12:19 – The news reports over the last couple of days have said that the Troika was requiring Cyprus to sell its gold reserves, about €400 million worth. As it turns out, they’re not requiring Cyprus to sell those reserves; they’re requiring Cyprus to transfer all its gold reserves to the ECB. In other words, the ECB is robbing Cyprus of its gold at gunpoint. Why is that, I wonder. Could it be that the eurocrats realize that Cyprus has already been pushed too far, and may well decide simply to leave the euro? If so, having those gold reserves would make it easier for Cyprus to return to a national currency. We can’t have that, can we?
Merkel and the rest of the Northern Tier eurocrats are taking an increasingly hard-line approach toward funding bailouts. They’ve announced that under no circumstances will the Troika exceed the €10 billion they have already committed to. If that’s insufficient–and it is grossly insufficient–tough luck. They’ll let Cyprus collapse, convinced that there will be no “contagion”. They’re wrong, in spades, but that’s their attitude. Meanwhile, the other weakling members of the eurozone–particularly Greece, Portugal, Spain, and Slovenia–must have a deep sense of foreboding. The so-called “unity” of the eurozone is rock-solid, unless it’s going to end up costing Germany money. In that case, Germany will tell everyone else to get screwed. As I’ve been saying for a long time, ultimately the eurozone crisis is a cat fight about who’s going to get stuck paying the bills for this abomination of a currency. Germany is determined not to be the one stuck with the bill.