By Peter Galuszka

Straying from the Virginia plantation, I’ve been noticing how Cyprus, a small historic island nation in the Mediterranean Sea, is once again acting the tail wagging the Euro-system dog and is affecting the finances of many farflung people.

The Euro-crisis has taken hold in tiny Cyprus, forcing such draconian suggestions as a tax on all bank accounts and account closings. The uncertainty, once again, has rattled global markets and is affecting the investments of millions, including mine.

The reality of Cyprus is that much of the hot money there, according to Joe Nocera of The New York Times, is from Russia where a paucity of rule of law encourages rich Russians to park their cash elsewhere lest it be confiscated by Vladimir Putin or who knows whom else.

Cyprus has long been a jumping off place for questionable Soviet or Russian activities for decades., be they illegal arms, drugs or dollars.

Example, back in the mid 1990s, when I was an American news correspondent in Moscow, I got to travel to Izhevsk, an industrial town in the central province of Udmurtia a couple of hours by air from the capital.

Izhevsk had been closed for many years to foreign visitors because it is the home of the Kalashnikov assault rifle and other vital defense plants. The city had something like five main factories where various forms of the venerable AK were made, although plenty were made under license in countries such as China, Romania and Poland.

The day my photographer and I got there, the city was in turmoil. A high ranking police officer and most of his family, including a couple of his children who were themselves police officers, were slaughtered at his birthday party by Kalashnikov-wielding thugs who broke into his apartment.

The police official was about to launch a major crackdown on the illegal gun trade that had gotten out of control when the Soviet Union fell apart in 1991. It was an open secret in Izhevsk that factory workers were siphoning off gun parts in their lunch pails, sort of like in the Johnny Cash song about the pilfered car, “Once Piece at a Time.”

Many of the gun parts ended up, you guessed it, in Cyprus, where underground plants reassembled the AKs for sale on the world market.

We stayed in town long enough for the funeral of the police officers which was attended by 30,000 people.

Mind you, this happened almost 20 years ago. What’s sad is that this kind of sleazy dealing is still going on between Cyprus and Russia and the rest of us are affected. One can’t help put think of the euphoria that came when the Euro was adopted and how it has turned out to be a total disaster.

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7 responses to ““One Piece At a Time””

  1. DJRippert Avatar

    And which economist correctly predicted the Euro’s demise at the birth of the pan-European currency? University of Chicago economist Milton Friedman.

    Bashing the late, conservative economist has become great sport among libtards of late. Paul Krugman is just one of those engaged in that practice. Of course, it’s easy to assail dead men since they don’t fight back. Just ask Jim Carey.

  2. the gloom&doom whacky birds are in full chatter mode…for sure..

  3. Peter Galuszka Avatar
    Peter Galuszka

    I tend to se European currency unification as more of the Happy Talk from the 1980s and 1990s days of “The End of History.” It was brought on by the same neocon economists who thought offshoring was a wonderful ideas although they never asked the people whose jobs were being offshored. Advocates included both sids of the aisle, including Bill Clinton.
    Friedman may be right here after all. If the Euro is so cool, why did the Brits refuse? Why are big currencies like Germany’s beholden to the Greek’s and Cypriot’s? Having reported on Russian stuff for 10 years, including six years in country, I sure wouldn’t want them to be in charge of my money value. Many are wonderful people but they haven’t done much with capitalism. It’s still all oil, minerals and weapons — very Third World like. When’s the last time you wanted to buy a Russian-made good (other than an AK?)

  4. Peter – I see the EURO issue similar to how some issue in the US that is currently done at the state level – transitioning to a single Federal standard ….

    not without risk and failure… but also some potential

    if you go back to each country having a different currency – trade becomes dysfunctional and byzantine … like Virginia having it’s own currency. 😉

    Countries are like people – much potential for good and for bad and none without flaws ….

    I just can’t bite off the “end of civilization as we know it” – over and over and over and over from the modern-day bloggers whose daddies where the dirty bearded types on soapboxes in the parks…

    we got problems in River city – no question about it…but nirvana it ain’t and nirvana it’s never been either.

  5. The global economy is all interconnected in ways that most of us cannot imagine — until the s*** hits the fan and we figure out what happened after the fact. Cyprus… Russian hot money… eurozone crisis… It just goes to show that potential black swan events are lurking out there. We can get bushwhacked at any time!

  6. geeze.. I wouldn’t thought the Swan event with no parallel was the worldwide depression in the 30’s …. AND we came back from it!


    also little acknowledge here is the endless “whacky world is ending and Cyprus is proof “- narrative…. what happened in the US in the 1930’s and what does not happen now because of that little govt agency known as FDIC.

    Now FDIC won’t protect organized crime money in a adverse banking “event” but it does protect ordinary working men and women’s life savings – and has…successfully for 80+ years… until we let newer style banks evade FDIC regs and they did what non-FDIC banks will do – screw people.

    a bigger question is why folks would put their money in a bank that the Russian mob does and is not FDIC in the first place.

  7. re: black swans and asteroids just waiting….to whack civilization as we know it….

    I mean… yes…… but clearly the world itself befit of mankind is not exactly a risk-free tidy place….either….. I mean ..what the……

    but geeze…. looking through lens that suggest the world as we know it will end and will end because of “govt” is edging closer and closer disaster….. makes me wonder why the great depression didn’t do us in, eh?

    this kind of logic… goes something like this and I’ll use cruise ships as an example.

    Clearly.. some cruise ships have been having some trouble …. and if you apply the “anti-govt we are all doomed logic ” to the situation, CLEARLY the folks who operate the Cruise Lines are demonstrating that they are out-of-control and the Cruise Lines are headed for the day when their feckless and incompetent idiocy will end in Cruise ship Armageddon. I’m telling you it’s going to happen. mark my word nimrods.

    this is the kind of logic that is endemic on the right these days.

    this is why the right is basically unfit to govern these days in my view.

    they “project” way, way, way too much and with their overall gloom & doom orientation they end up being modern day torch and pitchfork Luddites who would, without question, drive us back to 3rd world governance in a heartbeat if they could.

    I used to have some confidence in the more moderate grown-ups in the GOP to not let the inmates take over the asylum but the sad fact is that they have and wheels are coming off.

    they have no solutions to any of our major challenges these days. Just a pathological doomsday approach where the “solution” is to kill the patient because he is “diseased”.

    One could say this is good for the Dems but that’s bad. Our system operates best when we have both Dems and GOP TRYING to go forward on what they can AGREE on and continuing to work on what they don’t.

    What we have now is “no-compromise” GOP when basically insists that in order to “fix” things they must have full and complete control of the govt because “compromise” is now a nasty and corrupt violation of their “principles”. One by one, the moderate GOP has been shown the door by the current GOP and now what we have is the most dysfunctional and toxic party since God knows when.

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