V Note: Everything is fine now? Pure propaganda.
Cyprus Crisis Will Soon Blow Over
he Cyprus banking crisis that over the weekend so agitated the markets will have largely blown over by later this week.
That sanguine assessment comes from John Dessauer, who for a number of years was a multinational banker based in Europe. In recent years, he has been an investment adviser in the U.S., and he currently edits an investment-advisory service entitled John Dessauer’s Outlook.
Dessauer quickly added that his relatively cheery outlook doesn’t mean he is absolving European and Cypriot central bankers of making a major miscalculation. They are guilty of “just not getting it” in believing that a tax on Cyprus bank deposits wouldn’t risk precipitating a bank run not only in Cyprus but across the other weaker members of the European Monetary Union (EMU).
But, Dessauer continued, he has little doubt that those bankers over the weekend learned their lesson. He’s confident that they will very soon come up with some other plan that bails out weak Cyprus banks without imposing a deposit tax or some other haircut on bank deposits. Those central bankers now realize that the alternative to coming up with that solution is simply intolerable.
How soon will the European central bankers come up with their plan to resolve this crisis? By Wednesday or Thursday at the latest, and perhaps even sooner than that, Dessauer suspects. And when it does, the euro will quickly recover.
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