Gold Magazine January - February 2014, Issue 34 | Page 59

investment

est Cypriot banks – Bank of Cyprus and
Laiki Bank – gorged on Greek government bonds. Then Greece’s sovereign
debt crisis crushed the bonds. The Cypriot banks lost their capital. The Cyprus
government couldn’t afford to bail them
out. And the EU wouldn’t, probably
because so much of the cash was owed
to non-EU Russians who used the banks
as their offshore haven for years. Eventually, as a condition of the €10-billion
bailout, the Cypriot government agreed
to a haircut of bank deposits exceeding
€100,000. In addition, the government
imposed capital controls to keep money
from leaving the country.”
However, what really grabbed Doug Casey’s attention, says Giambruno, “was the
Cyprus stock market, which bottomed
out at 98% below its high… To Doug,
the crash sounded like “a bell ringing at
the bottom of the market.” He quotes
Casey as saying, “I suspect that there are
some very viable businesses available – companies selling for a tiny fraction of book
value. I think fortunes could be made…”
The types of company that Casey and
Giambruno are talking about are what
they call “the survivors of train wrecks:
fundamentally sound companies beaten
down by shell-shocked markets. These
are the screaming bargains we’re looking
for. They’re not rare, but you don’t see
them every day either. And the rewards
c