Retirement savings ....Yikes !

[keegs]

I'm not sure how accurate your characterization of events in Cyprus is daugen.

Several Cypriot banks are insolvent and the EU has offered a bailout with terms that require some depositors to take a hair cut on their accounts.

I'm not a banker but my understanding of it is is when a depositor deposits cash into a bank account, the asset becomes the asset of the bank. Deposits are what the bank uses to make loans. If the bank, by whatever means becomes insolvent then depositors are essentially creditors in a bankruptcy.

I don't recall so many of us expressing support for bank bailouts. Am I missing something?

 

[daugen]

my understanding was that "local" and/or smaller than $100K accounts would not be affected. So if my facts are off, please
correct me. I'm not sure they know right now yet.
I honestly think they see this as a way to tap into the Russian money they've been hiding/investing,
and like Robin Hood, rob from the very, very rich. Perhaps all a fairy tale. But take ten billion from a depositor who has thirty
billion with you, and guess where he's going to spend the next dollar? Like the anarchy in Mexico where a judge has a very short life
expectancy, truly annoy the very wealthy and they are capable of paying for the Guido's and Boom Booms of this world, or their more modern
operational brothers in Central America, to express their displeasure. with prejudice. So if I were a Cypriot bureaucrat signing these orders, I might
think of taking a long vacation.

What is at stake here is the seizure of what I thought were "ill begotten gains". If anything else, this is just robbing the nearest deep pocket.
And robbers should be repulsed...

 

[keegs]

my understanding was that "local" and/or smaller than $100K accounts would not be affected. So if my facts are off, please
correct me. I'm not sure they know right now yet.
I honestly think they see this as a way to tap into the Russian money they've been hiding/investing,
and like Robin Hood, rob from the very, very rich. Perhaps all a fairy tale. But take ten billion from a depositor who has thirty
billion with you, and guess where he's going to spend the next dollar? Like the anarchy in Mexico where a judge has a very short life
expectancy, truly annoy the very wealthy and they are capable of paying for the Guido's and Boom Booms of this world, or their more modern
operational brothers in Central America, to express their displeasure. with prejudice. So if I were a Cypriot bureaucrat signing these orders, I might
think of taking a long vacation.

What is at stake here is the seizure of what I thought were "ill begotten gains". If anything else, this is just robbing the nearest deep pocket.
And robbers should be repulsed...

My sense of it is that some of this was brought on by their own (Cypriot) banking regulations for which those large depositors were very much the beneficiaries. Perhaps also mixed in with this is this unquestioned notion that free capital flows are always a good thing. In fact some would suggest that much of the reason for our own banking system meltdown involved large inflows from China and the oil producing states.

So how far should EU protection be extended in this case? And what would those depositor accounts look like absent a bailout?

This is a very complicated situation.

 

[Gator6x4]

I'm not sure how accurate your characterization of events in Cyprus is daugen.

Several Cypriot banks are insolvent and the EU has offered a bailout with terms that require some depositors to take a hair cut on their accounts.

I'm not a banker but my understanding of it is is when a depositor deposits cash into a bank account, the asset becomes the asset of the bank. Deposits are what the bank uses to make loans. If the bank, by whatever means becomes insolvent then depositors are essentially creditors in a bankruptcy.

I don't recall so many of us expressing support for bank bailouts. Am I missing something?

In the US deposits up to $250,000 are insured by the Federal Government under FDIC. We, depositors in the US have been paying a tax every since the Federal Reserve went into high gear printing money and loaning it to banks a .25% interest. The birth of zero percent loans and their strong growth also has contributed to this hidden, behind the scene tax. Money an individual used to deposit earned from 3% in a saving account to 5-7% in CD's or Annuities. Not anymore, less than one percent is the norm. At least Cyprus is up front and not obtaining the money through guile and deception. I am not one of those Americans who believes that the managers and executives of Banks that lost billions and had to be bailed out by tax payers could in a span of two years be showing billions in profits without some fancy book keeping by someone.

Economist that I have been listening to are saying the current upside down monetary system in the US is only helping the super rich and is being paid for by the Elderly and middle class. Economist also are of the opinion depressed to non existent interest rates on depositors assets , zero percent loans and the Federal Reserve printing money and giving money to the banks at .25 and their encouraging credit card debt so they can earn 19-25 percent on money they received from the Federal Reserve at .25 percent is leading us down the same path Cyprus walked.

 

[keegs]

In the US deposits up to $250,000 are insured by the Federal Government under FDIC. We, depositors in the US have been paying a tax every since the Federal Reserve went into high gear printing money and loaning it to banks a .25% interest. The birth of zero percent loans and their strong growth also has contributed to this hidden, behind the scene tax. Money an individual used to deposit earned from 3% in a saving account to 5-7% in CD's or Annuities. Not anymore, less than one percent is the norm. At least Cyprus is up front and not obtaining the money through guile and deception. I am not one of those Americans who believes that the managers and executives of Banks that lost billions and had to be bailed out by tax payers could in a span of two years be showing billions in profits without some fancy book keeping by someone.

Economist that I have been listening to are saying the current upside down monetary system in the US is only helping the super rich and is being paid for by the Elderly and middle class. Economist also are of the opinion depressed to non existent interest rates on depositors assets , zero percent loans and the Federal Reserve printing money and giving money to the banks at .25 and their encouraging credit card debt so they can earn 19-25 percent on money they received from the Federal Reserve at .25 percent is leading us down the same path Cyprus walked.

It's a fair point to recognize the downside of low interest rates as it relates to savers gator. But some would also suggest that low rates have helped to restore bank balance sheets, the equities and real estate markets and has decreased the chances of a deflationary spiral.

I suppose under these conditions savers can at least tread water by putting some of their money to work.

 

[KTurner]

Some people may be writing this Cyprus thing off as finally taxing shady money. Other people see this as a precedent and are talking about doing the same thing in other EU countries. Maybe it's a stepping stone. Do it to the criminals and let the general populace morally accept it that way, then it's less of a jump to do it to the non-criminals. And yea, anyone that's signing off on giving big crime (if thats what it is) a big haircut better have some big time security.

Keith

 

[KTurner]

The Western World banks/gov'ts have run out of money and are looking at any and all avenues of obtaining more including, but not limited to, printing up Mo' Money!

That train left the station trillions of dollars ago. https://www.youtube.com/watch?v=oGIvw7T0GPI

Keith

 

[keegs]

That train left the station trillions of dollars ago. https://www.youtube.com/watch?v=oGIvw7T0GPI

Keith

Keith,

Some would agree that increasing the money supply may have a negative impact on the equities markets when policymakers at the fed reverse course. Of course it's planned that those policy changes, specifically raising rates, will coincide with a growing economy or at a time when demand is strong enough to counter increases in borrowing costs.

I know that there's a counter argument to this that says a decline in treasuries could require the fed to act prematurely and I suppose that could happen.

I think most would agree this would not be a good thing.

 

[keegs]

US Magnitsky Law draws Kremlin ire

 

[Uncle Levi]

Lack of savings is a lack of discipline for most people. You can always put something away and do without a new toy or item. This is a habit lots of people drawing a paycheck seem to have forgotten or were never taught. That's too bad......$25K is nothing in today's world! My brother never had any savings.......but he always drove a new car, had a great set of golf clubs, new clothes.......at the end....he was always trying to borrow money from someone.....very sad.:2cents:

I'm glad you said " most people". My wife Jo and I have done without toys, vacations and most other things to try to save for retirement. She's 60 and I'm 64 and we were in pretty good shape, but now she's on a heart/kidney transplant list and we've wiped out almost everything keeping her alive the past year and I fear the worst medical expense is yet to come. Please be careful who you judge.