The recent fiasco in Cyprus on their bailout plan to save bankruptcy has opened the eyes of many of us who have blind faith in the banking system. Who would have ever thought that a bank could tax any of your money sitting in an insured bank account? If it could happen in Cyprus it's theoretically possible it could happen anywhere. A government decision is all it takes.
According to Marc Faber, the editor and publisher of the Gloom Boom & Doom Report, the banking crisis in Cyprus could be repeated in the United States and elsewhere. The U.S. federal government debt is as high as USD $16.8 trillion. And it is currently getting deeper in debt by USD $3.2 bn/day. If the federal government gets into financial trouble it could arbitrarily decide to take money from the accounts of anyone (foreign or otherwise) held in U.S. banks to pay off all or part of its enormous debt, without a minute's notice. The U.S. Federal debt isn't called "debt held by the public" for nothing. And apparently, could include the public of any other nation, too.
Cyprus' experience sends several messages on both the European and international levels. First, the European Union (EU) and the Eurozone will not hesitate to take any measure to protect the euro, even if this leads to a radical change in the European concepts regarding the protection of private ownership.
Second, the seizure of deposits may extend to other countries, such as Greece, Spain, Italy and Portugal, as announced by the EU. Therefore, the rest of countries in the world will take new precautionary measures to avoid confiscation of their deposits and investments in the Eurozone. Especially since the seizure may not be limited to deposits. It may include other investments, such as real estate, stocks and bonds. All this has created a state of uncertainty. If the financial situation worsens, it could lead to disastrous consequences.