Greeks are pulling cash out of banks, stocking up on food in panic ....

Financial Post ^ | 06/13/12 | Dina Kyriakidou and George Georgiopoulos

[TigerLikesRooster]

Greeks are pulling cash out of banks, stocking up on food in panic ahead of make-or-break election Sunday

Dina Kyriakidou and George Georgiopoulos, Reuters Jun 13, 2012 – 8:41 AM ET

ATHENS — Greeks pulled their cash out of the banks and stocked up with food ahead of a cliffhanger election on Sunday that many fear will result in the country being forced out of the euro.

Bankers said up to 800 million euros (US$1 billion) were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods, as fears of returning to the drachma were fanned by rumours that a radical leftist leader may win the election.

The last published opinion polls showed the conservative New Democracy party, which backs the 130 billion euro ($160 billion) bailout that is keeping Greece afloat, running neck and neck with the leftist SYRIZA party, which wants to cancel the rescue deal.

[Vince Ferrer]

So you run to the bank to get all your cash out. You beat the crowds and you stuff your mattress with euros. What happens when your fiat currency that has no basis in real assets collapses? I mean, will the greeks even recognize it once there is no euro? Or will they create an exchange where you can turn them in for one drachma for thousands of euros(since it’s worthless once it collapses). I think the lucky ones who got their cash out might find themselves sitting on piles of the equivalent of our civil war confederate currency. Interesting to have, but worthless.

For Greeks, what they fear is that the government will lock their Euros in their bank accounts, electronically switch them to Drachmas, and then devalue the Drachma, which will destroy the value of their savings.

If a Greek has a loan, it is almost certainly denominated in Euros. If they suddenly convert to Drachmas and devalue, the loan will still be denominated in Euros, and their salaries will now be paid in drachmas, so it will take far more drachmas to convert to Euros to pay the loan. Many loans will default when that happens, because their salaries will not go up by an equivalent amount.

So the best strategy right now for a Greek, or Spaniard, or Italian, is to keep withdrawing their cash from the banks in Euros, and keep them in paper cash at home. If they wake up one day with drachmas, they still have the Euros they physically have in their mattresses, and can still pay their loans, because their physical cash will not be converted by stealth into Drachmas.

[yldstrk]

oh! You are right. I will have to watch it

[Travis McGee]

"The U.S. in 2016?"

Optimist.

[Nebr FAL owner]

In what country ? Spain? Greece? Italy? the United States?

[Nebr FAL owner]

The MSM can’t get this story because it scares the begesus out of them . If they ran with these stories they would literally alarm the great unwashed & that would panic the political class into doing something full bore stupid .

Keep stocking up on food, tools,& knowledge. Be prepared to protect yourself & your loved ones & understand that the elites of this country are less honest than the three card monte dealer on the street corner.

[Axenolith]

That’s why you have to SPEND or CONVERT it once you get it out. Food, necessities, ammo, liquor, gas, etc...

[RipSawyer]

I hope against hope that it won’t come to that but if it does there will quickly cease to be any really sparsely populated areas except those that are so far out that living there would mean going back to the ways of five hundred years ago. I look around at where I live and realize that only someone younger than my wife and I and at LEAST as skilled in the old ways would be able to get away from the crowds. In such a scenario there will be woods full of people trying to kill the last deer, wild hog, rabbit or squirrel and catch the last fish around here. Of course if we had enough canoes loaded up we could start down the creek that fronts our land and proceed down to the river and try to float to some place hidden but then what? Live in the middle of a South Carolina swamp until we die of who knows what? I ain’t Troy Landry.

[cuban leaf]

Your post discusses the problems I have with the “ultimate meltdown” scenario. I don’t expect it to go that hard, but I imagine a world run by a one world government that is a type that seems like a combination of the old USSR and communist China.

When was the last time a great civilization collapsed that it was NOT painful for all involved?

[RipSawyer]

Yes, I am sure that some are in a position to “bug out” and do reasonably well at it but many are just fantasizing. We can’t all escape to the country and live off the land. I know what “living off the land” involves and believe you me it is not a picnic. I started doing chores as soon as I was big enough to carry one piece of firewood at a time to fill the woodbox. I progressed to gathering the eggs and so on until I was walking behind a plow pulled by a draft horse while still in grade school, I think I was ten when I fist started plowing. By the time I was twelve or so I was expected to come home from school and go to work without needing much supervision and from the time I turned fifteen until I went from school to the Navy I cut the firewood by myself, my older brother had gone to work at a textile plant and didn’t help me any more. I milked the cow before school and again after school. I grew up in much the same way as my parents and grandparents had except that we had electricity and even a TV but the only plumbing was a cold water tap in the kitchen. We had no telephone. I don’t think very many people really want to live off the land these days. Only the young, healthy, tough minded and physically fit could even stand the physical strain.

[cuban leaf]

—Only the young, healthy, tough minded and physically fit could even stand the physical strain.—

Imagine a few thousand watts of solar cells and/or wind and water power and battery operated farm equipment.

But you and I are in agreement. Sometimes the talk of us preppers reminds me of the scene in Gone With the Wind where the Southern Gentlemen are discussing what sport a war with the north would be. ‘Cept it wasn’t.

[RipSawyer]

“Imagine a few thousand watts of solar cells and/or wind and water power and battery operated farm equipment.”
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It makes a pretty mental picture but where would you get all that “battery operated farm equipment”. I don’t even know where to get a small, one row tractor with the necessary equipment other than to search for it used. I think all the new farm equipment is geared toward the big operations. Even if you found it new it would be expensive and likely of low quality. Mules might actually be more practical if you can find the equipment and you have land. I can teach you how to use them ;>)

Solar cells may become more and more practical but wind is very unreliable in most places and water power demands a stream big enough to use and a drop which means building a dam unless you live in mountains. Damming a stream which is big enough to provide usable power is a large project.

[cuban leaf]

—It makes a pretty mental picture but where would you get all that “battery operated farm equipment”.—

Think of it as the equivalent of the old wood fired tractors from WWII. A lot of work, but you’d have to modify existing stuff.

[Little Bill]

My brother went there, they are very good.