Over the weekend Cyprus decided to “tax” savings accounts about 10% to avert bank failures. What they’re really saying is they plan to shamelessly steal money from savings accounts to transfer to corrupt banks. Of course, they said in return for their theft, they will give savers shares in bankrupt banks. That sounds fair doesn’t it? Stocks in Asia fell sharply on the news, closing down 1.8%. In Europe, stocks dropped just slightly as hope surfaced for an alternative. U.S. stock dropped 0.8% on low volume. VXO soared nearly 16% to close at 12.69.
Tuesday, stocks in Asia rose just slightly. Here’s a good article on the Cyprus mess. Here’s a particularly concise and insightful excerpt:
It also reinforces our long-held views that when push comes to shove policymakers (the State) will escalate oppressive tactics against their electorate in a bid to maintain their status quo and that of their fiat currency system.
In Europe, stocks closed down 0.4% and in the U.S. 0.3% on low volume as the Cypriot parliament rejected the idea of stealing from savers. The VXO ramped up another nearly 6% to close at 13.43. Wednesday, stocks in Asia fell just slightly, while in Europe, they gained 0.3%. The FOMC meeting and press conference cheered stock investors in the U.S. As a result, they rose 0.7% on low volume. The VXO tumbled over 10%. The Senate also passed a bill that likely will keep the government funded through September at the previously agreed lower level specified by the sequester.
Thursday, stocks rose in Asia 0.5%, but they fell 0.7% in Europe and 0.8% in the U.S. on low volume, erasing the FOMC pop of yesterday. The VXO shot up 15% to close at 13.85 and precious metals and miners rose about 2%. The fate of zombie banks in Cyprus, and downbeat earnings surprises fuelled the fears. Friday, stocks fell in Asia, following the previous day’s action in the West. In Europe, they drifted slightly lower while in the U.S. they rose about 0.5% on low volume. VXO dropped nearly 4% to close out the week at 13.49.
While stocks had their ups and downs this week, the weekly change was little. Ditto for precious metals. In contrast, the VXO shot up over 22% for the week.