I just wanted to go on the record that what has happened in Cyprus, with the seizure of bank accounts, is a trial balloon. If the world give it a collective shrug, that a first world central bank seized money from its citizens with no due process, then it will happen again, and it could happen here even. But as of right now, it is no longer safe to hold significant assets in a bank account, and I would recommend removing significant amounts of cash from the bank asap.What Cyprus was planning to do, via European Union diktat, was to take 6.9% out of all accounts up to 100,000 euros, and 9.5% above that, as conditions of the EU bailing out Cyprus. That effort was met with a huge outcry, and to prevent panic and bank runs, Cypriot banks closed. The Cypriot parliament voted that effort down, but banks are still closed, and may yet have bank runs. Cypriots and expats from Russia and the UK were furious, not just at the ministers, but at Angela Merkel, the German chancellor who engineered the conditions of the bailout.
Back in the 1940s, Americans were compelled to buy war bonds, which back then paid a handsome interest rate of 5% (but the dollar back then bought much more than today; a dollar back then would be about $14 today). Today, people are pressured to fund their retirement accounts, which total about $10-$20 trillion. Given the right
Say the government needs to bail out banks, and decide they will levy a 20% surtax on all 401(k) accounts, regardless of value. That means for every $100,000 you've scrimped and saved tax-free, the government is seizing $20,000, never to give it back. If you earn $50,000 a year and contribute 20%, $2,000 of the $10,000 that you put into your account will be captured by the government. If the situation is dire enough, the government will have the right to seize every bit of that $10-$20 trillion, and pay back at a fraction of that to the savers at a much lower rate.
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