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Investment Strategy

The fall of Cyprus implications for the investment strategy shareholders, investors and savers of some Cypriot banks are likely to have slept badly in recent weeks. How of the rescue should however apply in the future as a blueprint to deal of the European Union credit institutions skewed. The current law proposal by European Commissioner Michel Barnier, who calls for clear rules and clear conditions in the order in which of the settlement of banks in line with the thinking of the European Central Bank is a clear indication in this direction. Therefore shareholders, then creditors, then investors with more than 100,000 euro to first, thereafter the country-specific bank guarantee fund and step in only in a final step the International Rescue Fund ESM. Such an approach is certainly welcome as taxpayers in this way only in the last instance for the economic failures of system-relevant credit institutions would be used. For wealthy Bank clients located in this country but the question: how safe is the money despite implicit security guarantee by the Federal Government, applied with a credit institution actually? Although Germany due to its economic strength is global as one of the last safe havens and the German security systems guarantee per far higher after banking group totals as the above mentioned Government-backed pan-European deposit protection in a worst-case scenario but reasonable doubt are attached. This is reflected in a recent Forsa survey, according to which more than two thirds of all Germans to their savings care. Again the continue simmering euro, economic and financial crisis highlights sometimes abstract dangers which were seen as past chapter of economic history in the wealthy industrial States rashly. If (partial) expropriation, compulsory levies, currency reforms, national legal changes, interventions in the grandfathering, taxes or inflation investors who are not early retirement or to abandon a money illusion, also run at non-speculative investments risk to suffer an immediate or gradual real depreciation of their assets.

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