First of all, it is the Cypriot Government which has allowed this situation to come into existence. They take the decisions and they were the ones that insisted to touch deposits below €100.000, not the European bureaucrats. So Cyprus is now negotiating with the Russians, who basically own that island with their flight capital.

What this crisis has made clear is that a Eurozone wide deposit guarantee up to €100.000(guaranteed by the individual countries) is not sustainable, simply because Governments cannot back up this guarantee, when a banking crisis is nationwide. Soon to come is a reduction of that €100.000 to €30.000, like it was just some years ago. And even that €30.000 might turn out to be an unsustainable promise.

A reduction of the deposit guarantee would be extremely positive for the price of gold.