It appears that we have a new meme:
If a gaffe is what happens when a politician accidentally tells the truth, what’s the word for when a politician deliberately tells the truth? Dutch finance minister Jeroen Dijsselbloem, the current head of the Eurogroup, held a formal, on-the-record joint interview with Reuters and the FT today, saying that the messy and chaotic Cyprus solution is a model for future bailouts.
Those comments are now being walked back, because it’s generally not a good idea for high-ranking policymakers to say the kind of things which could precipitate bank runs across much of the Eurozone. But that doesn’t mean Dijsselbloem’s initial comments weren’t true; indeed, it’s notable that no one’s denying them outright.
New Zealand is apparently in the process of giving bank depositors a haircut, in addition to all the EU countries that are contemplating the same. (My guess is that Spain, Portugal, Italy, Greece, and Ireland are first in line for haircuts.) I don’t think it will be long before this idea spreads to the governments of every country that is having trouble in its banking sector. It could even spread to the US. And take note, because even though the tax measure failed in the Cyprus parliament, the tax measure still got shoved down Cypriots’ throats.
My advice is to keep as little money in your bank accounts as possible. Either hold cash in hand or convert it to precious metals that you can keep in your possession, but keep as little money in the bank as possible. Contrary to the claims of the media, the money you deposit in the bank is not protected by deposit insurance (the FDIC) if it is taxed away from you. If the US government decides to unilaterally enact a one-time tax on bank deposits, you will lose your money, and never see it again. Prepare now.