25 Signs That The Smart Money Has Completely Written Off Southern Europe
So their advice is blunt: Remove cash and other liquid assets from Greece and prepare to take a short-term hit on any other investments.“My personal view is that it is irrational for anyone, whether a corporation or an individual, to be leaving money in Greek financial institutions, so long as there is a credible prospect of a euro zone exit,” said Ian M. Clark, a partner in London for White & Case, a global law firm that has a team of 10 lawyers focusing on the issue.
Financial advisers and private bankers whose clients have accounts too large to be covered by a Europe-wide guarantee on deposits up to 100,000 euros ($125,000), are reporting a “bank run by wire transfer” that has picked up during May.Much of this money has headed north to banks in London, Frankfurt and Geneva, financial advisers say.“It’s been an ongoing process but it certainly picked up pace a couple of weeks ago We believe there is a continuous 2-3 year bank run by wire transfer,” said Lorne Baring, managing director at B Capital, a Geneva-based pan European wealth management firm.
The Fed and regulators have tried to stress to money market funds, for example, to reduce their exposure to European financial institutions.
Last week, the European Commission said that it has asked member states to make plans to deal with a potential Greek exit, ahead of a second round of Greek elections on 17 June.
“Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax.”Even more than she thinks about all those now struggling to survive without jobs or public services? “I think of them equally. And I think they should also help themselves collectively.” How? “By all paying their tax. Yeah.”It sounds as if she’s essentially saying to the Greeks and others in Europe, you’ve had a nice time and now it’s payback time.“That’s right.” She nods calmly. “Yeah.”And what about their children, who can’t conceivably be held responsible? “Well, hey, parents are responsible, right? So parents have to pay their tax.”
The summit will be dominated by central bankers including the host, Sir Mervyn King, Governor of the Bank of England. Mario Draghi, president of the European Central Bank, and Zhou Xiaochuan, governor of the People’s Bank of China, have been invited.
“The Greece-exit is a done deal: According to the German economic news from financial circles EU and the ECB have abandoned the motherland of democracy as a euro member.The reason is, interestingly, not in the upcoming elections – these are basically become irrelevant. The EU has finally realized that the Greeks have not met any agreements and will not continue not to meet them. A banker: “We helped with the Toika. The help of the troika was tied to conditions. Greece has fulfilled none of the conditions, and has been for months now.”
British banknote printer De La Rue is drawing up plans to print new drachma notes in the event of a Greek euro exit, according to an industry source with knowledge of the matter.The world’s biggest security firm G4S expects to be involved in distributing notes around the country.
The debate among very knowledgeable individuals and institutions as to the future of Europe is intense. There are those who argue that the cost of breaking up the eurozone, even allowing Greece to leave, is so high that it will not be permitted to happen. Estimates abound of a cost of €1 trillion to European banks, governments, and businesses, just for the exit of Greece. And that does not include the cost of contagion as the markets wonder who is next. Keeping Spanish and Italian interest-rate costs at levels that can be sustained will cost even more trillions, as not just government debt but the entire banking system is at stake. Not to mention the pension and insurance funds. If the cost of Greece leaving is €1 trillion, then who can guess the cost of Spain or Italy?
http://nunezreport.blogspot.com/
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