Could Cyprus Credit Crunch Create Cash Crisis?Submitted by chris cudnoski on Sat, 03/23/2013 - 01:19
Paul Craig Roberts says that saving the 'dollar bubble' could only be done to the detriment of the stock and bond bubbles:
Now in Cyprus we see a banking solvency crisis that is resulting in a run for cash:
While ATMs in Cyprus are unable to dispense cash it is apparently still possible to use credit, debit, and other bank cards to purchase things. But it is reasonable to expect that as bank reopenings are delayed and as knowledge of the reasons behind the crisis are understood, small business owners will start asking for cash and offering cash discounts more and more?
Will this create an increase, however temporary, in the perceived value of cash over credit money?
I'm thinking that it will. Physical Euros, no matter how small they may be, no matter how paper thin, will still experience an increase in perceived value, however temporarily. Is this crisis potentially the last stand for paper money?