Bank runs have started in Greece

[dancingshoes]

Hearing that Greeks withdrew 800 million euros from banks in just two days last weeks amid scenes of chaos in branches and long queues in the summer sun brings back memories of the first bank run in two centuries in the UK at Northern Rock that signaled the imminent global financial crisis.

Then it was the subprime mortgage crunch that did for the banks. In Greece a whole nation is about to go bankrupt. Is you have money then you certainly don’t want to leave it in a bank to be converted into drachma that will plunge in value.

Worth less euro

The euro may be worth 25 per cent less than it was a year ago in dollar terms but it is still a hard currency by comparison to anything the Greek Government can cook up in a crisis. Even the local authorities in Greece are furiously spending whatever cash they have on outstanding contracts, knowing that it won’t be long before the government seizes whatever they have got.

The Greek debt crisis has been at boiling point for how long now? It’s over four years since we started reporting on it in earnest.

However, clearly even the monumental patience of some long suffering Greeks is fading and this summer a panic mentality is starting to takeover. Once the crowd all decides to rush to the exit door at the same time, or into the bank, then the debt bubble really is about to burst and this becomes a self-fulfilling prophesy.

Germany calling?

Can Germany put up enough cash to fill the gaping hole in Greek bank accounts? Does it have the political will to do so? Even the International Monetary Fund is beginning to distance itself as far as possible from the sinking Greek ship of state.

Of course the real analogy is not Northern Rock in the UK but the pulling of the plug on Lehman Brothers in New York that triggered the 2008 crash. At the time the authorities thought they could contain the fall-out. They could do no such thing.

Will it be any different this time? Actually central banks don’t have as many policy levers to pull. They are out of ammo with the enemy at the gate, or at least in a queue at a Greek bank. Time to hold gold, not paper money?

Posted on 01 June 2015


http://www.arabianmoney.net/gold-si...-rock-flagged-up-the-global-financial-crisis/

 

[Leongsam]

This is what happens when the people are paid a wage that is way higher than their economic worth.

Thank goodness the PAP is smart enough to resist the call for a minimum wage. If Sinkies were paid more than their worth, Singapore would end up like Greece in no time at all.

 

[JohnTan]

Thank God for PAP! Your CPF monies are safe with a fixed interest of 2.5% p.a. guaranteed by the Constitution. And all these years, PAP has delivered and never once defaulted. The Greeks are incompetent.

 

[Leongsam]

Thank God for PAP! Your CPF monies are safe with a fixed interest of 2.5% p.a. guaranteed by the Constitution. And all these years, PAP has delivered and never once defaulted. The Greeks are incompetent.

Well said I have added to your points.

 

[Reddog]

Aiyah! missed the opportunity to short EUR/USD.

 

[Reddog]

This is what happens when the people are paid a wage that is way higher than their economic worth.

Thank goodness the PAP is smart enough to resist the call for a minimum wage. If Sinkies were paid more than their worth, Singapore would end up like Greece in no time at all.

Sam, I think you missed the point. Singapore was built by the sweat and blood of true blue Chinese, Indian, Malay and Eurasian Singaporeans. This combined effort was led by a team of 1st generation leaders like lky, Goh KS, Raja, Barker, Hon SS, David Marshall, JBJ, etc. We worked hard, saved hard and brought up succeeding generations of Singaporeans.

Moving onward, the cohesion and spirit is polluted and weakened by scammers from the Phillippines, India Indians, PRCs, etc, who are here to enjoy the fruits ... to game the system with fake degrees, fake toil....

Damn the pap. VTO VTO

 

[Charlie99]

The run on the Greek banks, have yet to happen. But I speculate that it will happen very soon, or this summer.

 

[singveld]

they have been withdraw money for months. nothing new.

there is a group of people in singapore just like the greek, do not want to pay tax, want to retire early, want handout from gov, just like the opposition supporters.

 

[Cerebral]

Hearing that Greeks withdrew 800 million euros from banks in just two days last weeks amid scenes of chaos in branches and long queues in the summer sun brings back memories of the first bank run in two centuries in the UK at Northern Rock that signaled the imminent global financial crisis.

Then it was the subprime mortgage crunch that did for the banks. In Greece a whole nation is about to go bankrupt. Is you have money then you certainly don’t want to leave it in a bank to be converted into drachma that will plunge in value.

Worth less euro

The euro may be worth 25 per cent less than it was a year ago in dollar terms but it is still a hard currency by comparison to anything the Greek Government can cook up in a crisis. Even the local authorities in Greece are furiously spending whatever cash they have on outstanding contracts, knowing that it won’t be long before the government seizes whatever they have got.

The Greek debt crisis has been at boiling point for how long now? It’s over four years since we started reporting on it in earnest.

However, clearly even the monumental patience of some long suffering Greeks is fading and this summer a panic mentality is starting to takeover. Once the crowd all decides to rush to the exit door at the same time, or into the bank, then the debt bubble really is about to burst and this becomes a self-fulfilling prophesy.

Germany calling?

Can Germany put up enough cash to fill the gaping hole in Greek bank accounts? Does it have the political will to do so? Even the International Monetary Fund is beginning to distance itself as far as possible from the sinking Greek ship of state.

Of course the real analogy is not Northern Rock in the UK but the pulling of the plug on Lehman Brothers in New York that triggered the 2008 crash. At the time the authorities thought they could contain the fall-out. They could do no such thing.

Will it be any different this time? Actually central banks don’t have as many policy levers to pull. They are out of ammo with the enemy at the gate, or at least in a queue at a Greek bank. Time to hold gold, not paper money?

Posted on 01 June 2015

http://www.arabianmoney.net/gold-silver/2015/06/01/bank-runs-have-started-in-greece-remember-how-queues-at-northern-rock-flagged-up-the-global-financial-crisis/

Actually the typical misnomer is that Germany is footing the bill. Actually Germany dies not even come out a single cent. They just work like a guarantor.

The Greece problem is an act of brinkmanship, which is a dangerous game. It's like a game of Chicken and see who blinks first. They will bring to the edge to get the concessions and this is typical European politics.

 

[Wunderfool]

Look likely that the major countries like Germany and France in Euro will kick Greece out of the Euro zone in order to keep the Euro intact. Greece is like a recalcitrant teen ( you know who ... ) who cannot keep its promises to reform its economy and cut back its debts.

But doing so will have serious repercussion on the zone especially Spain and Portugal are also having huge debt issues.

If we look at the macro-economic issues ( huge debts and massive unemployment, bank runs , shops and businesses closing down and loss of investor confidence) in Greece, Spain , Portugal and even Italy, we ought to be grateful that we have a good government in Singapore to ensure that our economy is growing every year and our people are able to compete with the rest of the world.

 

[JohnTan]

Look likely that the major countries like Germany and France in Euro will kick Greece out of the Euro zone in order to keep the Euro intact. Greece is like a recalcitrant teen ( you know who ... ) who cannot keep its promises to reform its economy and cut back its debts.

But doing so will have serious repercussion on the zone especially Spain and Portugal are also having huge debt issues.

If we look at the macro-economic issues ( huge debts and massive unemployment, bank runs , shops and businesses closing down and loss of investor confidence) in Greece, Spain , Portugal and even Italy, we ought to be grateful that we have a good government in Singapore to ensure that our economy is growing every year and our people are able to compete with the rest of the world.

Greek politicians are not being liars intentionally. They just probably have no idea how to spend within their budget, given that for most of Europe, almost every country resorts to bonds to raise funds for all their government spending in spite of collecting something like 40% in income tax.

European politicians need to learn a thing or two from our PAP in fiscal prudence, spending within their budget instead of habitually bursting their budget on populist schemes to remain elected.