Skip to comments.Greece Said To Prepare "Grexit", Drachma, Bank Nationalization Plans
Posted on 04/04/2015 12:47:25 AM PDT by Crapolla
On Thursday morning, we took an in-depth look at what the progression of events is likely to be in the event a cash-strapped, negotiation-weary Greece finally, for lack of will or for lack of options, fails to scrape together enough cash to pay its creditors.
As BofAML notes, a missed IMF payment and/or failure to make interest payments to either the ECB or private creditors over the coming weeks would likely lead to default within 30 days, at which point "mark-to-fantasy" becomes mark-to-market and then "mark-to-default" in very short order.
Although Greek officials came out midday with a categorical denial of reports that the country was set to run completely out of cash in just 7 days, it now appears Athens may be prepared to chance a missed IMF payment and all that comes with it if it means saving face and preserving Syrizas campaign promises to the beleaguered Greek populace.
(Excerpt) Read more at zerohedge.com ...
Can’t squeeze blood out of a rock.
This whole soap opera has gone on for too long. They lied to get into the EU in the first place. Time to go back to where they were.
Phrased very well; I agree and my gut feeling for the past five years was that this was a foregone conclusion eventually. Look for Portugal, Spain & eventually Italy to follow eventually. Kudos to the British, Danish, Swedes, Czechs, etc. for having the wisdom to hang on to their own currency.
And the Poles kept their zlotys... Soon we will see more street rioting, bank window smashing, etc from the Greeks who want the lucrative pensions to continue.
One thing that the Russians do right, in my opinion, is to grow much of their own food. The ability to do that is going to become very important in the future I think.
The Greeks have olives to live on. Have you seen the Huckabee ad for survival food? I think that is pretty funny as I cant imagine Mike Huckabee surviving on those MRE type packets..
new world order engineering
Everybody lied at the time.
The rest of the EU is just as dirty here.
Actually this is great news for someone from America who wants a fantastic vacation in the islands.Prices will go down and everything that God made will remain the same.
The Greek only has to convert the local currency into gold from time to time to protect himself.
Besides, this isn't 2011. European banks have learned their lesson and extensively restructured their banking system so a Greek exit will have essentially no effect on the rest of the Eurozone.
My wife and I vacation in Europe every couple of years and visit various countries. For us, the EU is great. Only one currency and no border checks once we’ve entered. We walked from Portugal to Spain and the only way we could tell we were in another country was the changed spelling on the signs. Not sure how well it works for Europeans, though...
I keep them on the sailboat though. It is great to have some of them around when you need them. It’s probably a good idea for many different situations.
All banks will eventually do something of the sort.
I believe that you are correct. I suspect that most of the outstanding loans to Greece have also been purchased by the ECB or have already had loss reserves allocated to them in some manner. And if necessary, there will be a flood of liquidity to prevent the markets from seizing up.
Old joke from the Cold War days....
The Poles have the highest form of Communism....a three class society...
Those with dollars
Those with Zloty
and the remainder with neither.
Greek citizens better get their life savings into gold, dollar accounts, physical euro currency in the mattress or euro accounts outside the EU. If they have euro accounts in Greece or probably anywhere in the EU they will be forced to convert to drachmas at a rate bad for them and good for the bank.
Importantly, you should never feed a politician with an MRE, as they cause constipation, and they are already so full of it if they cannot release pressure, they may messily detonate, the gases of which may be ignited by their hot air.
Also, you should never feed a politician after Midnight, as in many cases they only consume alcohol after 10am.
About the only way for the Greeks to get out of this mess and get back to a stable Drachma, would be to do what the Germans did with their hyper-inflating Papiermark.
The German currency had been backed by gold, but with the outbreak of World War I, they adopted a fiat currency called the Papiermark, which was not backed by anything.
After the war, Germany faced enormous reparations which it could not meet, so they printed gigantic amounts of currency, which caused hyper-inflation. Finally the US sent over a top business executive and his team to restore a stable currency.
What he did was to create a second currency called the Rentenmark, a very stable currency backed with gold, that was strictly for government, financial institution, and major corporation use. With zero inflation, and a lot of *inherent* deflation (because of the inflating Papiermark) but no inflation or deflation within itself.
Thus, government, financial institutions, and major corporations could eliminate a huge amount of outstanding credit and debt, and eventually stabilize the now worthless Papiermark.
Once it was no longer horrifically inflating, then they were able to create a third, stable, new national currency, also backed by gold, the Reichsmark. And the hundreds of billions of Papiermarks were in an orderly manner swapped for a fraction of those numbers of Reichsmarks.
The gold backed Reichsmark was so very stable that for the most part, even the Nazis did not dare to fiddle with it, though Hitler wanted to, and tried several times before the German financial sector loudly told him to cut it out.
The Reichsmark survived the war, but then was finally replaced by the Deutschmark. It was again a fiat currency, but one under the control of the national German bank, not the government. It was very stable until 2001, when the Germans ceded control of their currency to the European Central Bank, who had little or no self-control, which led directly to the European financial crisis of 2010, which is still ongoing.
The pensions are a big part of the problem. It is going to be interesting to see what happens when so many bureaucrats see the buying power of those pensions decline enormously over the course of a few years...months?
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