Thursday, May 17, 2012

More Greek Elections - Will People Wait That Long?

Given that deposits in Greek banks might be converted from Euros to Drachmas - if things fall apart - what would you do with your money? The slow-motion run on Greece’s banks - the Financial Times –
As we reported in today’s dead-tree edition, senior eurozone officials responsible for monitoring the currency area’s banking system said the rate of withdrawals thus far falls short of a panic. But the International Monetary Fund’s recent report on Greece makes it clear that a slow-motion bank run has been under way for more than two years, with close to 30 per cent of deposits being pulled out since the end of 2009.

The IMF report is already a bit out of date, since it was published two months ago, but it still makes for sobering reading. It reported that since the start of 2012, Greek banks had lost 6.4 per cent of their deposits
New elections (2nd set this year) will probably elect a non-austerity government, which will mean Greeks won't get the rest of the bailouts they need, which will probably lead to Greece leaving the Euro and the EU and reinstate the Drachma. And devalue the Drachma.

If you hold Drachmas, and Greece is hit with hyperinflation, you could be left with very little...

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