The monstrous proposal of stealing from the depositors in Cyprian banks by the Troika will ultimately be bullish for the Euro.  Cyprus is really a very small problem and, while, this is a bad precedent for the Troika to have set it will have both short and long term positive connotations for the Euro.  One more country fixed without having to expand the ECB’s balance sheet is another brick in the wall that will be built around those that entered into the slave compact that is the EU.

The reason the Euro has been under pressure is the fear of a breakup due to the political situation in Italy and the need to do something about both Spain and Cyprus.  Making this play now puts the Italians on the clock because they now know what could be coming next.  So, if they are serious about leaving the Euro-zone here is their opportunity to do so.

My feeling here is that the powers in Brussels already have a good idea of the outcome of forcing that moment to its crisis in Italy and because of that felt they could get away with using Cyrpus as the trial balloon for this latest version of sterilized QE.

Zerohedge posted a redux of the full situation in Cyprus from RBS which I found to be of great value.  The bottom line is that while this was a mistake in the long run it also looks like a calculated risk with good odds of succeeding.