Crown Warns U.S. Savers to Protect their Money from a Debt-burdened Government
"Drowning in debt, the government of Cyprus decided to target private citizens, not simply for a tax increase, but for their personal assets," observed Crown's Chuck Bentley. "Americans need to protect themselves from that kind of disaster."
ATLANTA, May 7, 2013 /PRNewswire-USNewswire/ -- "The 'Big, Fat, Greek Banking Disaster' taking place in Cyprus right now should cause savers in the U.S. to stop and consider whether they are at risk of losing their savings – and not to a financial downturn," said Crown CEO Chuck Bentley, writing at the Washington Times today, in a piece titled, "When Governments Rob Banks." "This is of great importance as the U.S. government borrows 46 cents of every dollar it spends."
In a struggling euro-zone, Cyprus became the first country to hit up depositors to fund its survival. And it is quite a hit. The Wall Street Journal reported: "Cyprus Popular's uninsured depositors will probably take losses of as much as 80% of their holdings over the guaranteed limit of €100,000; Bank of Cyprus depositors stand to incur losses of as much as 60% of their uninsured deposits, according to initial government estimates."
Those taking comfort in the larger number of banks active in the U.S. should know that while 98.5 percent of all American banks are community banks, they hold only 12 percent of the banking assets. Meanwhile, the megabanks, which make up only .21 percent of all banks, have 69 percent of all banking assets. Our economy also teeters on the brink of too-big-to-fail banks that could implode from too much debt.
"At this point in our national and personal conversations about debt, it is time to acknowledge that a terrible price eventually must be paid when too many resources are required to pay for past excesses," said Bentley. "And those of us who save must consider the risks we face when cash is within reach of a financially stressed government."
To protect your savings:
- Never deposit more money in any bank than the FDIC will insure. That is $250,000 per depositor, per insured bank. If you are blessed with more resources than that, spread the money across reputable financial institutions.
- Never put money in a bank in distress. Most of us have had our credit checked for major purchases by a bank or lending institution. You should return the favor. Check out Bankrate.com for more information on your bank.
- Always consider ALL your investment options. Be sure to diversify and consider investing in a business where your money will go to work and is not so easily available to seizure.
Bentley noted: "The real question however becomes whether the federal government has learned anything from this Greek tragedy. Ultimately the gap between resources and debt will be too large to fill, and our own government will be considering all its options – and all available resources – public and private."
Chuck Bentley is CEO of Crown, a nonprofit business and personal finance policy and educational organization, and best-selling author of "The S.A.L.T. Plan: How to Prepare for an Economic Crisis of Biblical Proportions" as well host of the nationally syndicated radio feature, My MoneyLife™, follow him, @chuckbentley.
For interviews, email [email protected].
SOURCE Crown
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