With Greece, Spain, Portugal, Italy and other struggling European countries in the spotlight so much, it’s easy for small Cyprus to be relatively ignored. Just a couple of years ago this Mediterranean island, noted for its beauty, incredible weather and wonderful lifestyle, was a top destination for tourists and expats alike.
Like Greece, Cyprus had a flourishing economy outside the euro. It wasn’t that they necessarily had a superior currency. It’s that the currency was theirs and matched the culture and economy of the culture.
In the case of Greece, a relaxed people who didn’t need very much did quite well with a currency that was weak compared to other western currencies. That might seem like a problem to some. But, for the people of Greece, it was wonderful. Such a dynamic meant that tourists could frequent their beautiful country and pay much less for entertainment than they would at home.
The same was once said of Italy. And, similarly, Cyprus once attracted visitors by the throngs. However, it’s the historical dynamic as well as its strategic location that puts even more spotlight on Cyprus, from a European perspective.
As Jeff Randall points out, there could be an argument that Cyprus isn’t really in Europe, being closer to Eurasia or the Near East. Turkey, as unpredictable as ever, sits due north of the tiny nation. As if that weren’t enough, they share the dominance of the Orthodox Church with Russia.
Presently Cyprus has unmanageable debt. Of course, being shackled to the ECB, this is no surprise at all. The number of countries under the economic thumb of Brussels that remains in the black are fewer than those in red.
Interesting, however, Russia is extending a hand of austerity of its own. In fact, it appears that they’ve offered to loan Cyprus their own fiat currency at very cheap rates.
But wait: Chinese interests are arriving too. If they’re willing to shell out about $350,000 for property in Cyprus, they are candidates for permanent residency. In other words, if you pay that much for a house, you become a citizen (subject?) of the EU, along with all the benefits.
What’ll happen? Well, for one thing, Cyprus has allowed itself to be forced into a monetary slave, just like every other country that’s bowed before the empty promises of fiscal security offered by central banks. Now it’s a matter of which route they choose to embrace in an effort to be freed.
This is another example of how an asset based currency would protect a nation from foreign invasion, even in the form of fiscal takeover. While you probably can’t influence your country to do anything different, you can strive to protect yourself by using fiat currency to your advantage. With almost all of the world’s fiat currencies dropping, precious metals are a proven way to stash real money away without fear of devaluation and further fiscal servitude.
For your prosperity,
J. Keith Johnson
The Gold Informant