The Cyprus Bank Scam Continues

The situation in Cyprus is far from over, and things keep changing daily, but not for the better. This situation was grossly mishandled from the beginning, and now the options available are dwindling.

The original plan to steal the savings of bank depositors seems to have been scrapped, but then that had to be in order to stave off panic and civil unrest; maybe across much of Europe. If the Cyprus government had actually taken a percentage of bank savings from all depositors, that would have proven disastrous. But the problem has not been solved, not even temporarily.

Now, the Cyprus government has decided to keep the banks closed until next Tuesday, the 26th of March. Monday is a state holiday there, a fortunate situation for the political class, so keeping the banks closed on Thursday and Friday will allow for 5 more days to come up with some sort of bailout.

Here is the rub in my opinion. Even if a bailout comes to fruition by next week, how much confidence will be gained by the people of Cyprus and the other insolvent countries of Europe? I think little if any confidence will be evident, and that could cause massive problems regardless of any bailout solution.

The people in Cyprus have been disallowed any access to their own bank deposits, and that will continue until at least next Tuesday. So when (if) the banks open their doors, what will be the most likely scenario? What would any normal person do in such a circumstance, especially given that Cyprus is bankrupt, and any bailout will only temporarily support the same banks whose doors are now closed? The depositors will in my opinion want their money out of the banks, and right now!

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Reposted with permission.