Skip to comments.Anxious Greeks Emptying Their Bank Accounts
Posted on 12/06/2011 9:57:51 AM PST by kcvl
Many Greeks are draining their savings accounts because they are out of work, face rising taxes or are afraid the country will be forced to leave the euro zone. By withdrawing money, they are forcing banks to scale back their lending -- and are inadvertently making the recession even worse.
Georgios Provopoulos, the governor of the central bank of Greece, is a man of statistics, and they speak a clear language. "In September and October, savings and time deposits fell by a further 13 to 14 billion euros. In the first 10 days of November the decline continued on a large scale," he recently told the economic affairs committee of the Greek parliament.
With disarming honesty, the central banker explained to the lawmakers why the Greek economy isn't managing to recover from a recession that has gone on for three years now: "Our banking system lacks the scope to finance growth."
He means that the outflow of funds from Greek bank accounts has been accelerating rapidly. At the start of 2010, savings and time deposits held by private households in Greece totalled 237.7 billion -- by the end of 2011, they had fallen by 49 billion. Since then, the decline has been gaining momentum. Savings fell by a further 5.4 billion in September and by an estimated 8.5 billion in October -- the biggest monthly outflow of funds since the start of the debt crisis in late 2009.
The raid on bank accounts stems from deep uncertainty in Greek households which culminated in early November during the political turmoil that followed the announcement by then-Prime Minister Georgios Papandreou of a referendum on the second Greek bailout package.
(Excerpt) Read more at spiegel.de ...
A slow motion bank run, with out the hype. The results will be the same of course, empty banks at some point will not be able to barrow on deposits, GAME OVER!!!
Ah, the withdrawl of ones own money is listed as “the raid on the banks.” There’s no end to the sense of entitlement in a fascist pig.
I can’t say I blame them for wanting to take out their cash, but this is NOT a good thing and will only compound their problems.
We'll never save that old Parthenon and Loan!
Maybe, but so would a bank holiday, ala Argentina. Frankly, they’re up a creek either way. So are we, actually.
It may compound the problems of the MANY, but at least each individual will have THEIR cash. I guess in socialist countries, I guess that collective good concept only goes so far.
Why would anyone keep their money in a bank when failure of the entire system is inevitable? Unfortunately, this is coming to a neighborhood near all of us. Our congress is certainly whistling past the graveyard.
They are trying to withdraw it before the government and the EU steal it; however, it’s too late and they are toast!
If it can get worse, the Greeks will find a way to do it.
They are either
A) Spending their savings on paycheck-to-paycheck items
B) Converting their euro’s to something they can later trade with, i.e. gold, US bonds, etc.
You take your euros out of the bank and hold them. When they go back to the drachma your money in the bank is devalued, where you can still hold the stronger euro (relatively speaking.). I would buy gold or silver or dollars. Of curse dollars ain’t going to be worth much down the road later.
In one article I believe I read last week on Free Republic, an economist said that Europe has about ten days left. It’s a short enough time span for me to wait and watch. ;-)
There is a lesson to be learned in all this. That is, get your money out while the gettin is good. Obammy and Co will certainly try to take our assets and 401ks when SS runs out and grandma doesnt have her monthly check.
one euro in the hand today may be worth 1 millon drachma in the bush next year
They might also fear a trick the Mexican govt pulled on their people in the '70s. They seized all their citizens' US dollar bank accounts and converted them to pesos at the prevailing rate. Next they devalued the peso 1,000 to 1, then told the account holders they could convert back to US dollars. Small wonder the Mexicans to this day, prefer to deal keep little money in the banks.
So . . . I half expect the Greeks to do the same with a Euro/Drachma conversion.
I agree with everything you just said. Way to go!
Yeah. Instant gratification, in a perverse sense.
How can you totally escape a national sales tax, national property tax, etc. Even if you have gold bars in your private safe, we could still be screwed. Scares the —— out of me.
The Greek Socialist have run out of other people’s money. It’s time for them to stand on their own two feet.
Even for a greek story, a drachma in the bush sounds as filthy as a _______ in the bush.
I was thinking the same thing...Clinton has probably had a drachma in the bush.
"By withdrawing money, they are forcing banks to scale back their lending -- and are inadvertently making the recession even worse"
In other words, you need to save and invest money to grow the economy, not spend it!
Imagine that, unemployeed Greeks are having to drain their savings to feed their families. Somehow, they’re now the bad guys.
Well, thank you. Just realized that I mangled one of those sentences though.
“Miranda,Miranda dontchya know me?”
not if the leftards in charge here have any say:
US to backdoor Euro bailout through new IMF credit facility
US ($) to Play Very Major Role In Helping Europe: Geithner
so in addition to doling out monopoly money to save failed US gubmint union pensions,we get to dole it out to failed Youra-peein gubmint union pensions.
Or what is a vacation resort area with a little agriculture really worth?
I found this on Zero Hedge. An excellent summary of the insane European Debt crisis in a short presentation with charts.
Economic Minute Presentation on the European Financial Crisis - Low GDP Growth, Staggering Debt, Geithner On The Prowl In Europe!
FinancialSense.com had a powerful interview on 12/01/11 with Ann Barnhardt, who recently returned all her clients money and closed her commodity brokerage firm, Barnhardt Capital Management, after the MF Global collapse. In no uncertain terms that's what she said everyone had better start doing in America. She says the whole system of markets, law, government, judicial system, etc. has become totally lawless and corrupt. It's an unnerving interview, and I don't get shook easily. It has me rethinking what I need to do and how quickly I need to do it.
BTW, our Fed/Treasury are pouring money into bonds in Europe. Europe won’t win any currency war against us. The dollar will fall. Also, much of the “news” about China is globalist propaganda. The countries with manufacturing and access to resources will do well. Countries that are net exporters of resources like oil will do even better.
We’re really worse off than Europe, and many of us don’t know it, yet.
Time to open a couple of Bank of America’s there.
Are we not exporting refined Gasoline???
Those are both good points.
A run on the banks so big that the government can’t stop it. THIS has been the nightmare scenario ever since the 1930s. It was one of those things that nagged at me... what if so many people did it the government ran out of money. That was a joke at the time. It ain’t a joke now.
At any rate, there’s an easy way to solve this. Nationalize the banks and issue an edict prohibiting the dissolution of the account.
“Nationalize the banks and issue an edict prohibiting the dissolution of the account.”
That IS a nightmare scenario.
Right. Because any politician that mentions it is called “extremist.” We have lots and lots of problems but the biggest one is the thinking that we won’t hit the wall. The leftists are in blissful denial that there are any boundaries - because they don’t believe us. They don’t care what we say, they simply don’t believe us.
There has to be away to stop this bailout.
>>Even for a greek story, a drachma in the bush sounds as filthy as a _______ in the bush.<<
Do it the Greek way, come from behind...
Not sure you grasp the severity. Yes, it’s their money. Problem is, a run on banks means “their” money isn’t there to withdraw. Only a tiny fraction of deposits is kept on hand as cash.
It’s kinda like thinking “I can go to the store to buy groceries any time” - except when EVERYONE does at the same time, and most find only empty shelves.
Yeah, I’ve been eyeing that “ten days” prediction for, hey, it’s almost ten days!
I not only understand the problem, I also understand the solution.
“Its kinda like thinking I can go to the store to buy groceries any time - except when EVERYONE does at the same time, and most find only empty shelves.”
The smart thing to do is make sure you have food before everyone else goes running for it. Exactly what the intelligent Greeks are doing in this situation, getting out before they become victims. The problem with financial musical chairs, is that just like real musical chairs, when the music stops someone’s out of luck. If people don’t move to get their money out, and now, they’ll all be left without the figurative seat, but the seats are diminishing whether they decide to take one or not.
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