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2013 March
30
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10 Lessons from Cyprus

Ten Lessons that the Cyprus Crisis teaches about the fiat currency economy, the debt crisis and gold.

Here are ten lessons that the Cyprus Crisis teaches about the fiat currency economy, the debt crisis and gold.

(1) Cypriots holding physical gold and silver (or other tangible assets that preserve purchasing power) are not being touched by any means. Although we are 100% convinced of our point, we do not see this message appearing, nor do we hear people talking about it. Those with gold and silver are protected.

(2) Money in your bank is NOT safe. It appears incredibly difficult for people to understand this truth. In people's mind, safety and banks go hand in hand, just like yin and yang or day and night.

(3) How is it possible that banks need their depositors' money to survive when they borrow at 0% and lend at rates between 4% and 8%? It shows the whole banking system is truly ailing.

(4) Governments are truly desperate. Still they keep on pretending nothing major is going on. They have a plan for everything. But time and time again, they surprise us with unexpected major problems. The bankruptcy on major Spanish and Italians banks earlier this year are recent examples; the Cypriot thing is unimaginable.

(5) Didn't we learn only half a year ago from the European political class that the debt crisis was solved? Didn't we hear that they would do whatever it takes to get the economy rolling again. Either they truly don't know what they are doing and talking about, either they are liars of the highest degree … or both.

(6) The Cyprus Crisis shows that the debt crisis is not over, it is only worsening.

(7) The whole scenario was organised. The central bank blocked the electronic payment traffic in and out of Cyprus during the weekend. What other surprises and costs may come to citizens?

(8) What did the financial and monetary system solve since the big crash in 2008? Indeed, nothing. The symptoms of the crisis are becoming worse. It means that the true crash is yet to come.

(9) Keeping your money on your savings account not only has no yields, but also has a risk of losing (part of) it to the bank itself.

(10) Trust is what is touched much more than the bank accounts. The next crisis will be driven by trust [and your belief that fiat currency is real wealth]. As our money system is only backed by trust (hence "fiat money"), you can be sure that our current money system can potentially be destroyed.