No. of Recommendations: 3
How is she losing her life's savings?

IIRC, (it was 6 AM and I was technically still asleep), she said something about having the bank take out money from her paycheck for a pension that she said was being wiped out. Maybe she was buying bank bonds with it. Who knows? I do remember she said she would be left with nothing.

Maybe she'll be lucky and had less than 100,000 Euros cash. That should tie her over for a few years while she finds another job. It might take a few years for Cyprus to recover its jobs. The cost of living (and the price of real estate) in Cyprus should come down pretty quickly.

I imagine that some folks will lose at least the bulk of their life savings. At the same fuzzy moment, I seem to recall Maria saying something like the losses to depositors over the 100K figure could range up to 70%. That would certainly put a dent in someone's life savings. I wonder whether Cyprus might become a retirement haven. There should be a lot of former bank employees who might be available for work as domestic servants.

If the banking industry was going to collapse anyway, it's sort of a shame that Cyprus won't be getting the benefit of a cheaper currency to boot.

I'm still wondering whether Luxembourg just might also have an "oversize banking system" for its size. My guess is that Luxembourg would get a bailout. 10 Billion is chickenfeed when it comes to rescuing banks whose big depositors have ancient European titles, rather than "dirty oligarchs" with last names ending in "ov" or "ski."

What is the real difference, though, between Luxembourg (or Lichtenstein) and Cyprus? A stupid "investment" in Greek bonds, I guess. That's why Cyprus should never have bought any Greek bonds. Although, IIRC, the Europeans had a bit of a hand in that decision. I wonder how many Spanish, Portuguese or Italian bonds are held by Luxembourg banks.

Given the volatility of the geographic region and the strategic value of a potential military base, one might think that Cyprus has more contemporary value than Luxembourg, which had a similar geographic value during the Middle Ages.

I wouldn't be surprised if Russia doesn't end up with some sort of strategic outpost in Cyprus. The Russians, after all, are the ones that the EU was targeting when it made the decision to "treat Cyprus different" than it has treated Greece, Spain, Italy, Ireland or Portugal.

AD, you're excellent at this sort of analysis. What do you think?

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