. "If you're a new reader (to my blog), an economic winter season is a period of time during which debt is purged from the system and deflation occurs. During the prior autumn season, debt levels in the financial system rise to unsustainable levels as a result of easy credit and loose money policies. In the history of the U.S., there have been three prior economic winter seasons: the late 1830s, the 1870s and the 1930s."

For purposes of exploring the question, Tubbergen suggests taking a look at the economic winter season of the 1930s. The U.S. was still on a gold exchange system, U.S. dollars were directly exchangeable for gold at a rate of $20.67 per ounce. FDR, following the advice of an economist by the name of George Warren, decided that in light of the deflationary environment that existed at the time that money needed to be added to the financial system in order to try to create inflation to combat deflationary pressures.

According to Tubbergen, FDR had to try to figure out a way to engage in some 1930s style quantitative easing or money printing. The trouble was that given the direct link between gold and paper money, quantitative easing or money printing would cause the price of gold to soar and cause a run on the bank. Folks holding paper U.S. dollars would begin to exchange their paper U.S. dollars for gold. And, since the Federal Reserve had been printing more paper money than there was gold to back it, a run on the bank would prove that there was not enough gold to back the paper money in circulation.

"That would likely have created a currency crisis that would have been massive and ugly," adds Tubbergen. "The only solution was to make it illegal to own gold. So that's what Roosevelt did. He issued an executive order requiring U.S. citizens to turn in their gold. Hoarding gold would be a criminal offense, punishable by fines and imprisonment."

Roosevelt and policymakers of the day argued that this was not confiscation of gold since citizens were fairly compensated for their gold. The problem with that argument is that compensation for gold was in paper money, which began to devalue quickly as Roosevelt and the Federal Reserve engaged in their version of quantitative easing.

"Essentially, this was confiscation of private assets as just occurred in Cyprus," continues Tubbergen. "In my New Retirement Rules™ class, I share a chart with attendees that illustrates the purchasing power of the U.S. dollar from 1791 to the early 2000s. The chart indicates that from the time that Roosevelt made it illegal to own gold through the end of World War II, the U.S. dollar lost about 60 percent of its purchasing power."

According to Tubbergen, that means that over a time frame of about 13 years, Roosevelt confiscated around 60 percent of the gold assets.

"U.S. citizens were not fairly compensated for their gold," concludes Tubbergen. "They were paid off in paper money. Had U.S. citizens been allowed to keep their gold, they would have been 60 percent wealthier in terms of real purchasing power. That's the same kind of robbery as just occurred in Cyprus. It just wasn't overnight."

To read the blog in its entirety go to http://www.dennistubbergen.com and select his April 8, 2013 entry.

Tubbergen’s syndicated radio show can be heard on metro Michigan stations WTKG 1230 AM and WOOD Newsradio1300 AM and 106.9 FM.

About Dennis Tubbergen
Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in Grand Rapids, Michigan. Tubbergen is CEO of PLP Advisors, LLC and has an online blog that can be read at http://www.dennistubbergen.com. To view Tubbergen’s latest Moving Markets? newsletter, go to www.moving-markets.com.

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.