CIPRO
A number of things. We have seen again that the Eurozone is unable to deal rationally with its problems.This has got to be the most incompetent handling of a Euro crisis event so far, but underlines the hopeless situation the 17 countries that share the common currency are in. The panic is so great that no step is too extreme to preserve the doomed project and to defend the political capital invested in this monumental failure. That we have already come to a stage where politicians blatantly attempt to confiscate innocent and weak citizens' savings is a new low that was somewhat unexpected already at this point. It bodes ill for what can happen when the crisis deepens in the future - which it will.
The idea of a one-off wealth tax, however, is not new. Several research reports have pointed in recent years to the fact that the desperate need for funding in the public sector could - and probably will - eventually lead to confiscation of wealth in a monumental scale. Boston Consulting Group suggested in a recent report that about 29 percent of ALL private wealth, not just deposits, will eventually be likely to be confiscated to cover the debts already incurred. . So we had better get used to seeing our money being appropriated by money-hungry politicians. This is just the beginning. The cat is out of the bag, no matter if this particular deal should fall apart.
What astonishes me is that such an important and extreme move is risked for such a modest prize.The slow realisation that confiscating our money will be the next move in the debt crisis has been made very acute by this blatant move. The most important game changer in years and the most frightening tool in the tool box has been pulled out in the open for a mere USD 5.8 billion. The impact could trigger massive asset capital flows and asset devaluations to the tune of hundreds of billions. The loss of trust will be detrimental to all weak economies. Why on earth did the Troika not save this shocker for a substantial occasion, say a bailout of Spain or Italy? Incompetence? Lack of market understanding? Or even more frighteningly - perhaps because of a wish to introduce this new tax tool to get the voter populations used to new ideas for milking the rich in the future?
This is intriguing and fascinating - it is just a great shame that the population of Cyprus needs to go through such heartache for problems they did largely not create themselves, and have no way to avoid.
Who will be next to find themselves in such a situation is the prudent question to ask?
ITALY OF COURSE
TEMPO DI PROTEGGERSI VIA I RISPARMI DALLE BANCHE ITALIANE ED EUROPEE
MERCATILIBERI@GMAIL.COM
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