Dodging A Haircut
July 18, 2015 8 Comments
There are always going to be ants and grasshoppers. Unfortunately, after the grasshoppers have partied a country to the brink,on the day of reckoning, the ants will pay the price, for the grasshoppers have nothing to pay with. Savers pay when governments keep interest rates artificially low, savers pay when inflation eats away at the value of their savings and savers pay when currencies are devalued. It is harder for prudent ants to influence governments and society because saving and investing, to progress in an orderly manner, over a period of time is so unsexy. It is far easier to fall for the glamourous visions of grasshoppers that involve great expenses today, often borrowed, to ensure a many great parties tomorrow, that will be no big deal to pay for, given greater earnings in future.
The only recourse left to ants is to disconnect from the dominant ideas of the day and continue doing what their good sense tells them to do. And one skill that they had better cultivate, is to side-step the force that governments of grasshoppers can legitimately bring to bear.
Here is an example of how Greek ants with some savings to spare, chose to dispose them off, when fearing a haircut to their savings balance, as in Cyprus. Remember this, should you ever need it. With limits on withdrawals at ATMs, Greeks applied for and got more credit cards and spent via them.
About Keerthika Singaravel
wealthymatters 
Hey there !
I like the way you write and what you write,more importantly. With the RBI Gov cutting rates consistently,I’ve been starting to stress my lifestyle. A rate cut might,in theory,benefit the middle man by combating inflation but it does good nothing for wealthier people like me.
Do you think I need to be worried ? Though my fd’s are locked till 2018 on decent rates,what alternatives can I seek with regards to investment? I’m a very defensive investor and consider anything except fixed deposits as ‘bad’ or ‘risky’ investment. I also sound 80 I know,I’m only 33 😀
Look forward to what you have to say,thanks.
Ani let me do a post on loan portfolios. Perhaps you will find it interesting.
I afraid I’m not even familiar with the term ‘loan portfolio’. If there is a way to discuss this individually in a professional capacity,do let me know. I’ve no trouble paying someone like you 🙂 ty
Of course. But why not wait first for my posts to get a general idea and see if you like it? As with most things related to money, more than book knowledge sheer street smarts matters more and I’ll try to pass on what I know to you.
Nice post.i liked it.
Thank you. Glad you liked it.
Agree 100 percent. Thanks,look forward to the new post/posts
OK