This is a short but interesting thing I came across that gives more reasons to stay informed and be prepared:
As you no doubt have heard by now, the government of Cyprus announced Saturday morning (when the banks were closed) that they would impose a ‘levy’ on bank deposits.
Originally they announced levies of 9.9% for accounts above 100,000 euros, and 6.7% for accounts below 100,000 euros.
In the face of such a massive backlash, they’re now talking about increasing the levy on larger deposits to 12.5%, and reducing the levy on smaller deposits to 3%.
A final vote on the measure won’t come until later this week. But they have imposed a mandatory ‘bank holiday’ this week to prevent people from withdrawing their savings.
And, according to the draft legislation, anyone who doesn’t hand over the money will be thrown in jail.
Now if this doesn’t prove the point of what we’ve been talking about for so long, I don’t know what will.
Cyprus is totally broke. And as we have discussed, bankrupt, insolvent governments have a very, very limited playbook that almost unilaterally involves stealing from their own citizens.
Bankrupt governments can, and do, steal from people. Pensions funds. Private property. And yes, even bank accounts.
This has happened so many times before throughout history; just over a decade ago in Argentina, for example, the government was in the middle of a debt and currency crisis. They shuttered bank accounts and completely vanquished the savings of their citizens.
Here’s my advice, plain and simple: do not hold the preponderance of your assets in insolvent, bankrupt nations. This includes the United States, Japan, and most of Europe.
Rather, move at least a portion of your assets to stable, independent countries. These are the same places that we routinely discuss in this column– Hong Kong, Singapore, Chile, Norway.
An Argentine friend of mine is staying down here at the farm with me, and this morning over breakfast I informed him this morning about what happened in Cyprus.
“Duh,” he responded. “What did they think would happen..?”
It just goes to show, there are two types of people– (1) Those who know that these things happen, and (2) those who refuse to believe that these things can happen.
One group will be able to protect what they have. The other will become victims.
Which one are you?
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