Here's a few headlines from The Drudge Report:
CYPRUS TO SEIZE CITIZENS' CASH...
40% grab on accounts above €100,000...
Russians stand to lose billions...
Prepare to quit Cyprus...
Destruction of a tax haven...
Scary stuff. I wonder when it's going to hit here? And I wonder if the U.S. citizenry have the balls to do what needs to be done either to prevent it, or to avenge it if it does, indeed, happen...
15 minutes ago
It already has. We called the theft of 1.2 billion dollars of customer money.... MF Global.
ReplyDeleteThat's a less naked money grab than robbing peoples' savings accounts in their banks.
DeleteHow so? I understand it wasn't a bank, it was a commodities brokerage firm, but the money was outright stolen from the accounts.
DeleteWhen the firm applied for bankruptcy the investors were supposed to be put in the front of the line for whatever reimbursement was to be had. Instead the creditors got that money and in the investors lost twice, and the government allowed this to happen.
The only real difference I see here is that most Americans didn't give a flying flip because it was a bunch of wealthy people who had their money stolen, and not the lower income people. I find that aspect really sad. Reminds me of the "let's tax the rich" attitude of the democrats.
It's less that on my part and more a factor that investing always carries an element of risk. The investors took the risk, and lost out. Yes, it was a travesty that the creditors got paid off and the investors didn't. It was not the government declaring a bank holiday and taking $40 out of every $100 out of every account with more than $100,000. A savings account isn't supposed to be a risky investment.
DeleteMost Americans don't give a flying flip because American Idol is on, and they don't have an investment portfolio, so it can't affect them as much as whether their favorite singer gets to go on to the next round.
We will have to disagree on some of this I guess, and that's ok. I appreciate your posts regarding this regardless.
DeleteI will say it wasn't a matter of investment risk(s), and I don't know if I am missing something in what you are trying to explain to me, which I admit is entirely possible, but it wasn't an investment failure. The records showed that funds were being outright drained dry by Corzine and his bunch right before the announcements were made.
:)
And there are laws against insider trading for that very reason. They should have been punished for that, and it is a failure of government that they weren't.
DeleteI'm married to someone who majored in econ/finance, and he's explained to me that investing is always a risk--you're trusting that the company/companies you're investing in are obeying the law, and that the other investors are not engaging in insider trading. If they're not abiding by the laws set, the investors are, most of the time, screwed.
Is the potential for making a ton of money worth the risk that the people in charge of the fund are cheating?
That's what I meant by risk.
Arguably, inflation rotting our savings at a rate higher than the laughable "interest" rates is doing something similar.
ReplyDeleteBut yeah. I'm seriously considering stocking up on torches and pitchforks just in case a march on Washington becomes necessary. Maybe buy some tar and feathers too.
Our real interest rate is hovering at about -.25%. Our real inflation rate (not the fudged number they've come up with to avoid raising Social Security payments to where they should be, and torpedoing the system within a month) is somewhere around 10-15%, at a conservative estimate, with some experts pegging it at closer to 20%.
DeleteBut that's less obvious that taking nearly half out of every bank account that is sitting at over a hundred thousand euros. All at once. And with the banks closed so that nothing can be done about it.
Please tell me, Ricki, that you've got plans and capabilities to take care of yourself if the tyrants in DC do the same and close the banks to the point that your debit card isn't working.
DeleteOh, believe me, I do. More in the sense of keeping supplies on hand because I suspect if the US goes bankrupt, money (or even gold) isn't going to do you as much good as beans and bullets and bandaids will....
DeleteThough I suppose I could use a new pitchfork to help me move the compost into my garden before planting time...