‘The bank runs that we are watching right now
"Whoever tells you a Greek exit would be no big deal is an idiot, lying or disingenuous," said Sony Kapoor of the European think-tank Re-Define. Economists fear that a disorderly exit would prompt a huge run by investors on Spanish and Italian debt, forcing those countries to seek support from an EU bailout fund, which, with a capacity of just €500bn, is widely regarded as too small to cope with those pressures.
A Greek exit from the euro would not only result in a run on Spanish and Italian bonds, but it would also likely result in a run on Spanish and Italian banks.
is a powerful motivator. If
And a Greek exit from the euro is looking more likely with each passing day. Even the IMF is now admitting that it is a very real possibility....
Christine Lagarde, head of the IMF, warned she was “technically prepared for anything” and said the utmost effort must be made to ensure any Greek exit was orderly. The effect was likely to be “quite messy” with risks to growth, trade and financial markets. “It is something that would be extremely expensive and would pose great risks but it is part of options that we must technically consider,” she said.
Meanwhile, banks in other troubled European nations are already on shaky ground. The Spanish banking system is an absolute disaster zone at this point and on Monday night Moody's downgraded the credit ratings of 26 Italian banks.
Italy's former premier Romano Prodi
said the EU risks instant contagion to Spain, Italy, and France if
Angelo Drusiani from Banca Albertini said the only way
to avert catstrophe is to convert the European
Central Bank into a lender of last resort. Otherwise
So what can be done about any of this?
there is actually a lot that could be done if politicians in
truth is that
following is my prescription for
1) Default on all debts.
2) Leave the euro.
3) Issue drachmas that are debt-free and that do not come from a central bank. Instead, have the Greek government create them and spend them directly into circulation.
4) Enjoy a return to prosperity.
In such a scenario, the Greek national debt would no longer be a problem, the Greek government would never have to borrow any more money and austerity would no longer be needed.
inflation would be an issue with the new currency, but a bit of inflation would
be a walk in the park compared to the horrible economic depression that
And once the Greek economy was growing again, it would certainly be possible for them to make the transition to "hard money" if they wanted to.
It is imperative that we all understand that just because the global financial system works a certain way today does not mean that it must always work that way.
you have a few minutes, I want you to watch an incredible speech by a
12-year-old Canadian girl named Victoria Grant. In this 6 minute speech, she details how the
bankers are defrauding the people of
If a 12-year-old girl can figure this out, then why can't the rest of us?
Sadly, the financial world still seems enamored with the corrupt central banking system that has gotten us into this mess. In fact, one recent poll found that Federal Reserve Chairman Ben Bernanke has a 75 percent approval rating from global investors.
need the American people to understand that the Federal Reserve system is a perpetual debt machine. The
When will people wake up and realize that central banking is the problem and not the solution?
When will people wake up and realize that national governments do not have to go into debt to anyone if they do not want to?
In our world today, there is far more debt than there is money.
It is a system that will inevitably crash.
But there are other alternatives.
Unfortunately, politicians all over the globe continue to want to be married to our current debt-based financial system.
As a result, we will suffer the consequences of that system.