Cyprus

[IMHO]

Anyone following what is currently happening in Cyprus. If I understand it correctly, the authorities decided to slap a tax on all monies held in bank accounts. 9.9% tax on all amounts over €100 000 and 6.? tax on below a €100 000. The rumor has caused a run on the banks and all accounts is frozen for withdrawal, including ATM, over the counter and EFT.

My question is, if it goes through, what is the chances of the ANC following the example? Or even if it does not go through, that they try it in any case?

[Dave A]

Happily South Africa doesn't have the same factors in play that have led to the Cyprus situation.

Ordinarily the problem would be solved by a devaluation of the currency, but with Cyprus being part of the Euro zone this isn't an option. The proposed tax essentially produces the same effects as a monetary devaluation.

If you take a look at the slide of the Rand over the last two years, you'll see that we have already been "taxed", and quite a bit more than the Cyprus proposal at that too.

[IMHO]

I suppose that is one way of looking at it. The other way is looking at it as the ANC specifically raiding our accounts to fill their coffers. Devaluation of the rand is not quite the same thing. It is not going directly to the ANC. Can devaluation not be seen as a tax or penalty you pay to the world?

[Justloadit]

They are basically saying that if you are thrifty with your bucks, and a responsible saver, you going to get taxed, so so much for providing for the future.

The one solution to this is of course to stop supported the social grants, and the problem will be solved. My personal view is that the social grants support the non working part of the population. If they actually did some work, they would contribute to the country's economy, not drain it.

[Dave A]

My understanding of the Cyprus situation is the funds generated are going towards reducing the national debt to the Eurozone.

I guess my point is the "ruling party" here doesn't have the same ammunition as Cyprus (and to some extent the Eurozone authorities) to justify a similar raid of people's bank accounts.

It's probably worth pointing out that the Cyprus bank account raid is far from a done deal yet. There are some very stern questions being asked of the move, and it certainly isn't popular politically.

[Dave A]

It's probably worth pointing out that the Cyprus bank account raid is far from a done deal yet.

And now officially dead. The Cyprus government has voted against the move.

[MGM]

We have Cypriot citizenship, thereby European citizenship. The Cypriots bailed out main land Greece, but something to take note of, Cyprus used to have, with the Cypriot pound, the strongest currency in the world, even stronger than the English pound. But times have changed. This is a second Switzerland, banking wise. Even normal citizens from all over the world deposited their money in Cypriot banks, for a good reason. Even major governments, like the Russians, felt comfortable with this. Why? Gas fields off shore from Cyprus. But a Greek is a Greek when it comes to money. Cyprus's state departments, like most of the main land governments, are bloated with not so efficient servants. Corruption is rife and delivery slow.

This is going to be a process to take note of.