Economic calamity has gripped the Mediterranean Island of Cyrpus. The country and its banks were on the verge of bankruptcy. To save both, the government announced that it was raiding saving account of over $100,000 dollars, taking up to 40% of the value.
An expected run on the banks, cause the government to freeze assets. When the banks finally opened, customers could only take out a few hundred dollars at a time.
The economic disaster was caused by gluttonous fiscal policies by the Cyprus government. It just could not control its spending or its debt. Sound familiar?
The nagging question is – Can what happened in Cyprus happen in Cyprus happen here?
My answer – not only can it happen here, It is happening here. As you read this, wealth is being sapped our of your retirement account. The United States government does it in a slower and sophisticated manner. It’s called QE4. QE stands for Quantitative Easing. The 4 is because it’s the fourth time we have done it. QE3 was tried just a few months ago and was a miserable failure. The idea is to print a whole lot more money than is needed and stimulate the economy. So far, the economy hasn’t been stimulated and the dollar has been weakened. It is just a tricky way for the Obama administration to get another stimulus package without having to deal with Congress. Right now we are printing 86 billion dollars a weak.
The government is creating value out of thin air. And when it does it diminished the value of all the other dollars on the market. So the money in your retirement account is worth less. They are taking value from your savings and transferring it to themselves, without the messy bank closing and money grab. We are just like Cyprus.
And if we don’t deal with our long term debt, get ready for QE5.