Remember all those crazy old people that ‘never trusted banks’ and kept all thei rmoney ‘under the mattress’? Remember how they were a stereotype for foolish, naive, bumpkins? Yeah..well….

Cyprus said on Saturday it was looking at seizing a quarter of the value of big deposits at its largest bank as it races to raise the funds for a bailout from the European Union and avert financial collapse.

Sooooo…..a 25% haircut on ‘big deposits’. Now, it’s my understanding that, to a degree, Cyprus has become a mob bank for the Russians. Even if thats the case, there are bound to be ‘legitimate; depositors who get their accounts smacked as well. No doubt this will trigger the usual ‘make the rich pay their fair share’ nonsense.

Do I think this could happen here? Nah, at least not in this way. I think what’ll happen is that.gov will eye all those lovely pension funds and ‘incentivize’ them to take their money and invest them in special new .gov bonds designed specifically for this sort of thing. Remember that a bond is, essentially, an IOU. .gov will head over to your pension fund and say “Give us all your money and will give you this bond that yields a better rate than what youre getting now”. They’ll, no doubt, throw in some other features to make it more palatable but the end result is they’ll take the pension funds and promise that you’ll get ‘em back later.

Considering the awesomely crappy interest rates at banks and the ‘real’ inflation rate, I cannot fathom why anyone would leave money in the bank anyway. May as well leave it in cash ( or gold ) in the safe at home.

My wife pointed me to podcast about the Euro and it said that when the economic guidelines for entry into the EU were put in place several countries that were so fiscally fubar’ed they wouldnt normally be admitted cooked their books and outright lied to get admitted. Once in the club they didn’t change their ways and now the rest of the EU is obligated to assist them. (I’m looking at you, Greece and Portugal.)

ETA: The link to the podcast is in the comments.

It’s articles like this that make we wanna take what I have in the bank ( I keep a few hundred bucks there to let me use my debit card conveniently) and hand it over to the Metal Pimp for a handful of shiny gold and silver tokens.

Greece is facing a serious shortage of medicines amid claims that pharmaceutical multinationals have halted shipments to the country because of the economic crisis and concerns that the drugs will be exported by middlemen because prices are higher in other European countries.

Hundreds of drugs are in short supply and the situation is getting worse, according to the Greek drug regulator. The government has drawn up a list of more than 50 pharmaceutical companies it accuses of halting or planning to halt supplies because of low prices in the country.

More than 200 medicinal products are affected, including treatments for arthritis, hepatitis C and hypertension, cholesterol-lowering agents, antipsychotics, antibiotics, anaesthetics and immunomodulators used to treat bowel disease.

Why would a drug company ship millions of dollars of product to a customer who apparently has no ability to pay?  Simple math…no one stays in business long when they give away the product instead of selling it.

The lesson here is that when an economy collapses (or comes close to it) those convenient modern miracles may not keep coming. Of course, anyone with hard currency (cough*gold*cough) shouldnt have any trouble getting their drugs since there’s always someone somewhere who can deliver for the right price.

Everything shrinks in a recession: GDP, investment portfolios, even the products on store shelves. Consumer  goods companies know that customers won’t go for price increases during a downturn. Instead they often use a different tactic to offset things such as new competition or the rising cost of raw materials: cutting quantity while maintaining price. Yet it may not be obvious that your ice cream or OJ containers have shrunk. Manufacturers must note new specs on packaging, but the changes don’t have to be advertised (ever seen a now smaller! label?). Here’s a look at one of the most recent examples:

This still comes as news to some people. Apparently, there are still folks out there that don’t actually read the labels on the containers of food they purchase. I’ve been noticing this for a while now. Most notably my 1/2 gal. of Breyers has been melting faster and faster as the packaging continues to shrink and the price remains the same. Same for the spaghetti sauce I buy. The price stays the same, the quantity shrinks and the net result is you pay more for what youre buy but you don’t really notice.

This is kind of a ‘soft inflation’…it’s happening, but it’s being quietly slipped in under cover of careful labelling and packaging. One of the reasons I notice is because a) I almost always evaluate prices by comparing price/oz. and b) I have items purchased last year that I can compare against. This has been going on for a while and if more folks were aware of it more folks might realize how their purchasing power is slipping away.

This is another reason we stock up on things when we can. That can of vegetables that cost $1 per 15 oz. this year may wind up buying an identical sized can next year that only holds 13 oz. at the same price. When you see those sales, stock up.

We’re planning on hitting the local grocery stores Friday and seeing what kinda discounts we can get on turkeys. ‘Cause, let’s face it, prices ain’t going down.

Fella comes to the door yesterday, clipboard in hand, to take a survey for a political candidate. Among the questions was “What is the most important issue to you this election?” and he rattled off things like the economy, debt, jobs, immigration, etc, etc.

Among that list was jobs, federal spending, the deficit and the economy. To me, they all pretty much roll together into one big category of “the economy”.

I was talking to the wife later about the questions and she asked me why I said the economy. To me, that encompassed the most amount of things that directly and indirectly affected our lives. Bad economy? Higher prices. Bad economy? Higher unemployment. Bad economy? Business failures. Bad economy? Higher taxes.  Bad economy? More desperate people.

Once in a while, I get asked why I would prepare with fuel, food, ammo and that sort of thing against what I forsee as an economic disaster. After all, if it’s an economic disaster then all you need to guard against it is an economic defense…such as a big ol’ box of cash and gold, right?

Nope. Here’s todays example..a fella laid off from his job comes back with a gun and shoots former coworkers. And although the story is still very fresh, and the details will probably change, what remains true is that in a bad economy more people are getting laid off, putting them under more stress as they try to keep their homes and their families together and some of those folks are just gonna snap under that stress and take some folks with them. And that doesn’t even include the folks who don’t snap but simply start knocking over 7-11′s, daylight burglaries and doing stickups at ATM’s to keep their houses they couldn’t afford.

So, indirectly, thats how a bad economy affects your safety. It creates a larger group of desperate and unstable people who at some point are just going to go off the rails and commit acts of violence. And this is why in a bad economy it isn’t far-fetched to believe that your preparations and plans against that bad economy should take into account some serious personal safety plans…like things that have triggers and magazines.