18-Mar-13 World View -- Germany and Russia get Cyprus blame

[John]

18-Mar-13 World View -- Germany and Russia get blamed for the Cyprus crisis


Israel's government turns hardline pro-settlement on eve of Obama's visit

** 18-Mar-13 World View -- Germany and Russia get blamed for the Cyprus crisis
** http://www.generationaldynamics.com/cgi ... 18#e130318



Contents:
Cyprus president pleads for nation to accept bailout terms
Germany and Russia get blamed for the Cyprus crisis
Israel's government turns hardline pro-settlement on eve of Obama's visit


Keys:
Generational Dynamics, Cyprus, Nicos Anastasiades,
European Union, Germany, Russia,
Israel, Benjamin Netanyahu, Uri Ariel, Moshe Yaalon

[Reality Check]

John,
You were 100% right.

Never underestimate the ability of political leaders of this generation to do something incredibly stupid and destructive.

I am speaking of the European leaders not those in Cyprus.

Who in their right mind would believe that confiscating some percentage of everyone's bank account would be the way to prove that deposits in all banks in Europe are safe?

The message here is clear. Anyone stupid enough to leave their money in banks is just making it easy for a government to pass a law and take the money.

And the President of Cyprus arguing that the way to "save" the banking system is to have the government confiscate a portion of the money in the bank accounts.

It is like a pyramid scheme and the politicians in Cyprus want to get 90% of their deposits out before the citizens of the next European country get zero.

How far away can the next bank run be ? In which country ?

[John]

However, the European politicians appear to have violated the
"Kick the Can Theory," which says that they should do nothing
but kick the can down the road.

[Reality Check]

However, the European politicians appear to have violated the
"Kick the Can Theory," which says that they should do nothing
but kick the can down the road.

To the contrary. I believe this represents an "attempt" to do just that ( kick the can down the road ) by a group of individual people who have various primary goals, but all share a very dangerous mixture of being incompetent, immoral and clueless regarding humane nature, economics and history.

Some may want to kick the can down the road on the cheap. By reducing the cost of the bailout from 17 Billion to 10 Billion.

Others may be trying to manipulate the "do it on the cheap" group into changing it to 100% after the bank runs start.

All of those involved in the decision who did not fight this tooth and nail are very dangerous, very reckless people. The type that would start World War III or collapse the world economy because they are clueless and have absolutely no gut feel for the devastating consequences that might likely result from their actions.

[John]

Apparently you're right that this really was nothing more than a
can-kicking exercise. It turns out that it was Cyprus (rather than EU
or German) officials that insisted on taxing small depositors, because
they hoped to avoid losing their Russian business. In fact, Putin is
now criticizing Cyprus for taxing Russian depositors.

The Kick the Can Theory requires that a can-kicking solution must
exist. The pure can-kicking decision would have been for the ECB to
bail out Cyprus' banks completely. The ECB refused, because Germany
didn't want to bail out the Russians, so Cyprus was left to find a
can-kicking solution on its own -- either tax small depositors or tax
the Russians. They tried to take a middle road and tax both, but now
they're getting dumped on from both sides.