Your money's no longer safe

[Skybird]

An inflation of "only" 5% means that you lose half of your savings in 15 years.

We all already get robbed and ripped of, with the robbers even being voted into office to give them the opportunity to legalise their crimes.

Stupid voters, I call that! Instead of voting yourself into doom, burn down the parliaments, I say. But that is considered to be uncivilized, so its better to ruin our fates instead and be a well-behaved obedient victim, that is civil - okay, go voting, every ballot helps.


http://www.spiegel.de/international/...-a-890789.html


An essential summary of what it comes down to by the end of the day.

Germans are right to be worried about their savings because the euro bailouts will make most of them poorer in the long term -- through higher inflation and lower payouts from life insurance and pension schemes. Why can't crisis-hit nations follow the Cypriot example and make rich depositors pay a share?

Nearly half of all Germans fear for their savings -- and with good reason. At times like these, the only thing that is certain is that nothing is certain.

Not even savings accounts are safe, as was recently seen in Cyprus. Such deposits are actually guaranteed to up to €100,000, but the euro rescuers cared little about this as they desperately searched for funds. Cypriot small savers may have escaped this time around, but the realization remains, even beyond Cyprus, that a state teetering on the edge of bankruptcy will resort to all available means to raise money -- and a guarantee is only worth something as long as the entity that stands behind it remains solvent.

Nothing is safe from being seized by the state, no savings account, but also no house or apartment. The Germans experienced this after World War II, when they were charged an extra real estate tax in the form of compulsory mortgages. Governments have even banned the possession of gold during currency crises, forcing citizens to exchange the precious metal for the national currency.

So far, people in the debt-ridden countries of the euro zone haven't had such levies imposed on them. But why not? According to a recent study by Germany's central bank, the Bundesbank, for instance, Spaniards hold more wealth, on average, than Germans.

Greece and Cyprus have millionaires and billionaires of whom many profited from the artificial boom fueled by low interest rates after the introduction of the euro -- a boom that subsequently went bust. Why shouldn't they help finance efforts to deal with the aftermath? Is it fairer to place the burden on the euro bailout fund, and thus distribute it among the taxpayers of other countries?

A levy on assets would immediately reduce the debts of crisis-stricken countries, whereas bailout packages pool risks and shift them to the future.

Those risks can become dangerously explosive. The more countries that have to be bailed out, the fewer countries remain that have to bear the burden -- as long as they are able to. This could even prove to be too much for Germany at some point.

There is no reason to panic. But Germans should be concerned. After all, the bill for managing the euro crisis will ultimately have to be paid, and they will have to shoulder a large portion of this.

If the bailout fails, the bill will be enormous. But no one should succumb to the illusion that the mission won't cost anything if it succeeds.

Germans' savings are already shrinking in real terms because the European Central Bank (ECB) has flooded the market with money and lowered interest rates to nearly zero. Many Germans have already noted with dismay that their life and retirement insurance policies will pay out much less than what was originally promised. Many of them now realize that they will have to tighten their belts when they retire.

Economists have a term for this form of creeping expropriation: They call it financial repression. Actually, given the current situation, it's amazing that only just under half of all Germans are worried about their money.

Things could actually get worse when the large quantity of money that the ECB is printing to finance the euro rescue starts to drive up prices. An annual inflation rate of only four to five percent, which economists say is entirely probable, would reduce people's savings by 50 percent within just 15 years.

But while inflation eats up savings, it also reduces debts. You don't have to be a conspiracy theorist to suspect that this is precisely what many politicians are hoping for. After all, how else should the euro countries, but also the US, Britain and Japan, ever shrug off the crushing weight of their debts?

The outlook is grim for savers, who are caught in a trap. Only genuinely wealthy individuals can place their money in the hands of a fund manager, who can spread the risk and find safe havens by investing on different continents and in different types of assets.

Not surprisingly, some people will emerge from the euro crisis having increased their assets, or at least maintained them -- while the vast majority will be significantly poorer.

Fight them while you still can. Don't wait until you've been crushed and defeated, claiming that only then you could know for sure that they indeed meant you harm. When you're done, you're done. A fool is everybody who voluntarily waits until then. Laws will not save you - they make them. Freedom will not save you - they have taken it away from you. Elections will not save you - all options you can chose from supports their playing rules. Democracy will not save you - it makes it all worse and worse.

Learn to understand that you need to break the rules. These rules are there to keep you in captivity and make you a defenceless victim. Play by the rules, and lose. Respect the authorities, and they will legally rob you. Stay loyal to the system, and it will chew you and spit you out.

[AVGWarhawk]

Has it really ever been safe?

[Armistead]

Nothing really changes. As in the past, big business, banks, the very rich often become that way not from work or selling anything, but through shady means. Take our big bank bailout, the money was mostly to be used to help the middle class and small business, but they took it and invested it where they could increase their bottom line. Today the stock market is great, but the middle class continues to suffer. It will all eventually implode again, they know this and know how to get even richer during the crisis. The banks got bailed out, took millions of homes and invested most the money in overseas markets. Now home prices are going up and they'll make lots of money on the homes they sat on.

I agree with Gates, Buffet, Trump, etc., were headed for a two class nation, where about 10% hold 80% of all real wealth and 80% will be right at the poverty line.

Obama isn't doing anything to help the middle class, his plans lets the riche get richer, just expects them to give more free stuff to the poor. The GOPs plan is no different, except no freebies for the poor, let them die out. No one has a plan to secure a thriving middle class. It's just a matter of time until our economy fails again under the mass of debt. The time will come we won't be able to solve it by more debt and we'll see a depression unlike ever before. About every leading economist agrees.

Has it really ever been safe?

No.
Banks, pensions, insurance, property, gold, silver, wheat....its all a gamble, always has been always will be.

[BossMark]

My money as never been safe since I can hardly walk past a bookies without having to calling in

[STEED]

The true inflation figure in the UK is 5% but due to manipulation a false figure is put out.

Example on the lies in the UK

Slightly off topic..each month the Office of National Statics releases the unemployment figures and each month from Nov12-Feb13 they said unemployment fell and they did revised figures also said it fell bigger but only last week the ONS said unemployment for Nov12-Jan13 was in fact up! You tell me how?

Back on topic

So if they can get away with it so can the Banks...Wait minute they have and continual to lie. Its all going to pot people.

[Wolferz]

The whole bloody mess is just a Ponzi scheme. Destined to implode on itself no matter what is done.
A house of cards can not stand up to the winds of change.

[the_tyrant]

My dad is a professional investor. In his opinion, money that you own that you do not plan on spending or investing is money that you are throwing away.

Remember, inflation will eat your money away. spend it or invest it.

Asian people often have this "save all your money" mentality. And that mentality screwed a lot of them over so to speak.

In high-growth markets like China, inflation is rampant. Thus, you really need to invest it into something. The good thing is, these markets often have a very solid stock market or government bonds.

In slower growth markets, inflation isn't as bad, but there are still many very solid investments that you can invest in. You still shouldn't just throw your money into a bank. Look into bonds, stable stocks that pay dividends, or something like that.

The only time when you should throw your money in a bank is when your currency is deflating. Other than that, invest it in something, or spend it!

[Oberon]

When I read some of Skybirds posts I can't help but be reminded of a young Vladimir Ilyich Ulanov, calling on the people to take control of their wealth, to reject and burn down their oppressors.

And we all know how well that turned out....

[August]

I bought forest with my money. Hopefully it will bring in a fair amount of money from logging for retirement.

[Oberon]

Originally Posted by August

I bought forest with my money. Hopefully it will bring in a fair amount of money from logging for retirement.

A good investment. No matter how cheap electricity may get in the future, there will always be a demand for open fires and wood to go on them. Not to mention wood for environmentally friendly buildings and so forth.
That's the beauty of wood, unlike coal and oil, if done right it's sustainable over a shorter period.

I can't help but be reminded of a young Vladimir Ilyich Ulanov

All extremists end up sounding the same.

[Skybird]

Originally Posted by Oberon

A good investment. No matter how cheap electricity may get in the future, there will always be a demand for open fires and wood to go on them. Not to mention wood for environmentally friendly buildings and so forth.
That's the beauty of wood, unlike coal and oil, if done right it's sustainable over a shorter period.

Do you knbow how high special payments and taxes were for German landlords and house owners in the terrible years of the 20s of the past century? Many shot a bullet through their head.

If the system collapses, nothing saves you. Not gold. Not property. Not stocks. Nothing. The state always has the longer lever to steal from you.

[August]

Originally Posted by Skybird

If the system collapses, nothing saves you. Not gold. Not property. Not stocks. Nothing. The state always has the longer lever to steal from you.

What state?

If the system collapses so does the state. The worst you're going to have to fear is a local potentate filling the power vacuum.

[Betonov]

Originally Posted by August

I bought forest with my money. Hopefully it will bring in a fair amount of money from logging for retirement.

Ha ha ha ha, you had to buy

Just kidding. I inherited my 5 hectares of forrest. And no-one had to die. My grandmother just didn't wanted it anymore and was all transfered to me

Lousy logging oportunity, it's steep and in the middle of nowhere. But it has a registered hut on it which just needs some renovation.