Editor’s note: This article was first published in April 2013, right after the Cyprus bailout. Its fear that the euro could break up and its description of Spain and Italy as risk countries reflect that moment.
A while ago we explained how to protect your savings if Spain ever froze bank accounts (a corralito, like Argentina’s in 2001), although we ended by calling for calm because such a scenario had been ruled out. European leaders must have done something very wrong for me to be asking the question again today. Last year I myself said that the disappearance of the euro was possible, though very unlikely. Today, much to my regret, I think it is possible and likely. We won’t get into percentages of probability and possibility; it’s enough for me that the level of uncertainty has gone up. That’s a sign that we’ve got worse at managing what we call monetary union.
The first thing we need to fight for when we have savings is for our money to beat inflation, and today we won’t achieve that with fixed-term deposits. On top of that, after what happened in Cyprus, my friends, a fixed-term deposit is no longer a safe investment in Europe, or at least not in risk countries (Spain and Italy among them). My heartfelt congratulations to Europe’s managers for encouraging big money to take refuge in tax havens, because imposing a 60% haircut on depositors with more than €100,000 is a call to panic, since it’s a robbery, plain and simple. Cyprus is an exception, they tell us, but now nothing stops those slaves of Germany who govern us from dipping into our savings, whether through tax rises, haircuts or outright raids.
The problem with sheltering or investing money safely is that you need to understand too many concepts, and not everyone is prepared for that. So, today more than ever, people with large amounts of capital will need personal advice from a professional in the field.
This isn’t about lightly advising you to put it in gold, foreign currencies or the stock market, or to open an account in Switzerland. There are many things to weigh up, but do it just in case, because after reading certain articles in the American press, one thing is clear to me: no foreign capital is going to come in here, quite the opposite, and it’s obvious that people living on €420 in family aid are not going to boost consumption in the eurozone. They’ve written us off (the European Union, that is). We’ve destroyed foreign confidence, and they’re attacking the Spanish, Italian and French financial systems again.
Those with large amounts of capital (more than €100,000) should, just in case, start looking for advice to protect it, because things have got serious. Maybe nothing will happen in the end and it will all turn out to be a panic attack, but it pays to be cautious. In the meantime, you can whet your appetite with the opinion we gave on where to put your savings if bank accounts are frozen, although, depending on your capital and personal situation, expert advice is essential.
And I’ll finish by once again congratulating Europe’s leaders on the “bloody marvellous” job they’ve done. The monkey we’ve used as an example several times (with 12 glasses of wine) couldn’t have done any worse.
Featured image: Christostheo, CC BY-SA 4.0, via Wikimedia Commons.
