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I started a thread on this a few days ago. The situation is scary because people have always viewed their insured deposits as safe. However what most folks don't realize is that your deposits are merely loans to the banks. Sometimes loans go bad. I mean even if the Cypriots don't approve the plan folks will take their deposits out the next time the banks open. The banks in Cyprus are going to collapse.
Cyprus doesn't insure deposits and in fact its main attraction is that it doesn't report banking information to any other countries thus why it is one of the banking locations of choice for Russian mobsters, South American drug dealers, corrupt dictators, American billionaire tax cheats, and just about everyone else who is corrupt and wants to hide their ill gotten gains.
If you really are curious about that then you could try reading a news story from an actual journalism outlet. There have been several linked in this very thread so far.
The old coffee cans buried in the backyard or stuffing the old mattress may come back into vogue soon. I have a stash on hand and have for a long time. Always keep a stash "just in case". Now it may get bigger "just in case". I read where Germany actually wanted 40% and only got 9.9% of folks deposits. Only. Unbelievable.
I just got my kid convinced he should keep his money in a bank rather than in an old fishfood can under his bed. He kept insisting that the banks were going to collapse and he'd lose his money if he put it in a bank and he's probably right.
This is really a bad idea. When people can't be sure anymore that their savings are safe, they will no longer take their money to the bank, which will ruin the economy as banks have to provide companies and people with money.
And it might set a very bad example for other trouble countries - like Portugal - where politicians are also desperately looking for additional sources of income. I transferred most of my money to my parents' account yesterday.
Interestingly, I read that it was mostly Merkel who pushed that idea, while her party announced tax cuts in Germany. They have general elections in Germany this year...
Cyprus is a haven for tax criminals from Russia and Britain, about one third of the money in Cyprian banks belongs to them. So if they feel they need to steal money from citizens in that way, they should at least limit it to foreigners.
They've decided to take from everyone, not just foreigners. BTW, Russian and British govts appreciate this step.
Each country is a separate case and I know nothing about Latvia, it is not even a PIIGS country...
Here in Portugal civil servants (not to mention employees in the private sector) are being fired, taxes have been raised considerably, the budgets of social security and most other areas have been cut, still the country is in a downward spiral. And many people have predicted that as none of those measures changes anything about the sources of the problems...
I saw a story on DW that a lot of young Portuguese people move to former African colonies because of massive unemployment in their own country.
Specifically it is Angola as the recent end to the 40 year long civil war along with the discovery of oil and things like Diamonds mean the economy there is growing at double digit rates. Also China has been giving Angola a huge amount of development aid in exchange for access to all that mineral wealth.
Specifically it is Angola as the recent end to the 40 year long civil war along with the discovery of oil and things like Diamonds mean the economy there is growing at double digit rates. Also China has been giving Angola a huge amount of development aid in exchange for access to all that mineral wealth.
They've decided to take from everyone, not just foreigners. BTW, Russian and British govts appreciate this step.
I don't think so. Putin has expressed his outrage about that step and the British government has said it will pay British customers of those Cypriot banks what is taken away from them. Since the Brits are not doing so well, I suppose politicians are not happy about it either, as they have more important things to spend their money on.
Foreigners have deposited 16 billion Euros on Cypriot banks, which is way more than this rescue mission is all about. So why is it fair to steal from small Cypriots?
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