Friday, March 29, 2013
Can Cyprus deal happen elsewhere?-3
Now I don’t want to scare you folks but the fact is that the situation in Cyprus has created a dangerous precedent. You know that everybody is not rich and they build up their wealth slowly and now with the deal in Cyprus, their wealth above the threshold limit will be wiped out. Can it happen elsewhere? Before this, the deal in Cyprus was also being applied to Greece but since it become obvious that it is the so called "too big to fail" it was never implemented in the countries where the European Union gave aid. But after Cyprus, I guess it seems that this type of analogy was abandoned and as you know Cyprus was too small from the start to create a ripple effect on the other European Countries so this was like the experimental ground on which the deal was experimented on. But it can happen elsewhere too. Once the gloves are off, how would you know it can't happen elsewhere? I was talking to a guy about how it can happen in the U.S. but he kept on insisting that we have a guarantee up to a certain amount that the deposits are secured. My point was that, what if there is an emergency, then what, but he was adamant that it cannot happen. But once again as we know that there are no certainties in life and this is also true for the big economies as they are mired in heavy and unsustainable debt. So folks don’t be so sure that this Cyprus deal is a one off event as we are drifting towards unchartered territory and nobody knows what happens in the future.