Not all euros are created equal anymore. Cyprus has managed to reach a deal with the IMF and the European Central Bank to get a enough cash to keep going, provided that they 'tax' depositors with more than $130,000 in the bank to pay for it. One major bank will close, but the real kicker is that there will be capital transfer controls. If you have a euro and live in France, you can spend it anywhere. If you have a euro and live on Cyprus, you're just stuck with it.
It means a Cyprus euro isn't really a euro anymore. Okay, the island was running a massive money laundering operation for Russia crime lords (which is just about everybody in Russia with money), but the average Cypriot is going to pay a heavy price even if they don't have money taken out of their bank accounts. It's because their the money just isn't worth very much anymore, their real estate values will drop to nothing and good luck with making a buck of any kind. Sort of like living in a particular US state and being told your money will no longer be accepted in the other states. Confederate dollars anyone? Not quite the same thing, but bankers were behind that whole nastiness too.
The larger picture on this is that any country in the eurozone who starts to have problems with their economy is going to have bank runs. Once this happens anywhere, it's going to push the self-reinforcing spiral toward oblivion. The right is trumpeting that the Cyprus event will escalate into the USD collapse any day now (it's always 'the end of the world' any day now).
This is because Obama wants to take your cash, your guns, your bibles, your white women to ravage, and your sons to turn gay. "Pray to Jesus and buy our gold for your own salvation..." It doesn't seem to occur to them that gold would be even easier to confiscate, oh that's right, they sell gold.
The bad news is that the big money on the right continues to water down US banking regulations. The Dodd-Frank Act did in theory fix all these problems, but unfortunately this all depended on the 'interpretation' of the law by the commissions with authority to write regulations, and they have their own dictionaries. The sort of dictionary where Boehner (pronounced 'boner' in all earth languages) is pronounced 'Bayner'.The President has almost no authority over Federal Commissions, the idea being to isolate them from politics. This doesn't isolate them from people of immense wealth however. Congress has the oversight ability, but the Republicans control the House and disrupt the Senate. Elizabeth Warren is making waves on the Senate Banking Committee, but this isn't translating into any real control over these problems.
There isn't any question about the possibility of another banking collapse, and that it will be far worse than the last one, the question is when it will happen. Almost certainly it will happen by 2016. The outcome of the chaos will depend on who wins the 2014 elections, not that the Dems winning will stop it from happening. Just whether civilization survives or not, and even the Dems are no guarentee of that. www.prairie2.com