If anyone have deposits in European banks (Spain, France, Italy, Portugal, Ireland, Greece in particular) I would strongly recommend that you move those deposits outside the Eurozone to well capitalized banks. Deposits under eur100,000 is still probably safe, anything over that is up for grabs. The EU finance ministers have agreed on a plan to confiscate bank deposits if the bank gets in trouble. Since the equity of banks are generally only between 3-6% of their liabilities, even a small and inevitable loss on their balance sheet (which is full of European government bonds, several which will effectively default within the next 5 years) will mean, just like in Cyprus, that the depositors will take a significant haircut. While on the topic, since the Dollar is likely to strengthen and Euro to weaken over the next several years, I recommend putting your cash and financial assets into dollar accounts / assets.
Posted on: Thu, 27 Jun 2013 08:35:51 +0000
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