CYPRUS: GOVERNMENT TAKES UP TO 10% OF INDIVIDUALS’ FUNDS ON DEPOSIT WITH BANKS AS PART OF BAILOUT AGREEMENT

March 16th, 2013
Via: BBC:
People in Cyprus have reacted with shock to news of a one-off levy of up to 10% on savings as part of a 10bn-euro (£8.7bn; $13bn) bailout agreed in Brussels.
Savers could be seen queuing at cash machines amid resentment at the charge.
The deal reached with euro partners and the IMF marks a radical departure from previous international aid packages.
President Nicos Anastasiades defended it as a “painful” step, taken to avoid a disorderly bankruptcy.
The Cypriot leader, who was elected last month on a promise to tackle the country’s debt crisis, will address the nation on Sunday.
…
People in Cyprus with less than 100,000 euros in their accounts will have to pay a one-time tax of 6.75%, Eurozone officials said.
Those with greater sums will lose 9.9%.
Cypriot bank officials quoted by AP news agency said depositors could access all of their money except the amount set by the levy.
The levy itself will not take effect until Tuesday, following a public holiday, but action is being taken to control electronic money transfers over the weekend.
Co-operative banks, the only ones open in Cyprus on Saturday, closed after people started queuing to withdraw their money.
“This is robbery and we must get the EU to stop this,” Alan, a British expatriate saver in Cyprus, told BBC News.

More: Savers Bear Brunt of Unprecedented Cyprus Bailout

I bet those who had their money in gold, land, cash, equipment lost approximately 0.

They were the smart ones.

Who would keep their nest egg in a bank? You're just asking to lose it.

Baby Boomers would say it's the safest place to keep it -- FDIC and all that. But in 2013, with meltdowns and collapses on the horizon, everything is different. This isn't 1980.

The dollar can't inflate 16% per year (compounded) forever. It has to go parabolic at some point, and enter the realm of hyperinflation.

Big bailouts usually also destroy currency value. Those that kept their money in cash will also feel the sting.

I never understood why people that think there's some economic tidal wave coming don't think that wave will be large enough to hist their cash on high ground. You'd need to convert your money to a foreign currency if you're really worried about this. Not all of it, but the nestegg you plan on not touching (so presumably you don't need it for everyday expenses). You can legally (and simply, with a phone call) set up a foreign non-dollar denominated account where there are stronger currencies (Australia, Canada, New Zealand)-- again, if you believe this.

I don't know that those currencies will be any safer.

When I say keep it out of USD, I mean keep it in physical gold and silver.
But durable equipment and land is even better -- those things don't disappear with time.

Most traditional Catholics I know don't have the problem, "Where should I store my $100,000 nest egg" because they don't have one. Myself included.

Apropos to the article: Well, I assumed you were concerned about this because the article title referes to a 10% hit, then it says only those with more than 100,000 Euros (which is more than 100K USD) will take the hit. Smaller deposits "only" 6.75%

Apropos to your comment: But anyway, you finished by referring to 'inflat[ing] 16% year over year" so I presume you think inflation will rear it's head in which case currency will not be helpful as a store of value.

Physical gold is too 'dense' a store of value and is poorly suited to small transactions, so if you don't have the "100K nestegg problem" you should stay away from it. If you must use a metal, use silver, it is divisible for smaller transactions, like trading for dry goods or other small transactions. "Junk" silver is ideal for this, and can be bought in bite sized chunks as US coins pre-1965, but you'll be a paying a premium in today's market (even worse for gold of course).

Goods are the best of the ideas you enumerate (and land). You should also have durable consumables for trade e.g. razors, razor blades, sewing needles, soap, shampoo, razors, canned or bottled food, vitamins and over-the-counter medicines, paper, toner cartridges, tires, fishing equipment, ammunition, batteries, Coleman lanterns, diapers, brand name women's accessories/makeup, and/or brandname electronics (radios, tvs, computers), the latter of which runs the risk of obsolescence. Common buidling materials like 2x4s, piping, fittings, screws, nails, nuts in common sizes, saw blades, etc.

In the Weimar period of hyperinflation, those who had land/farms, automobiles, tractors and other agricultural goods did pretty well believe it or not. But, you will not be able to produce everything, so you'll need barter goods (above).

Try 30 to 40 percent

Try 30 to 40 percent

Yes, something like a third off the top of deposits over 100,000

The Russian depositors are furious.

Jim Rogers, Chairman of Rogers Holdings, on CNBC 3/28/13 strongly
advises "Get your money out of the Banks, they are going to loot it."
Wow-CNBC agreed.