The Cyprus Contagion Spreads


At the time of the banking crisis in Cyprus I wrote about the risk of governments falling in love with the deal they had hammered out then and making it general policy in other countries.And how this can spell disaster to savers.Link

My worst fears stand confirmed.Remember governments tend to copy each other.Here is a news article I found buried in the back pages of the Economic Times yesterday:

EU strikes deal to push cost of bank failure on investors BRUSSELS: The European Union agreed on Thursday to force investors and wealthy savers to share the costs of future bank failures, moving closer to drawing a line under years of taxpayer-funded bailouts that have prompted public outrage. After seven hours of late night talks, finance ministers from the bloc’s 27 countries emerged with a blueprint to close or salvagebanks in trouble. The plan stipulates that shareholders, bondholders and depositors with more than 100,000 euros ($132,000) should share the burden of saving a bank.  Read more of this post

Money as Debt – Promises Unleashed‘Money as Debt-Promises Unleashed’ – I watched this documentary last night.It is made by the same person who made ‘Money as Debt’.Here is more about it :

This documentary too is worth watching.Personally I found that it challenged my mind to stretch just a bit more to understand the supply of money. Honestly,I think I’d have to watch the movie a couple more times to take in all the implications of the arguments that Paul Grignon makes.The documentary did change my way about thinking about my bank deposits and it managed to convince me that indiscriminate money creation by banks and other financial institutions leads to many systemic problems.But at the same time I’m not able to buy the argument of the earth being unable to support infinite growth.It’s too Malthusian for my tastes.And I believe too much in the ingenuity of man and the abilities of science to accept that the world’s resources are so limited.Admittedly,man may devastate the earth in the short run and pay the price for it but mankind will also learn its lessons well and come up with the right solutions.I also find it hard to see compound interest,investing and modern financial transactions as an unmitigated evil.I believe that every financier is not a gambler. Read more of this post

The Money Masters

I had trouble sleeping last night and so watched ‘The Money Masters’ on the internet.I found this documentary pretty biased.But that’s not to say that the narrator didn’t make some good points.

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