Brother, Can You Spare a Dime?

04 Apr

The Mediterranean country of Cyprus’ finances are in a bad way. So bad, in fact, that they decided to raid private bank accounts to raise funds, and then they tried to prevent runs on the banks by simply shutting them all down. They stole private money from their citizens and then prevented everyone access to what was left. As you can imagine, the decision was not a popular one.

Our country’s finances are also in a bad way. Our national debt is creeping up on the 17 trillion dollar mark, so what is stopping our own government from following Cyprus’ example? Most people think it is unlikely, if only because our own populace is far more heavily armed than that of Cyprus. It’s also unlikely because, with a little patience, they don’t need to seize our bank accounts to take our money.

They’re doing it right now. Every time they print more money to cover their debts, it devalues the money already in circulation. One hundred dollars in your savings account today won’t buy as much as it did a decade ago, and thanks to the government’s mad money printing policy, it won’t go very far a decade from now. So without overtly taking anything from you, they are slowly bleeding money from everyone by simply printing more money for themselves while making yours worth less and less each day.

So how can we, as private citizens, protect our assets from being eroded away, or from outright seizure like the unfortunate people of Cyprus. The old adage of not keeping all your eggs in one basket applies; don’t keep everything in one place. Hard assets, like precious metals or property, will always have value and can’t be simply taken electronically. And having some emergency cash at home will come in handy if you’re ever unable to access your bank accounts, like the Cypriots.

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Posted by on April 4, 2013 in Economics


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