The banking crisis in Cyprus is worsening. The banks were supposed to re-open this past Tuesday after a 3-day weekend from a national holiday. Now the authorities say they will open on Tuesday of next week. Who knows?
German Chancellor Angela Merkel wants to be reelected and thus she was a part of this Black Swan event. Germans are not keen on the idea of bailing out Cyprus, because unlike with Greece, Italy or Spain, there is little sympathy for a country seen as a haven for tax evasion and the ill-gotten gains of shady Russian oligarchs. However, those shady guys hold a grudge and make good on their threats.
At least 2 banks are insolvent: http://www.bloomberg.com/news/2013-03-21/euro-area-said-to-weigh-closing-two-cyprus-banks-asset-freeze.html
I doubt the number is that small, especially after the citizens jump at the opportunity to pull their money out. Merchants in Cyprus have moved to a cash-only basis. They no longer accept credit or debit cards because they do not know when or if ever they wil get paid by their bank.
As I have said in the past, cash is king… and it still is. I have recommended keeping 30 days of cash on hand for years. Do you think you will be the first to know if a “bank holiday” is proclaimed? It would be done on the weekend after all banks are closed. Those in the know would have sufficient means to buy necessities. Are you heavily dependent on credit cards? In a crisis, plastic goes by the wayside.
Do I think this crisis will happen in the U.S.? I would rather be prepared and it not happen than to be unprepared and see it happen here. The 2008 Financial Crisis was not announced beforehand. Do you think those in power would provide the populous with an early warning signal?