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Old 12-06-2011, 01:01 PM   #1
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Exclamation Bank runs in the Eurozone

Quote :
... 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.
...
Nevertheless, the Greeks today only have €170 billion in savings -- almost 30 percent less than at the start of 2010.
...
Those who can are trying to shift their funds abroad. The Greek central bank estimates that around a fifth of the deposits withdrawn have been moved out of the country. "There is a lot of uncertainty," says Panagiotis Nikoloudis, president of the National Agency for Combating Money Laundering.

The banks are exploiting that insecurity. "They are asking their customers whether they wouldn't rather invest their money in Liechtenstein, Switzerland or Germany."

Nikoloudis has detected a further trend. At first, it was just a few people trying to withdraw large sums of money. Now it's large numbers of people moving small sums. Ypatia K., a 55-year-old bank worker from Athens, can confirm that. "The customers, especially small savers, have recently been withdrawing sums of €3,000, €4,000 or €5,000. That was panic," she said.

Marina S., a 74-year-old widow from Athens, said she has to be extra careful with money these days. "I have no choice but to withdraw money from my savings," she said.
...
http://www.spiegel.de/international/...802051,00.html

Bank holidays are likely coming since it looks like a bailout is off the table.
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Old 12-06-2011, 01:13 PM   #2
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How are these banks still surviving?
They must be heavily subsidised by emergency funds through the national bank of Greece and the ECB. No private lender in the interbank money markets would grant them any loans to manage their liquidity.
Next question: What do these Greek banks offer as collateral to the NBOG and the ECB? They probably offer Greek sovereign bonds? Will they be taken for their market value (33 % or so) or for 100 c on the €? I bet it´s the last one...
In essence, this means that Eurozone taxpayers already backstop all Greek banks because the ECB holds worthless collateral.
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Old 12-06-2011, 01:13 PM   #3
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Well, at least I don´t feel alone drawing down my checking account there in America by $500 via the ATM some three times per week...

When I get back, I will keep at it! My own personal bank run. On occasion I will take out four-figure amounts and dash off to the coin shop for gold. As I have for decades. Shopping and saving at the same time, nothing better!
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Old 12-06-2011, 02:44 PM   #4
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I think the bank run is just a part of it. From what I have read, people are no longer even depositing paychecks. They simply cash them and keep the cash. The underground economy in Greece and Italy is huge. those two countries lose tremendous amounts of tax revenue each year.
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Old 12-06-2011, 04:14 PM   #5
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Originally Posted by ancona View Post:
I think the bank run is just a part of it. From what I have read, people are no longer even depositing paychecks. They simply cash them and keep the cash. The underground economy in Greece and Italy is huge. those two countries lose tremendous amounts of tax revenue each year.
The underground economy is huge everywhere. NYC anyone?

Also.. I'm not really sure if i'd phrase it as "lost tax revenue". I'd argue they don't have a legit claim to that money anyways.
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Old 12-06-2011, 04:31 PM   #6
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If we're going to have a tax, then it should be paid by everyone, not just those who choose to. think about it this way, if taxes were paid on every drug deal, every prostitues trick, every swap meet purchase, etc., the hole might not be so deep. I don't want taxes any more than anyone else does, but without radically shrinking government at all levels, it ain't going to happen any other way. Ron Paul would be a great start. It is his intention to dismantle government department by department.
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Old 12-06-2011, 06:36 PM   #7
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+ 1,000,000, ancona for Ron Paul 2012! Like you said, a great start.
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Old 12-06-2011, 06:46 PM   #8
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I think more people would be willing to pay taxes if there was the perception that the government wasn't just mis-spending the revenue - even using it to repress us.

They've not kept up their end of the bargain at the fed level. I find it a lot easier to be willing to pay local taxes, for which I (maybe) get tangible services, instead of disservice from the federal level. Congress' approval rating, anyone? I'm not alone in my assessment.

In an attempt to make that distinction moot, the feds give a lot of money back to the locals (always with big strings attached), to make for a more centralist-statist situation. It's an old trick the states should be resisting harder. But they fell for it, and in that, did us a disservice. Somehow they've all been tricked into thinking they get more than they have to give for that.

I don't see why my mom (bless her dearly departed soul), who was a psychologist, should have to pay taxes on produce and chickens she took in trade for therapy from patients seen off the books because they couldn't afford the going rates that would pay the insane malpractice insurance, though. (imagine paying $30/hour for insurance in a practice where all you do is talk to people, psychologists can't even prescribe drugs) But she got busted for doing that public service - she worked with abused and suicidal women, who guess what, don't often have a lot of money.

And, to the IRS, talk isn't cheap. Since she had to charge $45/hour to get $15 after the insurance - those chickens were worth the avoided costs. So one chicken became worth say, 10 hours of therapy - or $450, on which tax had to be paid.

And yes, they came after her for that.

The feds only provide real services to those who pay no taxes - GE, Boeing, RIAA, Microsoft, those sort who have captured all the power anyway. The rest of us they just spy on to make sure we're no threat to the status quo.

I find it hard to be willing to pay them taxes for that, and on things like, friend Paul needs a special tool for his woodworking shop, so I make that for him, and he provides me some jig for my machine shop - legally, we're both supposed to pay taxes on that swap. What do we get in return from them? We have to do our own road plowing when the snows come, or wait a week to get out - and the roads aren't paved here anyway.

Even if you believe the war on terror is a good thing, from our POV it's just denying us some good moving-target practice. And making us some serious enemies out there - hard to call that a service.
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Old 12-07-2011, 08:04 AM   #9
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Quote :
Bank of France debts jump tenfold on capital flight

The Bank of France faces surging debts to Germany's Bundesbank and fellow central banks in the EMU system as foreign investors pull large sums out of French accounts.
...
http://www.telegraph.co.uk/finance/f...al-flight.html

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Old 12-07-2011, 09:14 AM   #10
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European banks, and very specifically Dexia, Credit Agricole and SocGen are in seriously deep trouble. Just look at the dollar swaps. From a facility that was supposed to support somewhere around 10 billion dollars in swaps, there has been over 50 billion and the number is growing. The system is seized up tight. The only difference between today and 2008 is that they see it coming and are able to throw money at it before it gets beyond their ability to paper over. The trouble with this method is that it merely makes the ultimate breakdown that much more painful. My friends, I see a light at the end of the tunnel, but unfortunately for us, it is the southbound freighter and it's brakes are out.

This is going to get real, and when it does, millions upon millions will starve to death. this is not an exaggeration, nor is it fear mongering, it is the plain and simple truth.

Folks used to [when I was a kid anyway] keep several months of food in their home. Remember grandma's pantry? Remember row upon row of canned goods? I certainly do. I also follow grandmothers model. We try to keep a years worth in the house, including all the stuff we can from the garden.

Don't be a sheeple, the time to prep is running out. Get open pollinated heirloom seeds for THREE seasons, a Berkey water filter, lots of toilet paper, and.....well you already have the list so I won't bore you with the rest of it.
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Last edited by ancona; 12-07-2011 at 09:31 AM.
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Old 12-07-2011, 09:20 AM   #11
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Don´t forget KBC. They´re totally undercapitalized
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Old 12-07-2011, 01:23 PM   #12
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Hey, yo, all you doom-mongers! Don´t start pulling your money out of the banks until I get back!!! LOL...

I want to be FIRST in that line!

And stop buying up all that physical! Leave some more for me!

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Old 12-07-2011, 01:37 PM   #13
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It's getting uglier by the hour. Bloggers are picking up on this and the word is spreading. That's the one downside to the web, bad news travels even faster than good news. It's probably part of the reason the government wants to have a "kill switch".
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Old 12-11-2011, 02:32 AM   #14
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Originally Posted by DCFusor View Post:
I think more people would be willing to pay taxes if there was the perception that the government wasn't just mis-spending the revenue - even using it to repress us.
People would also be more willing to pay taxes if they perceived that the tax system was fair and simple. Neither fair nor simple is our tax system.
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Old 12-11-2011, 09:49 AM   #15
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Originally Posted by DoChenRollingBearing View Post:
...
And stop buying up all that physical! Leave some more for me!

There will always be some for you - at the right price point.
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Old 12-11-2011, 10:54 AM   #16
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Monday could be quite interesting with the downgrade of Eurobanks last week. The market has had a couple of days to chew on this and the situation in the rest of Europe. Draghi and Merkozy are at a critical juncture in the final phase of their attempt to "save" the European Union. A failure to get every single country on board will result in all member stated reverting to their traditional currencies, which results in phenomenal losses for the banks. The self reinforcing spiral this will create in the financial world will be biblical. Imagine for a minute if you will, what happens when tens of millions of people all go to their banks at the same time to withdraw funds, only to be denied or limited to some arbitrary amount. Chaos would reign supreme. Empires have fallen over less.

Can it happen here? Absolutely. As a matter of face, when I tried to get ten grand in cash from BOA, I was summarily refused. I had to see a bank officer who asked me a lot of questions that have zero to do with my money. After repeatedly telling him that I simply wanted to have some cash on hand in case of emergencies, he actually said he did not believe me. At that point, I demanded he close all three of my accounts. It took about 45 minutes and a ten minute lecture from the branch manager before I got it.

It has become so completely fucked up in our country, I am amazed that we haven't collapsed from the inside already.

If you have not already done so, move your money to a Credit Union. The time is coming when the big boyz are going to explode and you will not have time to do anything about it. The FDIC is broke, so they will have to print huge sums of money to cover the promised 250,000 per account. It won't be pretty.

Got PM's?
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Old 12-11-2011, 01:22 PM   #17
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Back-Door Bank Runs in Europe Have Started
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Old 12-11-2011, 01:31 PM   #18
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So, now it's been published. Next week will indeed be interesting. Also, thanks for the link to the news site. It looks to be a fairly conservative web-based news outlet.
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Old 12-11-2011, 09:06 PM   #19
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As we tick down to Thursday (when I will be back and ready to resume my own personal bank run), I really hope you guys don´t take the Au and the Ag out of the retail system! I want one more chance (at least!) to BUY!

I still stand by my earlier remarks that holding genuine FRNs (in some combination of $20s, $50s and $100s) is a smart idea, especially if there IS a bank holiday (likely means no credit card use either). How much cash? Say a few thosand dollars worth, enough to get through 3 - 6 months of (barebones) living expenses. After such a time frame, if the SHTF scenario is bad enough, then silver would come into play as a currency (my best guess).

Here´s two general classes of scenarios to think about:

1) a ´mild´SHTF, something on the order of The Great Depression, where LOTS of money is lost, few jobs, etc. But, the grid stays up and social order is more-or-less maintained. This could go on for years. It could be hyperinflation or deflation or a combination. If this would be about as bad as it would get, Mr. and Mrs. Bearing will work out OK. And a decent chunk of our wealth would go to our kid.

2) a BIG & BAD TEOTWAWKI, that shuts down the grid, imperils our infrastructure (so that physical food is hard to get), shuts down the water supply, etc. PM stashes would certainly help for a while, but the only real winners would be people who have made advanced preparations (like DCFusor and my brother´s friend in rural NC, yeah, the guy who can shoot over 2000 rounds without having to RELOAD!). The scale of preparations needed for this very bad one are so vast that Mr. and Mrs. Bearing would join the 85% dieoff when tradeable PMs and other stuff we have run out. And, I´m too old to learn to farm... Our only hope would be PERU, where we have a company bringing in vehicle spare parts and we would bring enough $$$ and Au with us to be wealthy. Peru is not so hair-trigger tight like our JIT economy is... The timing would be the hard part here...

---

PMBug, I again commend you on your forum. Although I have not REALLY looked around, your place fits a great niche of both quick news and discussion at length features.

+ $55,000!
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Old 12-11-2011, 10:09 PM   #20
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Thanks DoChen. My guess is Scenario #1, a slow gradual financial deterioration, such as what we are experiencing right now, except continuing to get even worse. And then degradation at a somewhat faster rate if/when the dollar collapses, but not a complete SHTF during a dollar collapse.

I think it would take an additional catastrophe of some sort on top of Scenario #1 to launch us into Scenario #2.
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