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POPEYETHETURTLE's Photo POPEYETHETURTLE SparkPoints: (408)
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4/15/13 2:30 A

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Jeeze Louise, uh, sorry, Coach Penney. I think we are agreeing to the same thing as I am, but you just don't want to admit it.

Look closely at my previous post.

I looked up the numbers. They only have three baskets. One basket accounts for approximately 81% of their GDP and has two main eggs, services and tourism. The second basket has one egg that accounts for approximately 17%, the third basket has only one tiny egg which accounts for only 2+% of their GDP.

I agree with you. Our only difference is that I accounted for the remaining 20% of the GDP. It's just my Virgo oriented detail oriented nit-picking that made me find the last 19-20%.

I know it's as hard to believe for you as it is for me. I agree with you, 100%.

I'm going to put it on my calendar for next year. "First Anniversary of the time I agreed with CoachPenney".

"A government big enough to give everything you want is also big enough to take everything you have."
-Ronald Reagan

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COACHPENNY's Photo COACHPENNY Posts: 10,392
4/13/13 3:00 P

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Not exactly Popeye. They basically have only two baskets. And they don't have many eggs either.

There is absolutely no way for them to increase production of anything else. The population is stagnant. Like Greece, they have very little farm-able land. They can't compete with larger countries as a fishing concern. The ports are limited access. There is only so much land to invest in and limited resources to upgrade infrastructure. The IT industry has not landed there in any great capacity. Banking and Tourism....that's it.



“A word to the wise ain't necessary, it's the stupid ones who need the advice.”

Bill Cosby


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POPEYETHETURTLE's Photo POPEYETHETURTLE SparkPoints: (408)
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3/28/13 3:06 A

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As CoachPenny accurately pointed at, Cyprus literally has too many eggs in too few baskets.

The basic GDP of the country breaks down as follows:
1. Services (Tourism, financial and real estate) - 80.9% (2012 CIA est.)
2. Industry: 16.7%
3. Agriculture: 2.4%

Industry is primarily related to a maritime focus. Because Cyprus is poor in coal, oil, iron and heavy metals, in order for its Maritime Industry to continue to work at the levels it does will require "spendable' money and purchase of steel, aluminum, etc. Cyprus has been cut out of buying other currency anywhere in the world.

The small size of the country that is actually arable means that Cypress would have to come up with new technology to add more money to the GDP through Agriculture (Floating Gardens, anyone?).

Those two areas are extremely limited by natural factors, which leaves the Services sector to pull the island up by it's bootstraps. Services is primarily broken down into three areas:
1. Financial - Cypress was formerly a place for rich Russians to hide their money. However, the recent move by the Cypriot government to restrict money going out of the country to rather severe limits (by rich Russian Folks standards) and it's recent moves to tax savings accounts by up to 40% is obviously causing major jitters from citizens of other countries who have "entrusted" their savings to Cypriot banks. To say the Cypriot financial system is in a total mess is equivalent to saying the United States cannot continue printing paper money backed by nothing more than a handshake and a wink. Finally, one of the two major banks on Cypriot had their portfolios heavily invested in Greek currency (oops).
2. Tourism - Tourism has long been a mainstay of the Cypriot economy. However, with the financial crisis, tourism dollars have dropped as tourists have been less inclined to schedule a vacation (Holiday to our European readers) to some place where they are not sure how much their own countries currency will vary.
3. The third and final leg of the services sector was it's real estate. It was easy for someone with a hard currency to buy a vacation mansion because of the strength of their currency as compared to the value of the Euro after the Greek collapse. Even though other foreign currency is now even stronger, building a new, plush residence in a country that may be going as belly up as Greece is a major put-off to buyers.


BTW: So-called Right Wing Nuts will probably refrain from comparing our economy to that of Greece or Cyrus unless the United States dollar quits being used as the Worlds Reserve Currency, or if the Credit Rating of our country is again down-graded.

I don't know what anyone else is doing, but I have started to buy some hard metals (gold & silver) when my Treasury Notes and Bonds mature. Our country is now printing paper dollars faster than Monopoly money is being printed. That is scary to me and I think it should be scary to anyone who has even a hint about the "value" of money.

Looking back on history, the phrase, "Not worth a Continental", seems to rise more and more often.

"A government big enough to give everything you want is also big enough to take everything you have."
-Ronald Reagan

Co-Founder, Dealing with Depression; www.sparkpeople.com/myspark/groups_individual.asp?gid=953

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COACHPENNY's Photo COACHPENNY Posts: 10,392
3/27/13 7:02 P

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Cyprus is an island nation near Greece and Turkey. The island is more than just a tax haven for wealthy Russians. Real people live there and their economy is driven by banking and by tourism. As pointed out in the article excerpt below, the banks have failed.

Economist, Paul Krugman opines on a way out for Cyprus.......

"A correspondent whom I respect has (gently) challenged me to say plainly what I think Cyprus should do — leaving aside all questions about political realism. And he’s right: while I think it’s OK to spend most of my time on this blog working within the limits of the politically possible, and relying on a combination of reason and ridicule to push out those limits over time, once in a while I should just flatly state what I would do if given a chance.

So here it is: yes, Cyprus should leave the euro. Now.

The reason is straightforward: staying in the euro means an incredibly severe depression, which will last for many years while Cyprus tries to build a new export sector. Leaving the euro, and letting the new currency fall sharply, would greatly accelerate that rebuilding.

If you look at Cyprus’s trade profile, you see just how much damage the country is about to sustain. This is a highly open economy with just two major exports, banking services and tourism — and one of them just disappeared. This would lead to a severe slump on its own. On top of that, the troika is demanding major new austerity, even though the country supposedly has rough primary (non-interest) budget balance. I wouldn’t be surprised to see a 20 percent fall in real GDP.

What’s the path forward? Cyprus needs to have a tourist boom, plus a rapid growth of other exports — my guess would be agriculture as a driver, although I don’t know much about it. The obvious way to get there is through a large devaluation; yes, in the end this probably does come down to cheap deals that attract lots of British package tours.

Getting to the same point by cutting nominal wages would take much longer and inflict much more human and economic damage."

krugman.blogs.nytimes.com/2013/03/26
/c
yprus-seriously/




“A word to the wise ain't necessary, it's the stupid ones who need the advice.”

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4EVRYOUNG Posts: 5,174
3/27/13 5:16 P

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I wonder how long it will be before the right-wing extremist accuse Obama of following in Cypress' footsteps by making a "money grab?"

Val

"If you always do what you've always done, you'll always get what you've always got!
BRIDIE5 Posts: 8,121
3/27/13 4:17 P

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Bounty on bankers..


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4EVRYOUNG Posts: 5,174
3/27/13 11:00 A

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Don't worry. The won't sit by idly and watch their money being snatched right out of there hands. It ma not happen today or tomorrow but someone is going to pay for it. Either with their lives or destroying them personally and financially(if their lucky.)

Val

"If you always do what you've always done, you'll always get what you've always got!
MYREALANA's Photo MYREALANA SparkPoints: (0)
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3/27/13 10:25 A

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www.washingtonpost.com/business/cypr
us
-readies-capital-controls-ahead-of-bR>anks-reopening-to-prevent-run/2013/0
3/
27/759ae474-96d0-11e2-a976-7eb90
6f9ed9
b_story.html


I still couldn't even find Cyprus on a map, but it sure is in the news a lot lately.

Before the financial crisis, the country tried to become the Caymen Islands of Europe to people like the Russian mafia. Then they took those huge cash deposits and invested them in Greece.

Oops.

They need a bailout, and the EU and IMF are requiring (quite reasonably, I think) that the country provide some kind of collataral - about 6 Billion Euros worth. So, now they're just taking the money from those Russian gangsters' bank accounts.

How do you kneecap a country?

--Myrea

"If you can't do something smart, do something right." --
Shepherd Book


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