Will Ed Borrow-borrow Balls “do a Cyprus”?

I’ll keep it short today as I’m still in a state of shock at the latest news from Cyprus. I’m shocked that what I predicted yesterday has happened so quickly.

In my blog yesterday I wrote about the coming financial crisis about to hit Britain because no government has the courage to reduce wasteful, unproductive public spending. And I suggested that when our debts got to around £1.8trn, there would be a collapse in market confidence, interest rates on government debt would shoot up and our desperate government would launch a series of measures to grab more of our money to pay for its financial incontinence. One of the things I wrote was that the goverment (Tory, Labour, Coalition or whatever) would ” make a punitive tax raid on our savings (new taxes on dividends, pension funds and even bank deposits)”.

Well, that’s what’s just happened in Cyprus – their government has confiscated/stolen 6.75% of all bank savings under 100,000 euros and 9.9% of all savings above this amount. One person who’ll be watching with interest what’s happening in Cyprus will be our future chancellor Ed Balls. If the Cyprus government can get away with confiscating billions of people’s savings, he’ll be thinking he could do it too.

Yesterday my claim that our government would make a punitive tax raid on our savings may have looked alarmist and exaggerated. Hoprefully today, in view of what has just happened in Cyprus, my warning yesterday doesn’t look quite so far fetched.

Though, at least there’s a funny side to the Cyprus story. As much of the money in Cyprus’s banks belonged to Russian criminals, they’ve just lost around £3bn. There are going to be some rather unhappy Russian gangsters today.

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