Just a matter of time, I suppose.
Posted on 05/19/2012 12:57:24 PM PDT by Olog-hai
Reports began trickling in earlier this week that savers in Greece were withdrawing hundreds of millions of euros from their bank accounts—the German news agency DPA reported that almost €900 million was withdrawn just on Monday alone. Since then Europe has been seized by the fear of a worst-case scenario in Greek's banking system: a so-called bank run, as customers who have lost confidence in their banks rush to take out their savings.
Such a run would be the final stage in the loss of confidence in the banks. For months now, wealthy individuals in crisis-hit countries have already been moving billions of euros abroad out of fears about the stability of the financial systems in their own countries. Until recently, however, there had been few signs of abnormal behavior in terms of ordinary savers withdrawing cash.
The reason a bank run is so feared is because it could land every bank in the world in trouble—even the healthiest ones. The banking system depends on the fact that banks only hold a small portion of customer deposits in cash that is ready to pay out. The rest is invested or passed on to other customers as loans.
Now, rumors are circulating that in Spain, too, people have begun to clear out their accounts at certain banks. The newspaper El Mundo reported that customers had withdrawn over €1 billion from the beleaguered major savings bank Bankia last week. …
Some financial experts are now calling for rapid intervention by the European Central Bank (ECB) in order to prevent mass panic. … But the ECB's options are limited. It has already provided Europe's banks with extremely cheap money in the form of three-year loans within the scope of its Long Term Refinancing Operations (LTROs). …
(Excerpt) Read more at spiegel.de ...
Just a matter of time, I suppose.
when banks are being nationalized, its a good idea to get the money out before that gets nationalized too.
The money’s not here. Your money is in Bill’s house.
Sadly, the money is NOT in Bill’s house.
lol.
True. Maybe its under Bill’s house! Start digging.
As an aside, I wonder if there will be what could called a “currency split”, based in a loss of confidence in electronic currency, which can be easily manipulated or blocked, and physical currency, which cannot.
At the “ground level”, this would result in a “paper run” on the banks, as people tried to convert their entire savings into currency they then withdraw. This creates a dilemma, because retailers will then only accept cash, not credit, debit or checks.
The virtual money becomes worthless, while the physical money becomes valuable.
The reason I am interested in this is because the Europeans have a lot of currency printing offices, but America has only two. So if they suffer even a mild currency split, the same phenomena could be devastating in America.
"I can assure you that those villains will recognize, will discover in appropriate time in the future, how stupid they are and how they are pretending things which have never taken place"
I am less worry about that. MF Global already prove that a CEO can raid customer money to pay off high power bankers in order to preserve access with them and then immediately declare bankruptcy as a stockbroker corporation meaning the customer are among the last in the line of creditors. Thus example if the investment arm of Bank of America suffers severe losses from financial arrangements in imploding EU banks, they order the transfer of FDIC customer accounts to the BoA holding company, pay off the creditors of other banks, then declare bankruptcy. FDIC will be overwhelm and the customer will wake up and find their savings accounts empty. Sad part is it may be all legal under current bankruptcy laws for banks and investment firms.
Thanks for the article - will show to my 14-year old daughter studying the Depression. She just had to read and comment, with help from a parent (me!) on a paper that one of Obama’s policy wonks gave back in 2009.
The paper said that FDR did all the right things - but just not big or long enough!!! We need MORE “Fiscal Expansion” the paper said - which as far as I could figure out was for the government to borrow more money/ print more money to give to failing banks and businesses.
I guess the EU or SOMEONE just needs to give Greece and Spain more money.
My rebuttal to it was it was like claiming a person had a healthy financial position because they had a big fancy house, three fancy cars in the garage and a yacht on the river. But with a debt of $2 million dollars - was the person REALLY in that good of financial shape?
Just a few weeks ago the U.S. passed a debt milestone. Our debt is now MORE than our gross domestic product. (101.5%). Just a guess, but it might take some time to pay that debt back. Oh - but don’t worry Mr. China, I’ve got some stuff in the works and I plan on making it big in the next few years. Don’t tell anyone, but the next big thing is solar energy and I’m going to be a Gazillionaire!
Actually, that is good supporting justification to keep a substantial amount of “mattress money” in a safe place where only you control it.
You just gave *a* scenario for disaster, but there are many, many more. Yet they all boil down to violated trust with your money. If they don’t have your money, they can’t violate that trust.
Thanks Olog-hai.
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