Default and Dominoes - Cypress

So Cypress has taken the less damaging option, given in to the realisation that they cant fund their own deposit insurance scheme if their banks go down.
But which other PIIGS country can? America could, they could print more money, so too the Brits but the countries bound by EU legislation cant source the QE to comprehensively guarantee their deposit insurance schemes. We dont even know if America would want to protect and cover deposit holders.
Have the EU financiers understood this? Cypriot haircuts are likely to prove highly contagious. Were it October and impending Winter in the PIIGS countries there would be certain economic terror and mayhem. Maybe the hopefulness of Spring will engender acceptance and thwart any impending run on the banks.
Otherwise the only solution is to have the ultimate guarantor of each countries deposit insurance schemes the EU itself, lest it hold any out of favour country to ransom.
This haircut to save the big financiers could easily be at the expense of the whole global economy.
As the economic policy is run by bankers, it will likely take a Grillo, to roll the austerity Monti's of the EU before any people powered economy can establish a sound and sustainable economy into the future.

Losers

To exacurbate the extremes of economic cycles is the way to loose funds for investors (buying high selling low). Our financially literate liberal party members and leaders most certainly understand this. To exacurbate the extremes of wider economic cycles is also the way to stress societies (expanding in the boom, contracting in the doom).

Inadvertently, the hard line ideals of our conservative government states is on the verge of committing all these ill conceived ideologies of policy into practise, personal investment knowledge and state policy totally schizophrenic--not aware they are side by side in mutual opposition - right hand not knowing what the left is doing. Emerging from party policy, in the blindness of politspeak, nothing learned from october 1929 and the many years of contraction that followed they are carreering into further contractive policies blighting our emerging future (generation).

Warren Buffet has prospered from counter-cyclical investment, government leaders should also be countercyclic, be trying to bring balance, to stabilise, save in the boom, support amidst doom.---or we will be the losers.

Budgets or Balance

Sure they want to balance the budget, but why be myopic and rigid. The real
job is to oversee a balanced state and a balanced state economy. That
intrinsicly means moderation. Thoughtful, well conceived changes, moderately
engaged that will bring society closer to what seems a healthy balance of all
factors - towards harmony, not jarring dissonance.
Germany has laws to allow reduction in work hours in a downturn/crisis. This
alleviates the turmoil of redundancy payments, corporate collapses, cents in
the dollar insolvencies....They provide relief amidst crisis (which pass)
then recoup after. By nurturing a stable society they can enjoy better
standards of living - reducing turmoil - destruction of value. Balancing
excesses is the secret to stability.

I have felt significant affinity for W.J.Stein and D.N.Dunlop's work for a good 25 years, most notably their efforts towards moderating and harmonising the excesses of the emerging global economy. With the Eu in the throes of a meltdown again this issue comes enormously to the fore.
We can look at the TARP as a massive supply of funds for American banks to buy up world class assets at severely stressed prices , (ie it is an economic assault, a takeover, a conquest, war but in a different sphere) based upon reckless and excessive lending (from the west), then its opposite (drawing in the noose). The massive banker bonuses post 2008 are but an indicator.
The Brits were far more brotherly about bailouts and the profits went largely to the state (BofE). Currently the EU is like a patient with severe blood loss - haemorhaging, and Mario ex Goldman Sachs cries for Austerity (read stingyness and extension of critical period-all to the profit of the cashed up). Understandably Germany does not want to tie themselves up to life support all across the EU, and it likely would still collapse, as it has been unsustainable. In an emergency ward, with such a crisis, there would be a prompt infusion of saline solution, to bring up the fluid balance to a sustainable level, where the heart and other organs are not destructively overstrained. Blood transfusions would follow and stability would ensue promptly. Such in the EU's case is to provide cash, quickly. What we are not clear of is the means of doing this?? By Stein's reckoning, it has to be moral, and it has to be brotherly. There might be many ways to bring cash into the system morally, one could to increasingly provide loans with minimal charges to all Eu citizens in proportion with the tax they have honestly paid in the last 5 years?? Another way would be to establish a communal EU fund that buys up troubled assets across any and all member states. Once again it could be placed in the control of the best investment directors (again according to taxes paid or honest communal donations given). In five years or ten these loans or funds will be able to pay back to the EU their 2012 grant. It is like joseph the dreamer and the pharoah, but in this case we dont have seven fat years to store up protection from. In its place we have hope and trust, that over the years the extended credit will be recovered and payable. Without such an initiative the gulf states and the US megabanks will plunder much of Europe's wealth and likely destroy much culture along the way.
 Further the farm subsidies are reportedly under question, and they do seem exhorbitant and likely do need moderation, but a major cut will greatly increase food prices and as in the last five years with staples unaffordable to all but the Chicago agricultural futures players consider the instabilities that ensued.The process needs maybe ten years of transition planning, ie very gradual incremental reduction to subsidies. Please forward to all others who may be in any position to influence debate or policy. Please also advise me on your views regarding the crisis and any proposals,..

Occupy WS - Credit crisis resolution - Austerity measures

The O.W.S. occupy movement writers indicate that the credit crisis is courtesy of so much wealth gone to the few. Of those few, even less give it away (as in threefold community "gift money") and no pollies dare to tax it back,..
Well that's Democracy for you.
But what would it take to fix the budgets of P.I.G.S. and USA - a commitment for austerity? -
Yes, not for the poor but austerity for the rich.