I won’t sit here writing this, and pretend that I understand all of what is happening in Cyprus. I don’t understand what is happening with the Euro, or the global economy. I am certain the details and minutia would boggle my mind. I can’t seem to wrap my head around how this crisis slipped up on us unaware.
I realize a personal economy and banking is vastly different than central banking, but I just don’t get how this happened so suddenly.
How is it that an internet full of chicken little blog posts saw this coming and the investors and bankers didn’t? That doesn’t make much sense to me at all.
The only thing I do understand about this is that the governments borrowed their way into massive debt, or the private banks made very risky loans, and now the citizens have to suffer.
Last week, there was talk of looting whatever money was left in the citizens’ bank accounts by a tax of as much as 70% of savings, but was eventually overturned. Ultimatums are now being put on Cyprus to accept the conditions of a bailout or face a national, governmental bankruptcy.
As the citizens became more and more aware that any money they had that was in the banks could be subject to seizure or worse, they began to line up at the ATMs to get what they could before it was all gone. To avoid a run, banks instituted limits on cash withdrawals.
Other citizens, angry at even a thought of confiscation of their hard earned money, began to riot in the streets. This is all well and good I suppose, but their infrastructure is crumbling due to this financial mess. Very soon, they will face a situation much like Greece did, shortages abounding.
What most Americans are waking up to is the fact that these incidents are not isolated pockets of misfortune half way across the globe. They are the tremors of a large quake that is about to hit the global economy. The framework for a confiscation, or collapse protection is already being setup here in the U.S. These events could very well be seen in history as the beginning of a very large, sustained, and painful correction.
Hold on to your seats everyone, this may get a little bumpy…