Wednesday, July 10, 2013

Investing for Survival--Don't get 'Cyprused'

CRISIS IN CYPRUS
Why You Need to Spread Your Deposits
The recent confiscation of depositors’ funds in Cypriot bank accounts…and the implementation of capital controls in a euro-zone nation…has set a dangerous precedent for the rest of the world. European leaders claim Cyprus is a “special case” because so many Russians have been parking illicit cash there.
This is a smokescreen. The truth is the U.S. and the EU want to crush offshore banking centers such as Cyprus. Behind the anti-corruption rhetoric, this is nothing more than a fight for market share of the global banking business. What events in Cyprus have shown is that the developed world is getting more “third-worldly.”
Anyone familiar with the Argentina banking crisis of 2001 knows Cyprus has followed the Argentine precedent play by play: bank accounts frozen without warning…ATM withdrawals restricted…angry crowds outside banks demanded access to their savings. Make sure you have plenty of diversification of your bank deposits.
Consider holding some of your “cash” as gold (bullion or coins). If possible, spread your deposits across multiple banks in multiple jurisdictions. This is the best way to avoid getting “Cyprused” next. —Chris Hunter


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