10:56 AM
alphaadvisory
LONDON(Commodity Online): Cyprus turmoil—though a
small country it may look to be; too small to be bailed out—has assumed
mammoth proportions. The news reports suggest that Cyprus Parliament
members are poised to vote on a Plan B. The moment is a defining one as
far as silver and gold futures are concerned.
The said plan may include setting up an 'investment solidarity fund' that would issue bonds on state assets to raise the 5.8bn euros required. The plan may also see the restructuring of Cyprus banking sector wherein bad assets would be pooled and good assets collated under a different head. The Parliament may also enact laws and impose stringent capital controls so that a capital flight is not seen when banks open next week.
Meanwhile, the Governing Council of the European Central Bank decided to maintain the current level of Emergency Liquidity Assistance (ELA) until Monday, for Cyprus.
Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks in the island nation.
If Cyprus Plan B fails to get a clearance in the Parliament, Cyprus will have to exit Eurozone and start printing its own currency. That would be catastrophic and may prove to be tempting for nations like Greece and who knows, Italy and Spain!
If Europe falls into turmoil, and bank runs spread in a contagion, then gold, silver prices may go up putting a space shuttle to shame.
The said plan may include setting up an 'investment solidarity fund' that would issue bonds on state assets to raise the 5.8bn euros required. The plan may also see the restructuring of Cyprus banking sector wherein bad assets would be pooled and good assets collated under a different head. The Parliament may also enact laws and impose stringent capital controls so that a capital flight is not seen when banks open next week.
Meanwhile, the Governing Council of the European Central Bank decided to maintain the current level of Emergency Liquidity Assistance (ELA) until Monday, for Cyprus.
Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks in the island nation.
If Cyprus Plan B fails to get a clearance in the Parliament, Cyprus will have to exit Eurozone and start printing its own currency. That would be catastrophic and may prove to be tempting for nations like Greece and who knows, Italy and Spain!
If Europe falls into turmoil, and bank runs spread in a contagion, then gold, silver prices may go up putting a space shuttle to shame.
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