Greeks, Spaniards withdraw euros by the billions!
 

Link -
http://www.cbsnews.com/8301-500395_1...ctionContent.9
http://www.usnews.com/news/world/art...urozone-crisis

In Europe's most economically stricken countries, people are taking their money out of their banks as a way to protect their savings from the growing financial storm.

Worried that their savings could be devalued, or that banks are on the verge of collapse and that governments cannot make good on deposit insurance, people in Greece, Spain and beyond are withdrawing euros by the billions — behavior that is magnifying their countries' financial stresses.

The money is being hoarded at home or deposited in banks in more stable economies. I'm unsure whether it would be the wisest or most prudent of decisions,to risk my life saving stuffed under my mattress.However I'll definitely wouldn't chance any eurozone government insurance policy,if the banks suddenly busted neither.The Greeks are set to vote on June 17th,will this be the start of a domino effect for the eurozone.

Greek vote could unleash seismic shocks for euro -
http://www.reuters.com/article/2012/...8HFEY320120616

At least there are countries worse off than us.

They are pulling out money because they want Euro's, not because they are worried about insurance. When they switch back to the drachma, and then the next day the drachma falls to half the value of the Euro, you don't want the Greek Government replacing your Euro's with the drachma's on a 1-1 basis. I wouldn't, at least.

I would have expected prudent people to have started that months ago, to make sure that they were able to withdraw the monies. I expect the Governments will stop the banks allowing withdrawals before long - assuming the runs on the banks don't make them fail.

What their Governments really need now is some teams of good financial investigators to go through the books and presecute the people declaring a small fraction of their actual incomes and the rest of the graft/corruption that's been going on. Heck, apparently there's a small town where 10% of the people have been declared legally blind, with them receiving pensions due to that 'alleged' affliction.

I dont blame them, what do you expect them to do ? Keep their money in the banks and risk losing out when they go bust or convert to a different currency that nobody knows how the value conversion will work ?

Also so what if keeping the money in the bank is the right thing ? If everybody else is withdrawing you cant control what they do and if the situation is getting worse (which is clearly is) then you need to start thinking about yourself and your family at the end of the day nobody wants to live on the street.

The banks arent doing anything to assure people their money is safe, so why should the people care ?

The Germans arrogance that they Euro was the best way to go, along with their reluctance to buy up bonds will end up in the inevitable collapse of the currency.

If Greeks withdraw their money and keep it at home - then they are likely to be in for a shock if Greece exits the Euro. At this point there will almost certainly be restrictions on currency leaving the country, so the Greeks with euro cash at home will have little choice but to deposit the money back in Greek banks, at whatever exhange rate exists against their domestic currency.

At this point in time its very hard to say what will happen. I would not be too concerned about banks failing to honor depositors insurance (as governments will foot the bill). The primary issue is indeed domestic currency devaluation in the even that Greece exits the euro and returns to its own currency. There are only two logical ways to hedge against this currently:

1) Move money to a strong euro country (e.g Germany). In the event of a euro collapse and return to domestic currencies, Germany is widely expected to come out best in terms of exchange rate.

2) Move money to a non-euro country (UK, USA, Canada). Problem at this point is that the exchange rate is not as good as it was. If you move money now and the euro holds, you'll be worse off not better.

Being in the Netherlands, I'm not as worried as if I was in certain other countries (Greece, Italy, Spain) but I'm still watching the situation very carefully. Canadian banks are looking like an interesting route at the moment in terms of security, exhange rate not withstanding of course.

I'm still of the opinion that the euro has merit, but not for the large number of countries included. A single currency with parity across all countries involved is never going to work unless all the countries are roughly equal in terms of economy strength. Greece is the perfect example of this. The moment they entered the euro, all Greek exports (which is a substantial part of the Greek GDP) suddenly become more expensive, and thus less competitive. Couple this with the euro opening they way for ordinary Greeks to obtain cheap unmanageable levels of personal credit, and you had a bubble just waiting to burst.
Blame also has to be laid with the ordinary Greek people, who borrowed beyond their means, and are now paying a high price for their greed and lack of foresight. Yes, the banks were irresponsible in their lending, but no-one had a gun against the lenders heads either. Personal responsibility seems to be a taboo subject in this whole crisis for some reason. Everyone is quick to blame governments, but less quick to blame individuals who borrowed for mortgages 5 times their salary, and opened personal credit lines they had no hope of repaying.

Chris, the majority are drawing it out and investing it banks outside of Greece. So their money will be safe.

Indeed. Thats the way to approach the situation currently (at least until the Greek banks start preventing withdrawls). Its the ones withdrawing money and putting it under their mattress that should be worried if their approach is prudent.

Chris, don't forget that there's widespread corruption and tacx avoidance in significant parts of these countries - that's one of the main reasons they've ended up in this situation - as such, I would expect a thriving black market to develop as those still holding Euros would be able to negotiate better prices than the local, devalued currency.

Different countries have different euros. Unless Greeks were able to change theirs to German-issued ones, Greek euros would be all but worthless/worth as much as their new currency.

Good point, while a Euro is a Euro between members (if I understand it correctly), if the countries that printed it withdrew it probably wouldn't be legal tender, would it? then again, I would expect the 'different' Euros to be well mixed up amoung member countries, so it can't be that simple, can it?
It's different from the days when each country had different currencies that were only legal within their borders - now they can be used in over 20.
Perhaps one of the chaps that's a financial specialist can give an opinion?

Armageddon Averted!
Phew!... It's safe to put the dominos away for now,well perhaps,maybe,er... hmmhttp://www.discussworldissues.com/fo...ies/blink1.gif

Greek elections: voters give Europe and single currency a chance -

http://www.guardian.co.uk/world/2012...?newsfeed=true

Cheer'shttp://www.discussworldissues.com/fo...lies/wink1.gif

Well you know, they didnt have to join the Euro. And rating agencies didnt have to totally lie about the greek economy 10 years ago.

I wonder, would these countries be in the same position if the had kept their previous currencies? Are the problems bigger because of the Euro? How would Greece, Italy and Spain (and Portugal) do if they had their old currencies now?

I really doubt they would be in better shape right now. I think the Greeks should have voted against the Euro, just to see what happens then. Reduce the Euro to Germany, Austria, Finland, BeNeLux and France, and see how that goes.

I feel bad for the Germans who are pouring a lot of money trying to bail out those brainless lazy ****s.

You are wrong QD, Germans are pouring money to keep their domination role in EU alive.
In other words they just pay the price for being economy/politics leader.

I think that same currency (Euro) for way different (countries) economy/fiscal policy was doomed from the start. It was a bad idea, same as any form of globalization on this planet.

11 milion people who's bdp is over $300 billion, can not be "brainless lazy ****s".

I can't wait 'til they start paying taxes.

Haahahahhahahah!

Taxes are for noobs.

Sorry old friend but it is you who is wrong. Greeks need to cut down on siestas and get back to work. Germany are the dominant force in EU whether they pour money into the Greek economy or not and it is the only country at the moment who can afford bailing out a failed state that Greece is.