Because that's where the money is...

[Walterp]

American bank robber Willie Sutton's famous reply, of course, to a stupid question ("Why do you rob banks, Mr Sutton?").

Guess nothing much changes, then, when the EU have just robbed depositors in banks in Cyprus of around 10% of their savings in order to 'save' the Cypriot banking system.

Hmmm. Not sure I would feel 'saved' if it was my money that had been taken.

Am I alone in thinking that Governments across the World, of all stripes, but especially in the UK, have been anti-saving since 1997? And that, as the planetary financial crisis grinds on, the bias against saving is getting worse when it should be getting better?

So, two questions:

1. Is the risk that the EU might, one day, think of doing the same Europe-wide (just as Argentina did with savings AND pensions, the other day) sufficient to encourage all those fat cat farmers with money in the bank to think about changing their bank branch?

2. Is it time to think of putting your savings into physical assets instead?

What? That's what people are trying to do already? Why didn't someone tell me....

 

[lim x]

I will put both questions into one reply, i have had 2 savings bonds mature recently, and i am looking to put money into something else. Don't like it in ANY bank, its just a case of what to buy?? By the way i am not a fat cat farmer, just someone with some savings.

 

[grumpy]

I will put both questions into one reply, i have had 2 savings bonds mature recently, and i am looking to put money into something else. Don't like it in ANY bank, its just a case of what to buy?? By the way i am not a fat cat farmer, just someone with some savings.

http://www.bloomberg.com/markets/rates-bonds/government-bonds/uk/

 

[Walterp]

Bonds? That HAS to be the riskiest investment idea of the year - don't do it.

 

[Penmoel]

Often thought it would be nice to have a big savings pot of cash somewhere but have never achieved it. Would not want the worry of it being in a bank or savings account now mind.

 

[lim x]

Bonds? That HAS to be the riskiest investment idea of the year - don't do it.

Actually you are wrong there. Not all bonds are the same and some have a guarenteed interest rate - mine were yearly - percentage not brilliant but best i could find at the time, hence why i am looking for something more solid.

 

[grumpy]

Actually you are wrong there. Not all bonds are the same and some have a guarenteed interest rate - mine were yearly - percentage not brilliant but best i could find at the time, hence why i am looking for something more solid.

100% correct there

 

[lim x]

borrow more money buy land and itll all come right!
just take out life insurance if you are a

if you are a what ???

 

[Penmoel]

2. Is it time to think of putting your savings into physical assets instead?

What? That's what people are trying to do already? Why didn't someone tell me....

Something without trace, so land, property and livestock are out of it.

Too late to have a hoard of gold perhaps , nobody would really know you had it, unlike land etc the authorities will know you have it and will devise a way of taxing it if necessary

 

[grumpy]

if you are a what ???

croak soon

 

[Roger Perry]

So you buy a place in Santa Monica and enjoy the scene once in a while..?

 

[will l]

if you are as old as me !

 

[Walterp]

100% correct there

Well, that's not correct, is it?

The risk? It's not in the yield which is usually fixed - it's in the risk that if interest rates double, the capital value of the bond halves.

It never ceases to amaze me how many investors simply do not realise this risk, and its magnitude.

But, when you think about it, SOMEONE must've bought all those interest rate swaps and payment protection insurance policies....

 

[grumpy]

Well, that's not correct, is it?

The risk? It's not in the yield which is usually fixed - it's in the risk that if interest rates double, the capital value of the bond halves.

It never ceases to amaze me how many investors simply do not realise this risk, and its magnitude.

But, when you think about it, SOMEONE must've bought all those interest rate swaps and payment protection insurance policies....

yes it is correct

 

[RobFZS]

guy i know says they're raiding the banks on tuesday, atm they arn't allowed to withdraw money to live on.

 

[azimuth]

you think gold is expensive NOW,,,,,wait till the banks open on Tuesday when depositors can get hold of their cash,,,,,,

 

[grumpy]

guy i know says they're raiding the banks on tuesday, atm they arn't allowed to withdraw money to live on.

you mean this?

http://www.smh.com.au/business/cypr...ope-into-uncharted-waters-20130317-2g8t8.html

 

[RobFZS]

the citizens raiding the banks for their own money i ment, if you don't.

 

[grumpy]

the citizens raiding the banks for their own money i ment, if you don't.

ahh the classic 30s run on the bank

 

[Walterp]

ahh the classic 30s run on the bank

Not really - unlike the 1930's the EU has depositor protection in place, at least up to 100,000 euro.

So if there is a rush to withdraw cash by ordinary depositors, it is not because they are afraid of their bank. But they may, quite rightly, be afraid of their bank regulators.

EDIT: You really, really, couldn't make this stuff up...