Just as I had estimated, there would be a fallout because of the move by the Cypriot government to seize private money in its bailout effort, we see in the news the headlines, "FOREX-Euro tumbles after Cyprus bailout plan spooks markets.
" Of course, it is only the tip of the iceberg.
When private property is taken away whether it is a seizure, levy, tax, or even nationalization, then it is to be expected that investors around the world will sit up and take notice.
And investors and speculators will follow suit as they begin to exercise their free-market power.
You can estimate that for the next week or so, the forex market will be in considerable flux as the currencies move from areas of resistance to support and back like a pendulum.
The speculators on the one side will be trying to capitalize on the negative press from the Cyprus debacle.
On the other hand, you have the industry/banks trying to stabilize the currency from experiencing tremendous instability, This levy/tax/theft of personal savings by the government will set the country back on many fronts and may be the beginning of an orchestrated collapse.
"If this tax is levied it will set a precedent.
It raises questions over whether other deposits will be safeguarded in other countries," said Jane Foley, senior currency strategist at Rabobank.
[1] Consumers Reaction Spilling The consumer reaction from the Cyprus move was rife with animosity over the weekend.
Fears of a bank-run, the term used to describe everyone pulling their money out of their accounts at the same time, within the tiny nation of Cyprus may be seen by other members of the EU.
As citizens of other troubled members begin to question whether their own savings will be safe in the banks, they may withdraw a percentage at first, then slowly withdraw more while not adding any additional savings.
The will create tremendous pressure on the banks because their cannot survive with deposits as they need deposits in order to create more money.
Worth Watching The situation is worth watching to see if a correction will take place.
Cyprus will be watched by many around the world as consumer confidence must be restored their first.
Without a move to restoration, the negative-will created will ripple through all the members of the EU.
In the end, it will only serve to make others more distrustful of the banks, bankers, and fiscally irresponsible governments.
For now, the speculators will make money with any opportunity that presents itself and in the people of Cyprus will be the ones holding the bag.
Sadly, it appears that in attempting to put out the fire, the Cypriot government has only poured gasoline on the flames.
This week will be very important one for EU members.
The markets will show us how the business world is receiving this.
The next step after the money from private citizens is gone would be to tax businesses and this is what all business owners need to consider.
Keep your eyes on this.
I certainly will.
References [1] http://www.
reuters.
com/article/2013/03/18/markets-forex-idUSL6N0CA3BW20130318
" Of course, it is only the tip of the iceberg.
When private property is taken away whether it is a seizure, levy, tax, or even nationalization, then it is to be expected that investors around the world will sit up and take notice.
And investors and speculators will follow suit as they begin to exercise their free-market power.
You can estimate that for the next week or so, the forex market will be in considerable flux as the currencies move from areas of resistance to support and back like a pendulum.
The speculators on the one side will be trying to capitalize on the negative press from the Cyprus debacle.
On the other hand, you have the industry/banks trying to stabilize the currency from experiencing tremendous instability, This levy/tax/theft of personal savings by the government will set the country back on many fronts and may be the beginning of an orchestrated collapse.
"If this tax is levied it will set a precedent.
It raises questions over whether other deposits will be safeguarded in other countries," said Jane Foley, senior currency strategist at Rabobank.
[1] Consumers Reaction Spilling The consumer reaction from the Cyprus move was rife with animosity over the weekend.
Fears of a bank-run, the term used to describe everyone pulling their money out of their accounts at the same time, within the tiny nation of Cyprus may be seen by other members of the EU.
As citizens of other troubled members begin to question whether their own savings will be safe in the banks, they may withdraw a percentage at first, then slowly withdraw more while not adding any additional savings.
The will create tremendous pressure on the banks because their cannot survive with deposits as they need deposits in order to create more money.
Worth Watching The situation is worth watching to see if a correction will take place.
Cyprus will be watched by many around the world as consumer confidence must be restored their first.
Without a move to restoration, the negative-will created will ripple through all the members of the EU.
In the end, it will only serve to make others more distrustful of the banks, bankers, and fiscally irresponsible governments.
For now, the speculators will make money with any opportunity that presents itself and in the people of Cyprus will be the ones holding the bag.
Sadly, it appears that in attempting to put out the fire, the Cypriot government has only poured gasoline on the flames.
This week will be very important one for EU members.
The markets will show us how the business world is receiving this.
The next step after the money from private citizens is gone would be to tax businesses and this is what all business owners need to consider.
Keep your eyes on this.
I certainly will.
References [1] http://www.
reuters.
com/article/2013/03/18/markets-forex-idUSL6N0CA3BW20130318
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