Where is it safe?

         After hearing about and reading about Cyprus banks doing a “bail-in”, i.e. they use their customer deposits to make the bank whole for the bad bets they took, people started freaking out there and elsewhere.  My wife and I are expecting our first kid and had some of our dough in our account set aside to help pay for it and we figured we’d take a little bit out just in case something like that happened between now and when the baby is due so that we’d for sure have enough money to pay some of the upcoming bills.  Funny enough I asked my teller if people were freaking out cause of what was going on in Cyprus and she responded saying, “What is going on in Cyprus?”  To her defense she may have been told to act that way should a customer ask so as to not initiate panic.  That or she just plain ‘ole doesn’t know, which is ironic considering her job and is also very sad/scary.

            So lately I’ve read a few interesting things about Cyprus and heard other things about other countries and what they’re doing.  By the way it is interesting all these things/countries I’m going to mention are already cocked and loaded and ready to go just two seconds after this whole Cyprus thing came about.  Makes me think…well this is a huge deal and people at the top in these institutions and countries knew about it…what else do they know that is a big deal that we don’t know about yet?

So back to things I’ve been hearing.  New Zealand mentioned maybe doing something similar.  People of course in Spain, Italy, and Greece were thinking, “If it could happen in Cyprus then it could happen here” and hence why global markets really were shaken by the Cyprus news and its potential domino effect of collapsing a fractional reserve banking system.  Then a Dutch EU guy said that the Cyprus “bail-in” would be a template going forward for other countries.  Then this morning I read that the government of Canada, and I quote from page 145 of their Economic Action Plan 2013, “proposes to implement a “bail-in” regime for systemically important banks.”  And finally, if that wasn’t enough of course, the other day I read that the FDIC, which is the insurance company you see on all the plaques at your local bank in the U.S. insuring deposits up to 250k against loss, and the Bank of England (why the two are working together I don’t know other than they’re puppets of the central bankers who own them both really) also proposed that a “bail-in” would look like funds getting seized in customer accounts and in exchange for those funds bank depositors would get shares of stock in the bank instead and could have some say in what the bank does at that point.  What is funny about the FDIC saying this is that by co-writing the article that this nugget came out in they’re openly admitting they are NOT going to be insuring bank deposits, but instead are opting for this plan instead.  Not sure how many of you know, but the FDIC, they private company that is supposed to bail out others when they lose their money…got a bail out in the 2008 collapse.  One thought I had was, “Oh cool the guys who are supposed to insure my money, won’t, and when they do on the small amount that they do, they don’t have enough and get a bail out, which is in the form of printed money, which slightly kills my purchasing power.  In the meantime I’m sure there are some execs there who get paid very well.  Cool.”

So…where is your money safe?  Well if you consider worthless shares in a failed bank safe then you’ll be ok to stow your money away at any bank.  Otherwise…if you don’t hold it/own it, its not yours.  

Oh I also heard that last week there were thousands of people who logged into their online banking account and their account was set to $0.  Lesson I learned…I need to reinitiate my paper statements sent to my house each month so I have proof of exactly how much I had in my account should that happen to me.