After four days into a national bank holiday in Cyprus, the need for cash in business transactions has become so tight, that on March 20, it is being reported that retailers and customers are resorting to barter as their inability to access cash and credit has almost completely frozen the nation’s economic system.
Bloomberg Onsite Reporter: Well there is definitely a cash crunch, and I’ll give you one example. I’ve been hoarding my cash, and for the first time today, I busted it out to buy some sandwiches at a sandwich shop. I gave the guy 20 euros, and he gave me back 15 (euros)… and he didn’t have any change, so he gave me two Kit-Kat bars. – Bloomberg
The country of Cyprus has been under a bank holiday, and complete freezing of customer assets since Saturday, with the government reporting that banks will not be re-opening until at least next Tuesday, some six days away. This means the liquidity crisis for citizens and businesses will only get worse, with the potential for runs on merchandise, expanded barter, and black market selling increasing each day the flow of money remains halted.
Bitcoin expansion moves to Spain as confidence in the Euro continues to fail (Photos) Spain is the latest country to join the ranks of a citizenry looking towards an alternative currency to the Euro, and ECB control over a failing banking system in Europe. On March 20, downloads of three of the most popular Bitcoin applications which allow currency transactions to take place in the digital realm have increased, helping to drive the electronic currency up 15% in just the past two days.
Since Sunday, a trio of Bitcoin apps have soared up Spain’s download charts, coinciding with news that cash-strapped Cyprus was planning to raid domestic savings accounts to pay off a $13 billion bailout tab. Fearing contagion on the other end of the Mediterranean, some Spaniards are apparently looking for cover in an experimental digital currency.
The value of the virtual currency has soared nearly 15 percent in the last two days, according to the most-recent pricing data. “One hundred percent of that is due to Cyprus,” says Colas. “It means the Europeans are getting involved.” – Bloomberg
US Begins Regulating BitCoin, Will Apply “Money Laundering” Rules To Virtual Transactions Last November, in an act of sheer monetary desperation, the ECB issued an exhaustive, and quite ridiculous, pamphlet titled “Virtual Currency Schemes” in which it mocked and warned about the “ponziness” of such electronic currencies as BitCoin. Why a central bank would stoop so “low” to even acknowledge what no “self-respecting” (sic) PhD-clad economist would even discuss, drunk and slurring, at cocktail parties, remains a mystery to this day. However, that it did so over fears the official artificial currency of the insolvent continent, the EUR, may be becoming even more “ponzi” than the BitCoins the ECB was warning about, was clear to everyone involved who saw right through the cheap propaganda attempt. Feel free to ask any Cypriot if they would now rather have their money in locked up Euros, or in “ponzi” yet freely transferable, unregulated BitCoins.
For the answer, we present the chart showing the price of BitCoin in EUR terms since the issuance of the ECB’s paper:
As a historian in his primary field of study, and an investor in the real world, Kenneth has a keen perspective on all facets of the financial world. He has owned his own business and corporation, and has been an investor in many different markets such as securities, real estate, currency trading, and international trusts. His desire is to provide you with the true understanding of markets and the economy, and to give you the information that will help you make your own decisions in these troubling, and quite often, fascinating times regarding your economic decisions. Kenneth is not a certified financial advisor, and his only goal is to give you true information, by which you can see things as they happen, and in many cases, before they happen