EUROBLOWN: Why today’s mysteries will be tomorrow’s mass tragedies

The Slog -

From a strong euro to a Bank of Cyprus failure,
from Greek debtor prisons to gold
somersaults, very little in 2013 is really a mystery.

Oleg Deripaska, that good friend of Lord Fondlebum and all-round keen metals negotiator, declares himself puzzled today at the level of the euro. “Why is it so high?” he wonders with feigned innocence, “it is holding back the European recovery”.

It’s not hard to hold back a dead horse, but it is very easy to increase the ‘value’ of a dead currency: you simply buy a lot of it. This is precisely what Mario Draghi is doing, because he has no other option: if he lets the eurine float naturally, it will head for the sewer. And that in turn will mean the current flight from eurozone investment will turn into a Calgary stampede.

We are, by the way, still waiting for the ECB’s website to give us a clue on how much investment has stayed in the eurozone, but Banco Draghi has no intention of doing that any time soon.

This much may be a mystery to some, but it is not to most people. Nor is it to Deripaska, but I don’t have the time or inclination to analyse his motives. Far more telling is to observe other mysteries and foretell what they might mean.

I was yesterday handed a confidential document – an independent report on why the Bank of Cyprus was until the end of 2009 selling Greek bonds as if they were radioactive excrement, but then abruptly changed course and began buying them in huge amounts.

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