Cyprus – A warning: PRIVATE WEALTH CONFISCATION
I hope everyone is paying attention. I hope everyone sees what happens when there is no one left to tax, no one left to lend you money but you still REFUSE to reduce spending. Wealth Confiscation. Think about it. What would your world be like if you woke up one day to find the Government TOOK 10% of the money in your savings account. Gone. Not income. SAVINGS. We would all really like to believe it couldn’t happen here. Why take the chance. Reduce spending. Balance the damn budget and reform the tax code. No increase in taxes rates would be necessary. The economic growth resulting from such moves would create a vast new tax base.
But the bailout of Cyprus, agreed to on Saturday, foresees the government seizing 6.75 percent of deposits below (EURO)100,000 ($130,860), rising up to 9.9 percent on those above (EURO)100,000. That signals a huge policy shift for the embattled eurozone.
Now investors are worried that savers will start taking their money out of banks across Europe – just like Cyprus residents did on a weekend ATM bank run.
“If European policymakers were looking for a way to undermine the public trust that underpins the foundation of any banking system they could not have done a better job,” said Michael Hewson, senior market analyst at CMC Markets.