Mar 28

I really can’t separate fact from fiction over Cyprus indeed most people seem to argue both ends against the middle. Like me many argued banks should go bust but now that seems unpalatable to people when they lose out. Instead of arguing Cyprus is better off without such banks before they lost any more money they hold pity parties for the victims of their preferred solution! The modern failure to crack eggs is the harbinger of terrible Govt – see 10% tax rate and covering up its repeal.

Cyprus without its main industry should maybe consider leaving the Euro. There are many advantages to an over valued currency but lower employment and growth are seeming by-products. Then again devaluation has just fed deflation in the UK but that is in the teeth of a Banker supporting monetary policy with the added twist of stupid Austerity.

Regardless. The message of Cyprus is never to put money in a bank. You are better off with it insured under your mattress. Scenarios where bank deposits become worthless may seem far fetched to anyone who cannot understand history. Yet what is the differences in holding currency at 0% or a 0.5% bank deposit in an institution which loses money hand over fist and engages in massive fraud?

Indeed without deposits banks will have to offer interest if the Govt would stop pumping them full of cash. Either way feeding the bottom feeders by putting money on deposit at 0.5% is hardly a thing to admit to.

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