Lessons For US Citizens From The Deposit Confiscation In Cyprus
by Tyler Durden
It was almost exactly one year ago to the day that an entire nation was frozen out of its savings… overnight. Cypriots went to bed on Friday thinking everything was fine. By the next morning, they had no way to pay bills or buy food. It’s certainly a chilling reminder of how quickly things can change. And why. The government was too insolvent to bail anyone out. And as a member of the eurozone, Cyprus didn’t have the ability to print its own money. So they did the only thing they could think of– confiscate customer deposits. Now, in the Land of the Free, you now have an insolvent government and insolvent central bank underpinning a commercial banking system that is incentivized to make risky, stupid bets with their customers’ money. And if there is one thing we can learn from the Cyprus bail-in, it’s that it behooves any rational person to have a plan B, even if you think the future holds nothing but sunshine and smiley faces.