The president of Cyprus assured voters that he would never, ever tax their bank accounts. Now he says the government must do this.
Any voter who heard this assurance should have gone to his bank immediately and withdrawn half of his money. Then he should have sent another 40% to a German bank. The other 10% he might have left in his bank to meet existing expenses.
Anyone who left all of his money in the bank was a fool. He trusted the head of the country.
The crisis in Cyprus sends a message to any bank depositor in Club Med: “Get your money out of your bank today. Get into currency. Use cash. If you run a business, get your money into a German bank.”
Money is digital. A euro in a Spanish bank is the same digitally as a euro in a German bank. But in terms of safety, this is not true. What just happened in Cyprus shows why. A euro in a Spanish bank is not as safe as a euro in a German bank.
There are millions of trusting bank depositors in Europe’s PIIGS nations who have a choice today. Either they believe that things will muddle through, or else they get their money out while they still can. Most of them will still believe that things will muddle through.
Most people don’t learn. They prefer to trust politicians who make speeches to calm the voters. The voters want to be calmed. They want to believe.
They do not understand the formula: muddle through = kick the can.
They do not understand that at some point, politicians can no longer kick the can. Then they will kick the voters.
Voters in Cyprus trusted their president. Today, their banks are closed. The government is considering a tax on the trusting souls who believed the president. Silly voters.
Don’t be a silly voter. Assume that there will come a day when Congress can no longer kick the can. Congress thinks it can kick the can forever. Most investors do, too. Most Medicare recipients do. Most commentators in the media do, too.
At some point, the can gets too big to kick. The banks get too big not to fail. Interest rates finally rise. The federal debt then gets too big to fund.
Think Cyprus. “Cyprus R Us.”
For an accurate report on one more lying politician, click the link.