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Gold Price Jumps — Unexpectedly! — as Cyprus Tries to Halt Capital Flight

Posted on | March 27, 2013 | 8 Comments

Nothing like a debt crisis to spur a run on security, and gold prices — which had lost more than 200 points off the October peak of $1,794 an ounce — have spiked up about $30 in March, as Cyprus has become the latest tip of the Euro-debt iceberg to break the surface.

Yesterday, the “good” news was an EU official saying that deposits in other countries would be raided if necessary to bail out Cyprus. Today, the “good” news is that officials are trying to prevent a run on deposits when banks reopen Thursday in Cyprus:

Cyprus is set to restrict the flow of cash from the island and may curb the use of Cypriot credit cards abroad as it tries to avert a run on its banks after agreeing a tough rescue package with international lenders.
A Greek newspaper published details of what officials told Reuters was as yet only a draft government decree to restrict outward payments to documented imports and limit how much people could take abroad in banknotes or spend on credit cards.
With banks due to reopen on Thursday after nearly two weeks, Finance Minister Michael Sarris said capital controls would be “within the realms of reason”. But Cypriots, fearing for their savings and angered by the bailout deal struck on Monday in Brussels, are expected to besiege lenders in the morning.

This is the kind of coercive anti-market measure that desperate governments enact in an attempt to defy the maxim that capital has no nationality. Investors will put their money wherever they see the best prospect of profit and the best guarantee of security. Only governments that have wrecked their own economies ever try to limit overseas transfers.

Don’t you think people in other EU countries, seeing how officials are dealing with this Cyprus crisis, are shifting more of their assets to gold?

UPDATE: Welcome, Instapundit readers!

 


Category: Economics, Europe

Comments

8 Responses to “Gold Price Jumps — Unexpectedly! — as Cyprus Tries to Halt Capital Flight”

  1. Libertarian Advocate
    March 27th, 2013 @ 3:33 pm

    Unexpectedly. Gee, I thought that was a legacy media term used to CBB (Cover Barack’s Butt). Never expected you to use it. Certainly I would expect gold spot to spike in light of what will surely follow in Spain and Italy.

  2. Chris Wysocki
    March 27th, 2013 @ 3:40 pm

    The value of Bitcoins is going thru the roof too.

  3. DaveO
    March 27th, 2013 @ 4:25 pm

    If I didn’t believe in the thorough-going incompetence of the EU in all matters of everything, I’d believe this a cunning plan to inflate the price of gold. Wait, where’s Baldrick?

  4. Da Tech Guy's Blog » Blog Archive » Worldwide Depression Anyone?
    March 27th, 2013 @ 4:37 pm

    […] Update: Stacy McCain sees it: […]

  5. Finrod Felagund
    March 27th, 2013 @ 5:53 pm

    Stacy is a master of the ironic ‘unexpectedly’.

  6. Instapundit » Blog Archive » CYPRUS: Gold Price Jumps — Unexpectedly! — as Cyprus Tries to Halt Capital Flight….
    March 28th, 2013 @ 6:31 am

    […] CYPRUS: Gold Price Jumps — Unexpectedly! — as Cyprus Tries to Halt Capital Flight. […]

  7. docb
    March 28th, 2013 @ 8:11 am

    Silver – that’s where it’s at. Just saying.

  8. Esau's Message
    March 28th, 2013 @ 10:23 am

    Where is Mr. Potter agreeing to pay everyone 50 cents on the dollar for their deposits?