What next for Cyprus?

25 March 2013

..Indeed we may ask.

A deal has been struck and depositors with over Euro 100,000 will suffer a significant 'haircut'.  But will it then solve the problem or will it be made worse?

I suspect the latter and this crisis is far from over.

Once the banks re-open you can expect massive capital flight from Cyprus and, I suspect, that it will not just be large depositors only.  Confidence has been damaged and we may well see Cyprus plunged into a further crisis within 6 months.

But I suspect it will not end even there.

We may well see a contagion to other weak Eurozone countries.  Indeed if I had money in Spain, Italy or Greece then I would close those accounts or at least remove all but a few Euros.  

This could seriously damage the Euro and these desperate measures designed to protect the Euro could end up speeding its demise.

• Guest 710 wrote:
  Or shall a latter-day David step forth to face down the forces of Rapine and Plunder and meet their champion head on?
  It would certainly be best to send the account holders of tax-havens to the barbers for their 'trim' could replace the SB&S that is (feared) to be meted out to the masses.
  For if we, the western world, are to go against Conservative policy and and begin to seek-out deposits from those that have them why should it be preferred to set nation against nation rather than reduce the fortunes of the few? Better indeed to turn the mega-billionaires into mere multi-billionaires.
• Brian Dixon wrote:
  the uk will be naxt,mark my words.with bevis and butthead in power we are likly to go under sooner rather than later.
• Brian Dixon wrote:
  oh sorry i forgot to mention gidion.
• Guest 698 wrote:
  That could be construed as investment advice, Barry. But I agree 1000%, what you have said above, it is such a statement of the bleedin' obvious that a disclaimer probably isn't worth the trouble.
• Guest 655 wrote:
  At least I am authorised and regulated to provide it Peter!!!!!!
• Guest 698 wrote:
  Only when you've done KYC and a fact-find, Barry!!!!
• Guest 655 wrote:
  But Peter, there is no client, no actual advice and no regulated investment being discussed.... Anyone can recommend, or not, a bank deposit.....
  
  Seriously, there is an important point here. Journalists have an exemption and are are always publishing totally misleading crap that can seriously damage your finances. I remember one time back in the very early 90''s when a journalist was praising endowments and a week later another journalist was saying how bad they were in the same rag. There was another recent case where some very over simplistic advice, real advice on volatile products, was given that would cause a lot of grief. These people get away with murder.