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Cash out your savings NOW

2013-03-18T21:17:31+00:00

“It could never happen here,” you might think. Think again. The European Union and the International Monetary Fund are forcing the government of Cyprus to confiscate savings from bank depositors. People who have 100,000 euros or more in the bank will see 10 percent of their savings confiscated by the government to pay off the public debt. People who have less than 100,000 euros in the bank will have only 6.7 percent of their savings confiscated.

The announcement caused a run on the banks in Cyprus. They are now closed, and every single ATM on the island is empty.

If it can happen to Cyprus, it can happen to you. Luckily I’m already in the process of liquidating my savings. It’s depreciating more than 3 percent per year anyway because of inflation. I might as well spend it while it’s worth something. And while it’s still mine to spend.

UPDATE: As of 03/21/13, the Parliament of Cyprus did not support the confiscation plan as originally proposed. (The mass media has decided to call the confiscation a “tax” to make it sound more palatable.) Currently the Parliament is considering a 5 percent / 2 percent confiscation rate (5 percent from bank accounts of 100,000 Euros or more, and 2 percent from bank accounts smaller than that). They are also considering nationalizing (confiscating) pension funds owned by state-run companies. Meanwhile, Russia is proposing its own bailout plan for Cyprus in exchange for oil drilling rights in Cyprus and offshore. And the banks will remain closed for the foreseeable future, because the government of Cyprus is afraid that the moment the banks reopen, the populace will immediately withdraw all available funds and topple the already-insolvent banks into outright bankruptcy. Other EU countries are afraid that the run on banks will spread to them. We live in interesting times.

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