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An Interesting Bailout in the Offing
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There is a sideshow going on in Europe this week. All eyes are on the Spanish bank bailout, but there is another bailout in the works – Cyprus. I believe that a Cyprus deal will be agreed to within days. The question in my mind is, “Who is going to put up the money?”
Let me first say that the problems in Cyprus are very small compared to Spain. If it were not for the fact that the rest of Southern Europe is on fire, Cyprus would get a very nice deal from its “friends” in Brussels. I think the country needs about Euro5B to shore ups its banks, another E20B for the Treasury. Chump change these days.
I have written about Cyprus and the 2011 military base explosion that brought the country to its knees (Link, Link) . It’s an interesting story with an interesting outcome. The Russians bailed out Cyprus with a Euro 3b loan.
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Why would the Russians be willing to bailout a country who is a member of the EU and whose currency is the Euro? Three reasons:
(I) - Naval bases/basing rights. The Russians would love to have a deep water port in one of the more strategic areas of the world:
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(II) - Energy. There is a very good chance that there is a large supply of natural gas in Cyprus’s territorial waters.
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(III) - Money. Russians have been using Cyprus as an offshore banking center for years. If Cyprus’s banks are in trouble, then some of that money is at risk.
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There are many parties who have an interest in what happens in Cyprus. This includes the usual list of bankers, technocrats from Brussels and IMF types. But Cyprus has some other folks who might have a say in the outcome of this, including:
- NATO.
- The US military
- The CIA
The very last thing that this group wants is to see is that the Russians get further involved in the domestic affairs of Cyprus.
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In the crazy world of sovereign bailouts, we may find Cyprus in a unique position. There may be competition for who provides the bailout cash. If one was a Cypriot, and faced with the need to go hat in hand for help, which way would they go?
To Brussels. Where the needed money will be made available (it already has been agreed to) but the terms will conform to the other EU bailouts. Cyprus will have to accept the austerity that comes with these deals and “supervision” from the North. There will be strings attached, and this money is not cheap.
To Russia. Where the terms could be more attractive. Few strings. Cheap money. (Russia has oodles of Euro reserves earning nothing.) The quid pro quo would be to allow Russians to base vessels. The “upside” for Cyprus would be that their new friends in the East would also provide the money and resources to exploit that gas field (in exchange for a big rake of the profits).
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I have to believe that the game of chess I describe is happening at one level or another as I write. Cyprus is strategically too important. My guess is that the deciders in Brussels (and D.C.) will try to keep the Russians out, and keep Cyprus in the EU fold. This would suggest that Cyprus is offered a deal that strays from that offered to Spain. It would have to be far superior to that offered to nearby Greece.
Should a “sweet deal” be in the offing for little old Cyprus, it would throw the whole ball of wax into the fire. The people in Ireland, Portugal, Greece and Spain would hit the streets.
I close this with a section of my September 2011 report on Cyprus. If you think that the CIA is not involved with Cyprus in June of 2012, you’re wrong.
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.A man believed to be one of Russia's most capable agents, arrested in Cyprus this week as a suspect in the spy ring, has almost certainly fled the island, the justice minister, Loucas Louca, said.
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Less than 72 hours after he was last seen on Cyprus, speculation is mounting that Christopher Metsos, the alleged paymaster of a Russian network operating under deep cover in the US, was allowed to "disappear" by a government which caved in to pressure from Russia.
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Note: There is nothing new or unusual about big powers and their interests in deep water ports. The USA Navy is doing its damnedest to get back into Vietnam.
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" don't understand why the Prez is wussing out here. Even Rick Perry said it should be done during primaries."
Good Lord!, First, just because the Prez doesn't go neocon nuts against Iran or Syria is actually a good thing and if you are a veteran you should be the first to understand this. Second, you use Rick Perry comments to bolster your point? Shouldn't that have given you a major fucking clue that you were on the wrong track?! US strategy is simply to play the regional powers against one another - China - India, Russia - Germany, etc. Syria is a pawn and the US can sustain instability in that region without direct intervention. Finally, the last time the US was even close to being neutral was prior to WWI; read your history. You may be a vet but you're not giving the rest of us a good name with bonehead comments like this.
"That puts the USA in its historical role of "neutral."" With that you sir, have crossed the line into full blown irrelevant retard. Could you change to a more distinctive avatar so it would be easier to scroll past your comments?
USA in its historic role of neutral....lol, priceless!
Hilary runs the State Department like an arm of the Pentagon, just advance cheerleading for the next war. But Syria may have them stumped. Giant stock of chemical weapons, real ones this time. Not that they give a shit, but the headlines could be ugly: "1000's gassed as NATO airstrikes unleash chemical cloud on villagers". Obomba doesn't want yet another war before the election or he risks alienating even more of his base, besides he can just sit back in his God chair and let the drones do the murdering for him.
So I don't think it's boots on the ground or NATO jets in the skies, not yet. Besides Syria hasn't even threatened to sell oil for euros yet...have they?
Thankfully, Hillary is on it.
US: Russia sending Syria attack helicopters
Bibi's willing to lend her a helping hand, warns of Syria's chemical weapons. http://www.israelnationalnews.com/News/News.aspx/156755
Now, where and in what context have we heard the WMD rhetoric before...?
I had almost forgotten that it was Bill Clinton talking about Iraq's WMD's way before little Bushy and his boys grabbed ahold of it.
Why do you think that was not mentioned much during the Bush years?
Wonder who's going to draw the short straw and have to present a "dog and pony show" to the UN General Assembly, convincing the civilized world that Syria presents an immediate threat which needs to be decisively dealt with.
Hillary holding up a vial of talcum or 8x10 photos of poisoned children?
Herr Bismarck would be proud.
Plus Cyprus, with its pending bail-out, is about to take over the Presidency of the European Union a few days from now, on 1 July, for the six-month term that follows.
And it is a society quite closely tied to Greece with more than just the common language to share ... very important given the current Eurozone debacle ...
Plus Cyprus has a Communist Party President ...
Was talking with a Cypriot about him, and she said, 'Oh yes, he's a Communist ... but he's a Communist who likes money!'
Ha!
As Americans say, it will be a 'GREAT' second half of the year. Ha!
Didn't Turkey already say that they wouldn't negotiate with Cyprus as President ?
Wow, US military port in VN? Does anyone in ZH land have links other than the usual google results? I would love to read a lot more about any of these developments.
Regards,
Stuart
Son, they're takin' a look see at Cam Rhan Bay, which the US Navy developed during the Vietnam War and the Soviets used for many years thereafter.
More like LBJ and his cronies like Brown and Root aka Halliburton. LBJ whacked JFK because the money he could make (and did - as did his friends) on Vietnam was astronomical. LBJ had a major piece of everything in Vietnam and SE Asia.
Also the Kennedys were inching towards dumping LBJ or grabbing him by the throat for all the very dirty things LBJ did in Texas. LBJ was not going to be on the ticket in any reelection. Papa Joe Kennedy needed Texas in 1960 and WV and Chicago. He made deals with LBJ and the mob then reneg'ed on those deal. The Kennedys double crossed too many people.
LBJ and his cronies in Texas made the mob look like altar boys.
Today John Kerry and his clan are getting rich of Vietnam.
Here ya go...
http://www.genewscenter.com/Press-Releases/First-Wind-Farm-in-Vietnam-s-...
The Cyprus situation has many different facets and Bruce is spot on especially if you do a little research regarding one of the most favored US allies. Gas and oil do come to the forefront.
Asia Times Online out of Hong Kong, has quite good coverage of Vietnam and much of the world. Some very independent views from several sides.
Really a must-read news site.
Here's their US-Vietnam story from yesterday - relevant to Bruce's article above -
'US, Vietnam inch closer together' by Lien Hoang
http://www.atimes.com/atimes/Southeast_Asia/NF12Ae01.html
Vietnam is more scared of what China might do in the future than what America did in the past.
Vietnam does not expect to fight the US again, even though they did in the past. Vietnam might expect to fight China again in the future, just as they have done in the past.
Out of differences of opinion over, among other things, the Spratlys, SEAsia is trying to draw closer to the US just as it grows more fearful of the new regional bully China.
It's just a short drive for the Chinese army...
I heard about it on NPR last week: http://www.npr.org/templates/story/story.php?storyId=154235037
O/T: just saw a pop-up on taking a survey regarding Zero Hedge: Tyler, is this legit?
In the spirit of Andy Grove, "Only the paranoid survive."
Speaking of O/T, Bruce Krasting was linked early this week by the widely-read Jim Kunstler of 'Clusterf*ck Nation'
Not a really good article ...but it does mention BK favourably
Kunstler is a bit of a one-horse pony show with his theme that our advanced civilisation is going to collapse to more contracted, sustainable, local framework ... that we will soon face the 'Long Emergency' where the US-type culture of a well-stocked Wal-Mart and 'happy motoring as collapsed' ... and he is getting repetitive, tho his doomer perspective has some wisdom in it
Here's the piece mentioning BK -
http://kunstler.com/blog/2012/06/cloacal-finance.html
"...Kunstler is a bit of a one-horse pony show."
Not to mention his raving lunacy against the Palestinians.
Not to mention he's just a raving lunatic period...they're everywhere though these days.
He's a statist quack.
Kunstler's the "Peak Oil" Jew who wants all the dangerous Whites out of the suburbs and living in urban high-rise ghettos where they can be more easily controlled by ZOG. Kunstler, meanwhile, lives on an extremely rural farm.
In Finland, i hear there's a facebook invitation to protest against ESM and bailouts in general. Thursday in front of parliament. VERY unusual in Finland. People getting really tired of the EUSSR and the insane chasing after dead political utopia called euro. GO FINNS!!!
WTF? Is bailing out an Olympic event?