posted on Mar, 24 2013 @ 12:07 PM
There sure had been a lot of bad press, blogs and accusations against the rather derogatorically named 'Troika' of funder nations -EU, ECB and IMF,
whom are only seeking to stabalize economies.
The troika had NOT demanded or dictated to Cyprus to rob bank depositors of their money. The Troika only request that Cyprus puts up at least $6
billion as its responsibility to ensure that the rest of the nations whom had not govern Cyprus will put up the balance $10 billion to save the
It was Cyprus bankers and govt - the elected representatives of the Cyprian People, whom had failed in its duty to depositors and regulatory oversight
and led to the disasters happening in Cyprus today.
Yet EU, ECB and IMF who do not rule Cyprus were blamed and slimed. The troika had long warned Cyprus of its banking shortcommings and regulatory
controls, and yet were ignored. Although handbooks and manuals on better banking practices, seminars had been held by the troika, unfortunately, it
was ignored by Cyprus, who enjoyed the gravy train of HOT money into its shores.
The Cyprus govt claims the HOT money raised its economy and created more jobs.
The truth and reality of HOT money in vast quantities into the economy is that:-
a.) Bankers are obliged to give returns on savings, and thus have to take BIGGER risks to get those returns, as Cyprus is only a small nation, and
worse, without resources and industry to justify that kind of returns possible. They took to gambling funds on the INTERNATIONAL MARKETS......and LOST
Those banks are now....empty. Through their own doing and mismanagement.
b.) Some foolish cypriots and the banking sycophants claimed that HOT money raise their standard of living. Thing is, vast sums were spent on
construction of housing projects instead of manufacturing/services and its management.
Property speculation is the easiest form of getting returns as one just buys a few houses, rent it out to get residual income monthly, then sell it
away at a profit a year or 2 down to the road, as population increases will cause demand.
But unfortunately, it artificially rises the cost of construction, the cost of properties and rentals. They young seeking to start a family will no
longer be able to keep up with such costs, as one HOT money investors does not buy one property, but many.
Extrapoliate to the huge $28Billion to $40 billion dropped onto the small country, inflation shoots up the roof, as hot money circulates way too fast
and loose with the economy.
And when the HOT money is lost in the stock markets, so too the mortgages, just like a rug pulled off one's feet. Disaster looms as the tap runs dry,
affecting not only the HOT money investors, but local enterprises that had lived off such fats for long and enjoyed those wealth and benefits it
brought while other nations in the world undertook painful measures for bank reforms and rebuilding of their economies.
EU, ECB and IMF can just simply walk away and let the banks and Cyprus fall. Why the hassle and get the blame? But it did not and egalitarianly tried
to help, and even managed to convince the Cyprus govt to find other ways to not take the money from the common masses, but only the rich if this is
the way Cyprus wants to put up that 'responsiblity fund' of $6 billion.
The troika can easily fund the entire rescue, but to if they do so, the Cyprus govt, bankers and cypriots will NEVER learn their lesson, and will only
continue to pay lip service to EU as it rages on uncontrollerably to invite more HOT money into its shores with no questions asked, which will only
lurch from one looming disaster to another.
Our world is more aware of the disaster that HOT money brings, from the source to the host nation, had experienced it and learnt from it. HOT money
are not investments, but are only get rich quick schemes hidden away, by the greedy, corrupted, and selfish few.
May more of our fellow human brothers and sisters in Cyprus be aware and be informed to make rational decisions, and not rash and irrational responses
that are often manipulated by others.