The current crisis of the moment is what to do and how to rescue the Cypriot banking system which is carrying an unsecured debt load of between seventy-five and one-hundred thousand Euros. This is approximately the amount of new debt added each month to the United States total debt due to excess spending which pretty much puts the Cypriot bank debt in perspective. The European Union has much deeper financial crises than the Cyprus situation which include but are not limited to Greece, Spain, Portugal, Italy and even possibly France. What makes the Cyprus problem seem even less of a potential catastrophic disaster is that much of the Cypriot banks difficulties are derived directly from the financial crises in Greece as the Cypriot banks purchased significant amounts of Greek bonds and notes which are now greatly devalued as Greece collapses. Should the European Union find some path to resolving the Greek debt and financial crises, then such a problem, if it paid off Greece’s creditors, would go a long way to alleviating the Cypriot bank debt situation. So, if the Cyprus situation is not quite as dire as it is being made out to be, then why are the Cypriot banks and thus the country and people of Cyprus being subjected to such a severe crisis situation? What exactly is behind all this hyperventilating causing tremors to ripple through the financial world?
The first item that comes to mind is that Cyprus recently became a partner sharing some of the substantial oil and gas finds under the Mediterranean Sea sharing this coming boon with Israel as these fields are drilled and come on-line. What is at play here is partly an attempt to force Cyprus to place their shares in the oil fields up for bids so that all of the European Union can share equally in the benefits and cheap energy which these finds promise. The European Union partners of Cyprus simply wish to play a share the wealth card forcing Cyprus to share its coming wealth with all of the European Union and not simply keep the profits and energy gains to itself. After all, is this not what socialist governance is all about, taking from those who have and giving to those who need so that nobody makes any gains but rather share the wealth, or in this case, share the energy. This is simply a ploy to alleviate Cyprus from the responsibility for selling their energy finds and instead will allow for all of the nations in the European Union to the responsibility for distributing this energy thus making them all equal partners in the Cypriot energy boon which is on the horizon.
Another side of the Cyprus dilemma comes from the well backed rumors that the Cypriot banks had been utilized by numerous Russian oligarchs to launder their ill-gotten gains and that many of these Russians very well might have left serious amounts of wealth in Cypriot banks. These monies may very well have been the main target of the attempted wealth surcharge on the accounts held in the Cypriot banks. Does it not seem to stretch credulity to solve the problem of the Cyprus banks being insolvent by taxing the monies they hold in accounts? If the Cypriot banks have sufficient cash on hand in accounts to cover the required shared burden to facilitate their bailout by taking up to ten percent, then shouldn’t they also have sufficient funds to be solvent? This has all the evidence of a forced run on the Cypriot banks by the European Union in order to leverage influence over Cypriot financial affairs and making a stab to get at a percentage of the Russian monies which are suspected of being on deposit in the very same Cypriot banks that are insolvent. This would also explain why Russia jumped in so fast to offer to also bail out the Cypriot banks. Perhaps the Russians have something in these banks in Cyprus which they prefer does not become under public scrutiny.
Then there is the one entity which made their bid to bail out the Cypriot banking system may have validated both of the above theories of what is occurring with what hints at being a manufactured problem. The giant Russian energy company Gazprom jumped up noticeably quickly offering to bail out the Cypriot banks in exchange for a percentage of the oil fields resources recently found in Cypriot and Israeli waters in the Mediterranean Sea. Having Gazprom receive rights to segments of the Cypriot energy finds would serve both dilemmas detailed above, the Russian laundered funds in Cypriot banks could remain conveniently unrevealed and the Russian energy sector would be granted rights to oil and gas reserves recently found within Cypriot waters. Sometimes one singular event from within an entire plethora of events addressing a situation by itself defines the whole of the reality driving the events and in this case Gazprom definitely appears to be such an answering event. Hopefully, for Cyprus and its people’s sake one would hope that they find some path to resolve the demands now being foist upon them that allows Cyprus to retain their natural resources and also does not set a precedent of stealing funds from the accounts in banks, especially accounts of individual people. This situation should be treated as a learning experience by all the people in Europe, the United States and the rest of the industrialized world as it may be the precursor of things to come. After all, the Cypriot predicament threatening the people, their bank accounts, and the natural reserves of Cyprus is over less than one-hundred-billion Euros, a paltry sum when considered against the debts of many other European Union countries and definitely a miniscule sum when compared to the debts and unfunded liabilities threatening to choke the economic life of the United States. If this is the fuss over this relatively minute amount of debt, imagine the imbroglio which will result when some of these other indebted countries are called upon to settle their, by comparison, enormous indebtedness.
Beyond the Cusp