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It seems we're facing pretty much the same thing. Anyone who has a 401K plan is considered greedy if they don't want the government taking it away and redistributing it to those who didn't manage to save anything. Just ae they're going after social security of those who earned more or who saved more, the government and it's politicians will need the savings of Americans to keep buying votes.
A 401k plan cannot fail since it is based on your investments... now if you invested in a company that went bankrupt you will lose that part of the investment... What I don't understand about Cyprus is if you had 150k Euros, do you forfeit 50k or 150k? If its guaranteed up to 100k, it should only be 50k, right?
As a second point, if the bank fails, it loses the money... its gone... instead the government is taking the money to pay for the country's debt... that is significantly different than losing the money....
A 401k plan cannot fail since it is based on your investments... now if you invested in a company that went bankrupt you will lose that part of the investment... What I don't understand about Cyprus is if you had 150k Euros, do you forfeit 50k or 150k? If its guaranteed up to 100k, it should only be 50k, right?
As a second point, if the bank fails, it loses the money... its gone... instead the government is taking the money to pay for the country's debt... that is significantly different than losing the money....
But you've still lost that money. It was outright taken from you.
People, business, charities, churches, etc. all stand to lose whatever money they had ovver $100K (USD).
And the sad part is that the big money left the country 10 days before the banks closed. Tell me the ECB/IMF didn't warn them and see the money flowing out.....
A 401k plan cannot fail since it is based on your investments... now if you invested in a company that went bankrupt you will lose that part of the investment... What I don't understand about Cyprus is if you had 150k Euros, do you forfeit 50k or 150k? If its guaranteed up to 100k, it should only be 50k, right?
As a second point, if the bank fails, it loses the money... its gone... instead the government is taking the money to pay for the country's debt... that is significantly different than losing the money....
You don't understand what's going on in Cyprus. Here's what happened:
1) People deposited lots of money in Cyprus, alot for foreigners because Cypriot banks have a reputation of "no questions asked".
2) The banks use this money to make investments, of course it's not sitting in a vault.
3) Those investments went bad with the world economy tanking, so... how do you repay the depositors?
4) The government of Cyprus steps in & takes on that bad debt, they guarantee all deposits up to 100,000 Euros & give the other investors what's left over.
Moral of the story, don't put money in a bank that might lose it.
The lower tax amount on everyone was still a plan that had been considered. It's not like they said - Oh those accounts cannot be touched, those are INSURED. Any money in a savings account is at risk it seems even if everyone wasn't hit this time.
I know that the plan was considered, but I would be happier about the current plan, because once they start taking money that is insured then that will definitely present a scary precedent.. If countries in trouble see it happening in Cyprus then they will most assuredly follow the same course of action.
While I do like this plan better, I do not like the fact that the elite can transfer their money out before doodoo hits the fan while the working person has no choice but to lose theirs.
Quote:
Originally Posted by evilnewbie
A 401k plan cannot fail since it is based on your investments... now if you invested in a company that went bankrupt you will lose that part of the investment... What I don't understand about Cyprus is if you had 150k Euros, do you forfeit 50k or 150k? If its guaranteed up to 100k, it should only be 50k, right?
As a second point, if the bank fails, it loses the money... its gone... instead the government is taking the money to pay for the country's debt... that is significantly different than losing the money....
It seems that they would take whatever amount is past what is insured, so 50k.
I suspect that this means the end of foreign investment in Cyprus for awhile. A person would have to be barking mad to move any money into that country right now.
Since foreign investment is a large component of the economy in many of the small countries, this nationalization of funds doesn't seem like a very smart move.
I suspect that this means the end of foreign investment in Cyprus for awhile. A person would have to be barking mad to move any money into that country right now.
Since foreign investment is a large component of the economy in many of the small countries, this nationalization of funds doesn't seem like a very smart move.
Could mean any EU country as the ECB/IMF said this is their template going forward.
I think what alarned people was that the EU infact did not immediately object to either taxing all accounts. Then they how seem to be Oking a 40% takig of cash from accounts that they didn't in other bialouts.It made people aware that its quite poosible even guan ranteed deposits can be taxed by new law and taken.in reality even the FDIC doesn't have the cash to guarnatee all acounts under the max if a collpase came.There is rsik to all investment of money . Perhaps the EU thought that anyoe who was gettig % interest at thsi time would realise that the rsik is greater i reality.EU offical surely screwed in bring inot question just what they would apporve of as far as trust in banks it regualtes in the future.Mnany people objected to governam,nt loan to basilout US banks but they have to realsie that otherwsie its the bonholders and those with account who take the loss;there is no one else.
Since foreign investment is a large component of the economy in many of the small countries, this nationalization of funds doesn't seem like a very smart move.
It wasn't so much investment as no-questions-asked deposit taking from foreigners.
How about they live within their means based on local agriculture and whatever industry in which they may have a comparative advantage, including but not limited to tourism, then trade based on free market terms of trade, without money-illusion gimmicks?
I suspect that this means the end of foreign investment in Cyprus for awhile. A person would have to be barking mad to move any money into that country right now.
Since foreign investment is a large component of the economy in many of the small countries, this nationalization of funds doesn't seem like a very smart move.
The biggest foreign investor in Cyprus is Greece. So, that is already pretty much a closed door. And foreign investment in Cyprus is heaviest in finance and insurance and real estate.
There is a large British expat community in Cyprus, plus many Brits with vacation homes; and, thus, servicing these is a big business...or was. With Britain in wobbly shape for several years now, and perhaps headed for a triple dip recession this has become a weakening part of the Cyrpus economy. And their Mr. Cameron's only solution seems to be to wag his finger at the EU and lecture, hoping that this tactic will appeal to Brit chauvinism as the economy continues to take on water and he has no hold on the economic situation. With this malaise in the UK it is unlikely that Brits will be strengthening the Cyprus economy any time soon.
An article in yesterday's Cyprus Mail regarding the Russian resident community made two points: many Russians have strong ties in Cyprus and may not just pick up and run, but time will tell; second, smart Russians had already been taking their money out of Cyprus since last year. Once they smelled the stench coming from Greece, and became aware of how deeply Cypriot banks were involved the cash began to move.
Cypriot banks - like Cypriots in general, were drunk on Hellenic nationalism, and they very, very foolishly invested in Greek banks instead of putting their money someplace stable. Very pan-Hellenic patriotic, but, of course, stupid. Greece has been a sinking ship for years, and when the poop hit the propeller the Cypriot banks took a close haircut of the money they had put into Greece. As soon as this happened Cyprus banks were totally and irrevocably doomed.
A question which has been raised in Europe, including Cyprus, though not in these forums, is why Cyprus waited so long to ask for a bailout. There has been no question since the Greek debacle that Cyprus was sunk too. So, why did their politicos wait? And while they waited it got worse and worse and worse. Their legislature is now - after the horse has left the barn - about to initiate an inquiry into why the government handled things the way it did, which is to say - very, very, very badly.
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