The $1.024 Billion Bank Run

by John Galt
May 15, 2012 15:55 ET

 

 

The Greek crisis took another turn for the worse as the middle class began to realize that no deal would be struck to form a new government and the European Central Bank would never seriously consider any relief for the stricken nation. As the electoral politics spiraled out of control over the weekend, on Monday Greek citizens withdrew approximately $1,024,000,000 aka €800 million from the nation’s banks. This means that the middle class has finally realized what the wealthy figured out over two years ago:

 

The nation as currently constructed economically and politically will collapse regardless of the results of next month’s elections.

 

While the current President attempted to bolster the nation with promises that there was nothing to worry about, his statements belie the seriousness of the crisis which everyone now understands will result in a complete financial collapse and calamity. From the Greek newspaper Protothema, this excerpt from a story today only will exacerbate the problem:

 

As revealed by the minutes of yesterday’s meeting between Papoulias, Samaras, Venizelos and Kouvelis, the President seems to have sounded a “national alert” for the Greek banking system and added that Manuel Barroso conveyed to him the anxiety in Europe.

 

Papoulias’ words are indicative, thus we present the entire relevant part of the minutes:

 

KAROLOS PAPOULIAS (President of the Republic): I wish to welcome you. I have no intention of dramatizing the situation which you all know and which is indeed very difficult.

 

I had two interesting telephone conversations. One was with Barroso at 4 pm. They are anxiously awaiting the establishment of a government in Greece and the successful conclusion of all these efforts we are making together. The second conversation was with Provopoulos. The state of banks is very difficult. Withdrawals and outflow had already reached 700 million euros at 4 pm when we were on the phone, not including all those orders to turn deposits to German government bonds, etc. With them they calculate that the total amount would reach about 800 million.

 

FOTIS KOUVELIS (Democratic Left president): All together?

 

PAPOULIAS: Yes, all together.

 

Over the next two days the situation will be worse. Provopoulos told me that there is no panic, but a great fear that can develop into panic. He also said that the strength of banks is very limited at this time.

 

If this effort we are making to form a government fails, then I do not know how things will develop. We have a big responsibility and I feel it personally. I thought I cannot take upon me the responsibility of failing in trying to form a government. I must go out tomorrow and tell the Greek people that I failed. But I did not fail. It was not in my hands to form a government. We all had to come together.

 

For those who have never seen a nation collapse or are too young to remember the Argentine and Russian financial implosion, this is what it looks like. Bank runs. Starvation. Governments overturned. Elderly allowed to die as beggars as their retirements are stolen by banks and governments. Learn this lesson well my friends as this could happen here with little warning in the United Kingdom, France, Mexico, or United States if the nations of the world keep attempting to cobble together a fly by the seat of their pants approach to economics and financial oversight.

 

The Great Con Game will end and it will not end well for the unprepared.

 

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