Depositors in the bank of Cyprus are losing everything, blown up by the neutron bomb delivered by Eurothug finance ministers. Between the haircut, a worthless promise to pay interest on captured money, and swapping depositor money for shares in the bankrupt bank, depositors of over $100,000 euros will lose everything. This means thousands of businesses will go bankrupt. Plus, 45% of Cyprus’s economy was international banking, which is now utterly and totally dead.
Even worse, if Cypriots can’t get money out of their banks and rightfully don’t trust them to put money into them, then business and commerce simply stop. How does a
I did not predict the speed of decline because the my assessment seemed too extreme. Surely I was missing something. Even though it looked to me as if Germany had done the economic equivalent of nuking half the island, and there would be knock-on effects from that level of devastation, I figured I had to be missing something in terms of how quickly the bad effects would take hold.