Cyprus Teaches World Ominous Lesson
If you have money deposited in any bank anywhere in the world, take heed! This could happen to you. A government decision is all it takes.
More details on the Cyprus bank “restructuring” is coming out. The Wall Street Journal today detailed the losses to individual depositors at two Cyprus banks because of its financial crisis. Government and bank mismanagement of funds caused the crisis.
Depositors, through no fault of their own, are being made to pay. The grand total comes to $10.31 billion taken from their accounts. The EU and WMF are calling the shots.
Here is the latest breakdown from the WSJ…
Cyprus Popular (Laiki) Bank (2nd largest in Cyprus):
- Every depositor will lose 80% of what they had in the bank
- $3.2 billion taken will be used to pay on the bad debt
- Depositors may have to wait 6-7 years to claim their remaining 20%
Bank of Cyprus (Largest in Cyprus):
- 19,000 depositors will be affected
- $8.01 billion taken will be used to pay on the bad debt
- Anyone holding more than $128,700 in their accounts will lose 37.5% of their account deposits
- Another 22.5% will be frozen in non-interest bearing accounts for several months
- No one with less than $128,700 will lose any money
Most of the $10.31 billion comes from foreigners with large bank accounts in Cyprus. Foreigners are paying for most for Cyprus’s bad debts. It came during a nearly two week bank “holiday”.
This could happen to anyone in the world at any time without any forewarning. Cyprus had none. All that need happen is for governments to get together and agree they can do it.
If you have deposits in any United States bank… consider this…
The U.S. federal government is $16.8 trillion in debt and currently getting deeper in debt by $3.2 billion/day.
If the federal government gets into financial trouble it could arbitrarily decide to take money from the accounts of anyone – foreign or otherwise – held in U.S. banks to pay off all or part of its ginormous debt, without a minute’s notice.
U.S. Federal debt isn’t called “debt held by the public” for nothing. And, apparently, could include the public of any other nation, too!