Hey Russia, How’s it Going? This is Cyprus, Can You Float Me $5.8 Billion?

CyprusAnother bailout is drawing close, with Cyprus receiving a $10 billion dollar bailout if their government can come up with $5.8 billion on their own. Sounds like a hefty down payment that a high-risk applicant may receive on a car purchase. Well, that is precisely what it is.

With the country on the verge of economic collapse, a plan to raid private bank accounts was hatched. The idea was to impose 9.9% “tax” on accounts above 100,000 euros and a “tax” of 6.75% on those below. The plan was rejected, and with good reason. Now, the European Central Bank has announced it will stop emergency funding to Cypriot banks on March 25, 2013 if a bailout program is not implemented. If Cyprus does not meet this deadline, it will result in expulsion from the European Union and ultimately economic ruin for the country. So, in a rush Cyprus contacted Russia for help.

Let me mention that Cyprus has an out of control banking sector. The assets are 8 times higher than their GDP. A majority of their depositors are Russian. Much of this is illegal laundered money. There are those that say, oh well it won’t hurt them–they don’t pay taxes on it anyway.

My friend Rick Amato is a former financial advisor for Merrill Lynch who once owned a top financial advisory company in La Jolla, California.  He is now a columnist and nationally televised talk show and radio host.

“This kind of thought is dangerous”, Amato said. “Who is to say who is a bad guy and who is a good guy?  It sets a bad precedent.”

I asked Rick if current situation in Cyprus has hurt the EU’s reputation, and if personal bank accounts falling below the insured level are safe.

“Cooler heads will prevail”, Amato said, “but it does show there is a fundamental economic problem in Europe that has yet to be solved. May not cause a run, but those with money will be watching closely.”

Gold and silver dropped on Friday morning in what seemed to be a reaction to the Cyprus situation. Amato said this was more likely “day to day profit taking by short term speculators rather than the underlying fundamentals in the EU or Cyprus.” He added that typically gold and silver prices rise in dangerous times.

When asked about the possibility of something like this happening here, Rick Amato said, “It’s highly unlikely it will happen here. Less than 1% in the next 50 years. Not in the foreseeable future.”

Although Amato is positive, I remain a bit more skeptical. How should we protect our own assets? How can we prosper in such times?

“There will always be opportunities for growth”, he assures.  “There may be rough spots, but there will always be opportunities…Real estate is still a place to see economic growth.”  Amato also believes the stock market is still a good bet.

Such a plan to seize personal bank accounts is not a new idea. In 1992, Prime Minister of Italy Giuliano Amato, one of the leaders of the Italian Socialist Party, seized by executive order 0.6% of all bank accounts.

Currently, left leaning Argentinian President Christina Kirchner proposed a plan to do the same–raiding personal bank accounts to cover Argentina’s looming debt. This is typically a move made by more socialistic governance, something I believe is incredibly dangerous.

How safe are Americans? I don’t know. Bank accounts have not been plundered, but we too are facing higher taxation. It may be unlikely that such a thing could happen here, but I do think it is something we should keep in mind because it is much better to be prepared than to be stuck up the proverbial creek. Do I recommend buying bulk amounts of fanny packs to carry all your cash? Well, that’s actually something I have considered. I do agree with Rick Amato; I think gold, silver, jewelry, real estate are all good ways to protect yourself. However, I am extremely leery of the global economic meltdown. I don’t know if we will make it out un-scathed.

On that note, off I go—I still have time to stock up on fanny packs before Big 5 Sporting Goods closes.

Sutton Porter

Sutton Porter is a conservative political satirist and pundit. She started as a stand up comic, doing political humor in comedy clubs. Performing for a campaign fundraiser she caught the attention of San Diego, CA radio host Rick Amato, with whom she worked as an on air satirist and producer at The Rick Amato Show on 1170KCBQ. Sutton has written for the Washington Times Communities, Breitbart, emceed various events, and been a guest speaker at rallies and tea parties. Behind the scenes, she has been Media Assistant to Dr. Walid Phares, who was National Security Advisor to Presidential Candidate Mitt Romney. Sutton was the opening act for Evan Sayet's Right 2 Laugh. Her website, http://www.undergroundpundit.com combines serious news stories and leaves PC at the door with a wild dose of political humor.

Related Articles

Back to top button

Please disable ad blocker.

We work hard to write our articles and provide you with the content you enjoy. The ads on the site allow us to continue our work while feeding our families. If you'd please whitelist our site in your ad blocker or remove your ad blocker altogether, we'd greatly appreciate it. Thank you!