It’s not your money

One of the many unintended consequences of the Cyprus situation is that many people are finally beginning to understand that money they deposit into a bank is no longer their money.  It’s one thing to have some vague notion of what a fractional reserve system is, it’s another to realize that with every deposit, you are making what amounts to an interest-free loan to some of the shadiest and shakiest entities on the planet:

“The district court determined that under Utah law the relationship
between a bank and a depositor is generally that of a debtor to a
creditor, citing Walker Bank & Trust Co. v. First Security Corp., 9
Utah 2d 215, 341 P.2d 944, 946 (1959). United States v. Intermountain
Region Concrete Co., 636 F.Supp. at 284.”

So, when you’re considering the question of whether you should “leave your money in the bank or not”, you are committing a category error.  What you are actually deciding is “do I want to lend my money to this particular corporation or not”?

These days, loaning one’s money to banks strikes me as about as wise as loaning it to the homeless guy living under the bridge.  Sure, there is a chance he’s not going to spend it all on alcohol and default, but you have to assume that is the most probable outcome.