Government is going to steal some of them…
Cyprus, is country on a small island and a member of the European Union (EU). All members in EU shares the same currency known as Euro.
Cyrus is facing a financial disaster in the country. They lent money to Greece. When the Greek economy came down, the Cypriot banks double the gambling by buying up Greek government bonds in the hopes of a bailout. Unfortunately, Greece is now broke. Cypriot banks owe more money than they have. Actually, Cypriot banks owe more money than the whole country’s GDP. Right now, the Cypriot banks need a financial bailout from the European Central Bank. The bad news is, European Central Bank told the Cypriot that they have to come out with their own money to save the country.
Where to find the money? Cyprus has decided to steal the money from the people! On 15th March 2013, the government of Cyprus announced that it was going to tax (another word for stealing) 6.75% of all bank accounts less than €100k and 9.99% of all bank accounts more than €100k. For example, if you have RM100k in the bank, the next day you wake up you only have RM90k left. What happened? Oh nothing, the government has just decided to take away your money.
As a logical response, everyone in Cyprus rushed to the banks to take out their money. In order to avoid people getting their cash out of the banks, the Cyprus government declared a national holiday and closed the banks. People lined up at the ATM machine and soon found out the ATM machines are EMPTIED.
Here is the ironic part. If the government can steal 6.75% or 9.99% from the people, what’s stopping the government to steal even more? On 19th March 2013, the Cyprus changed the plan. They decided to steal 3% tax on deposits below €100k, 6.75% on those €100-€500k and 15% on those more than €500k. The reality is, the government can steal as much as they want.
On Friday, 22nd March 2013, the government have decided they would steal from their pension funds (equivalent to Malaysia EPF / KWSP). At the point of writing this, there isn’t any plan that is finalized. But whatever “solution” Cyprus government going to come out with, it is going to hurt the people in the country and it is NOT going to be pleasant.
Right now, the people in Cyprus have lost trust the banking system. Shops do NOT accept credit card and cheque, they only accept cash – as whatever payment made by credit card or cheque, the government is going to steal a portion of it. This is a typical example of: your money is safer under your mattress than in the banks.
Whatever happening in Cyprus is hinting us the global debt crisis is not over, it is only worsening. Cyprus is the fire starter and the worse is yet to come. During the time of financial crisis, gold and silver are the safest option to store wealth. Gold is good for storing high amount of monetary value.
However IF the time come for the people to fall back to using gold and silver for daily transaction, it is very unlikely that anyone would use gold simple because the value is too high. 1 gram of gold is equivalent to RM165 (gold spot price). You probably will NOT use your gold to buy some bread / noodle / rice to feed yourself or your family, because the value is too high. Under such circumstances, silver is a better option as silver is about RM3/gram (silver spot price) which is still 55 times cheaper than gold.
In Practical Guide For Investing Silver In Malaysia, you will DISCOVER how to start buying silver using the correct methods. Avoid queuing at the ATM when financial crisis hits, you can better prepare for the greater financial disaster ahead.