Is This The Start Of The Next Financial Crisis

Why Today’s Cyprus Bailout Could Be The Start Of The Next Financial Crisis -- Washington Post

It is a bad day to have your money deposited in a bank in the Mediterranean island nation of Cyprus. And it may just mean some bad days ahead for the rest of us.

Early Saturday, the nation reached an agreement with international lenders for bailout help. Part of the agreement: Bank depositors with more than 100,000 euros ($131,000) in their accounts will take a 9.9 percent haircut. Even those with less in savings will see their accounts reduced by 6.75 percent. That’s right: Anyone with money in a Cypriot bank will have significantly less money when the banks open for business Tuesday than they did on Friday. Cypriots have reacted with this perfectly rational reaction: lining up at ATM machines to try to get as much money out in the form of cash before the money they have in their accounts is reduced.

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Update #1: Cyprus Bank Deposits to Be Taxed in $13 Billion Bailout -- Bloomberg
Update #2: Cyprus parliament to vote on savings levy -- Reuters

My Comment: This is unbelievable .... out of the blue the government decides to seize a part of your savings. Here is an easy prediction .... no one is now going to invest a penny in Cyprus right now, and it would not surprise me if other governments (like Greece, Spain, etc.) are now looking at the situation in Cyprus as a solution to their own debt problems.