Don’t Stand in Front of the Fan
Just as a reminder that things can always get worse, the Greeks are stockpiling canned goods.
Greek citizens fear the ramifications of a return to the country’s previous currency, the drachma, if the radical left-wing party and strong election contender SYRIZA wins this weekend.
Bankers said daily withdrawals from the major banks were hitting €500-€800 million ($631.8 million-$1.01 billion), Reuters reported.
Meanwhile, retailers say consumers are stocking up on non-perishable foods like pasta and canned goods.
Oh, and by the way, 800 million euros are being withdrawn a day.
Greece only has about 2 billion euros left in liquid funds, so it clearly won’t be able to help support the banks, which themselves are insolvent. It appears that their strategy is either:
- Default on the debt, return to the drachma, and become unimaginably poor, or
- Never mind, see point above
Now, I am sympathetic to the Greeks. The austerity measures ARE going to end up harming the Greek people who are extremely dependent on government spending. Cutting the spending that they’re dependent on, and then raising taxes will only further harm them. They’re stuck between a rock and a hard place, and honestly they might just be better off if they do default just to get the debt burden off their shoulders. However, the rest of Europe has thrown money after saving Greece, and if Greece defaults, they won’t be happy. No matter what happens, Greece won’t be happy, either.
Greece is just the starting point, though. Spain is in ever worsening shape. Italy isn’t faring much better. The US isn’t far behind. And forgive me for only citing one source, but I think that Zero Hedge does a good job of summing it up.
The only advice I can give is this: Get as far away from the fan as possible.