The Troika of the EU, ECB and IMF have not yet “brought the curtain down” on The Greek Tragedy of Debt that is the Greek Banks, but, the following quote from the Financial Times over the weekend, should be taken as a serious, major warning to anyone who still has money left on deposit in Greece. Here is the relevant quote:
“The idea of a “Cyprus-like” presentation to Greek authorities, has gained traction among some Eurozone Finance Ministers, according to one official involved in the talks.”
What is now also abundantly clear, is that The European Central Bank “books” are swimming (more accurately drowning) in literally billions upon billions of Euros worth of completely “un-payable” Greek debt. The ECB then, faces TWO harsh realities.
- The ECB simply cannot afford to “suffer a loss” on the Greek “paper debt” on its books.
- Greece simply doesn’t have anywhere near the financial or economic capacity to repay, what is now in excess of €112 BILLION in credit exposure on the ECB’s books.
The ECB then, really only has two roads that it can go down. Neither or which, for differing reasons, are even close to being palatable.
- The ECB can try to foist that €112 BILLION of Greek debt, onto the other Central Banks in the Eurozone … even though this would quite rightly be seen as simply putting that debt onto the backs of the “innocent” taxpayers in those countries. Politically speaking, in the current climate, that is a completely untenable prospect.
Or … now … as bizarre and “unthinkable” as this options may seem …
- They can start confiscating depositors money in Greek banks, just like it did in the Cyprus “lab experiment” … and just as even the Financial Times has been reporting.
Either way, it appears that the “Greek Tragedy of Debt” may be coming to a head and entering its final Act, very soon.
One look at the following alarming statistics provides just a snapshot as to why, an pinpoints the sheer scale of the problem that the ECB and the Greek government face.
Yes, you did read that right! That IS 1.5 BILLION Euros that Greece needs to find … just during June, where they need to make four, yes FOUR, separate multi-million Euro payments to the IMF! Already, earlier in May, the Greek government wrote to the IMF to inform them that they would be unable to make May’s €762 million payment to them; a sum only around half of that which must be found in June remember! Now that prospect of Greece “defaulting” during THIS month of May, was only narrowly averted at the very last moment, when the Greek government, metaphorically speaking, “found some money down the side of the sofa” effectively, when, bizarrely, they “found” an emergency bank account that they didn’t know they had! That then, is the kind of “knife edge” that Greece’s finances are precariously balancing on right now. But … even before they have to run that nightmarish “June Gauntlet” of FOUR tranches of IMF debt repayments … they still face the almot equally impossible task of paying the salaries of their bureaucrats, civil servants and welfare staff, who keep the whole system operating for them. Their salaries are due obviously in a few days time, at the end of May. So under pressure like that then, and with the massive burden of expectation of the Greek People who voted them into power, resting ever more heavily on their shoulders, along with their promises to them of “defying the Troika”, the Greek government has in desperation already been confiscating bank funds … Not persoanl bank funds … But Local government bank funds. Listen to what Bloomberg have just reported a few moments ago …
“Running out of other options, Greek Prime Minister Alexis Tsipras ordered local governments, and central government entities, to move their cash balances to the Central Bank, for investment in short-term State Debt. The decree to confiscate reserves, held in commercial banks, and transfer them to the Bank of Greece, could raise as much as 2 Billion Euros ($2.15 billion), according to two people familiar with the decision.”
The money is specifically needed, these sources said …
“… to pay salaries and pensions at the end of the month.”
Now in the “olden days”, they used to call that stealing! So let’s get this right. They found “money in the sofa” … AND … they have stolen money from the “family” essentially and “invested it” in paying consumable salaries … all in order to “pay off the IMF loan sharks”! Hmmmm … Desperate days indeed. As you can imagine then, such out and out thievery and chicanery has shocked those “in the know”. Giorgos Patoulis, Mayor of the City of Marousi is also President of “The Central Union of Municipalities and Communities of Greece”. He angrily said in a statement just on Monday, that …
“It is a politically and institutionally unacceptable decision … No government to date has dared to touch the money of municipalities.”
So there you have it. Whether it is The Troika, or The Greek Government who “blinks first”, or whether BOTH “stand their ground” and take this brinksmanship to its ultimate crescendo, we could be about to witness the final Act of the “Greek Tragedy of Debt.” Give then, the parlous and perilous state of debt, especially its known levels of dangerous “interconnectedness”, the Q Wealth Report consistently urges its readers and members to have their “Get Out Of Dodge” plans firmly in place as soon as possible … NOW in fact … while we still have the chance. Once the Cyprus-style “Bail-In Cat” is well and truly “out of the bag”, and once the Central Bank system finds that it has no choice but to let the masses know, that THIS is how they plan to repair the mess they made, then it’s more than possible that there could be a real “stampede for the exits”, with all of the “Capital Controls” that might go along with that. Now if that happens … then there really WILL be a shortage of … let’s just say … “paddles in the creek!” So please … make sure you have contacted Q Wealth Report … or at least make sure that you have your copy of the “The Practical International Banking” Guide” in your hands. We cannot stress enough, how critical, and above all .. practical .. the Guide is. It really does come with our highest possible recommendation, especially in light of the looming Debt Crisis 2.0 emerging out of Greece again. We all know that somewhere like Greece could be the final catalyst that sparks yet another “bust” in the economy. And we all know too, that the underlying “Main Street” economy, is in no way in any shape to withstand such a crash. We only “survived” the 2008 Crisis with the aid of what was nothing short of massive State theft from posterity and our “children”! We all know too, that there are limits to how many times the State can “pull that stunt”, before even the “sleepwalking” people rebel. So that is why we urge ALL readers who haven’t yet read the Banking Report, to do so, without delay. We run the very real risk that one day soon, an event, like a “Greece”, will trigger a “domino effect” cascade of “economic responses” that will make it extremely difficult for us to protect our assets and families. So please, take advantage of what may well be “the calm before the storm”, and allow us to help you to “shore up your defense” … offshore! To Your Secure Financial Future, as always Kris Karlsson Banking Expert The Q Wealth Report Team