There is no doubt that the global economy is in turmoil. Or that politicians and economists fail to agree how to get it under control. However this is hardly surprising given the scale of the unprecedented turmoil.
But should you or I, as individuals, be worried the about safety of our money?
Had I been asked this a few days ago then I would say that we should be concerned of the effects of the economy on our society but that there was little cause to doubt the securiity of our personal money. But now there has been a massive shake up of the global economy beyond anyone's expectation.
Bailouts of struggling economies within the EuroZone are nothing new. Not unreasonably these bailouts come with conditions but the conditions imposed on Cyprus by the International Monetary Fund (IMF) have changed the playing field beyond recognition for individuals. For the first time individuals are set to provide funding for a bailout!
The IMF requires that individuals' savings be "taxed" with a one-off levy of upto 10%. This is totally contrary to all precidents whereby individuals' savings have been underwritten by governments. But more worrying is that is can be nothing more than a gamble. The inevitable consequence will be people trying to remove their cash from financial institutions before it gets taken for the levy causing an enforced 'bank holiday' while all banking transactions, including cash withdrawals, are suspended.
Economists can't agree on the effect of mass cash withdrawal but they do agree the results are not good! Such a massive move to disrupt the economy shows that those in charge of the Euro have little or no control of themselves.
Surely it is now time to accept that a multi-country, single-currency does not and cannot work when the size of the economies varies so greatly. Isn't it time to abandon this experiment and learn from the experience. It will be painful for a while but better that the EuroZone is dismantled in a controlled manner rather than waiting for it to collapse under its own instability. Either way the quicker it happens and the quicker the world is able to begin to stabalise, the better!
A European Union with trade agreements and some common legislation is a very useful organisational arrangement. Such a union is not dependent on a restrictive and potentially volitile common currency.
To answer my question...if your money is invested in a EuroZone economy then I would be worried. But in the UK, outside the EuroZone, your money is about as safe as it ever is although it is unlikely to work well for you unless it is being proactively managed.
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