Moody's Warns Of "Severe Greek Bank Cash Shortage" Due To Accelerating Deposit Flight

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Mon, 06/27/2011 - 09:14 | 1405088 slow_roast
slow_roast's picture

Great, this means that in the monetary circle jerk China will get new orders for printing presses; globalization.

Mon, 06/27/2011 - 09:20 | 1405121 FOREX loop.
FOREX loop.'s picture

China has the chance to really become a scary world power... There are some serious national moves affoot.

Silver not looking good right now.

I'm not as optimistic that it will bounce back. I think Gold will slay the chinese dragon.

Mon, 06/27/2011 - 09:26 | 1405131 MFL8240
MFL8240's picture

Yup, but the US is busy with gay rights, confiscation of guns, overlaoding the sytem with illegal immagrants, handouts to the non producers and phony meetings on debt celings because of gross mismanagement to partake in the European mess.  China, for all its faults and stupid moves will come out smelling like a rose no matter what happens in Greece.

Mon, 06/27/2011 - 10:00 | 1405179 French Frog
French Frog's picture

There must be a trading desk somewhere watching ZH that will push the Euro up 50/70 pips everytime euro-bearish news are published in here


Mon, 06/27/2011 - 10:19 | 1405259 snowball777
snowball777's picture

Yes, that's why their interbank rates are soo low...all that trust just oozing out all over the place.


Mon, 06/27/2011 - 09:32 | 1405134 doesmybuttlookf...
doesmybuttlookfatinthis's picture

Less then 30 million ounces at the comex and you think silver is going take a hit? 

Mon, 06/27/2011 - 09:46 | 1405168 MFL8240
MFL8240's picture

Never stopped the criminals at JP Morgan from naked shorting, so, why not??

Mon, 06/27/2011 - 10:18 | 1405239 SheepDog-One
SheepDog-One's picture

That road isnt an autobahn its a cul de sac.

Mon, 06/27/2011 - 09:37 | 1405157 scatterbrains
scatterbrains's picture

I don't understand..  can't they just print Euros like Ireland did/does ?


Mon, 06/27/2011 - 09:56 | 1405173 ISEEIT
ISEEIT's picture

I was wondering why the EUR just took a 60 pip moonshot. Now I understand!

Mon, 06/27/2011 - 09:12 | 1405095 jkruffin
jkruffin's picture

Gold is going to take about a $100-$200 haircut in a matter of days

Mon, 06/27/2011 - 09:16 | 1405099 GetZeeGold
GetZeeGold's picture


How is gold going to take a haircut if everyone is buying it? Except you of course.

This thing just went total retard.

SARKOZY: French banks will roll over Greek debt for 30 years...



Mon, 06/27/2011 - 09:49 | 1405165 glenlloyd
glenlloyd's picture

yesterday's news

Mon, 06/27/2011 - 10:03 | 1405186 GetZeeGold
GetZeeGold's picture


I can already tell you what tomorrows news will be.....default.

The 50 year old retired Greek sitting on the beach needs to get a job. The French and Germans are done paying his bills.



Mon, 06/27/2011 - 10:14 | 1405233 BobPaulson
BobPaulson's picture

Every society has always had parasites who do nothing. It used to be the church. Don't know how you get rid of them if people don't mind giving money to them.

Mon, 06/27/2011 - 09:18 | 1405100 Jambo Mambo Bill
Jambo Mambo Bill's picture

Silver then is going to what... 18?

Mon, 06/27/2011 - 09:17 | 1405107 Bindar Dundat
Bindar Dundat's picture

Why? I mean that comment does not fit the model....

Mon, 06/27/2011 - 09:21 | 1405123 dbach
dbach's picture

I agree with jkruffin, if there is a liquidity crisis and money is destroyed then cash will be king. I think it's pretty obvious when, as ZH has pointed out, there are treasuries trading at 0%. People want to "not lose money", what better way than to have cash?

Mon, 06/27/2011 - 09:23 | 1405127 SheepDog-One
SheepDog-One's picture

What better way? A vault full of universally accepted gold and silver coins. If people think 'cash' is a stor of value, youre in for some real tough times quick.

Mon, 06/27/2011 - 09:37 | 1405146 dbach
dbach's picture

I understand your concerns about a debt backed money, however if there is less money around then there is less of it to purchase any good, including gold. If money supply increases (thanks Bernanke) then nominal asset prices go up, money supply decreases through withdrawn deposits or default then nominal prices decrease. The only caveat is that gold is a good alternative to paper money, so it would be a lower beta deflation play.

Mon, 06/27/2011 - 09:45 | 1405164 Quintus
Quintus's picture

Think it all the way through.  If there is less money around then all the world's banks will be in the same position that Moody's is warning Greece about.  There may be less of it around, and people may well prize it above all else, but they won't be able to get any because all the banks will have shut down due to there being too little money available for them to keep the doors open.  Where then do people turn?

There is a tipping point where 'Less money available' stops being a plus for those with large bank accounts and becomes a disaster because the 30x leveraged financial institution that is holding their deposits will not survive the liquidity crunch.  Bye bye electronic 1's and 0's.

Mon, 06/27/2011 - 10:12 | 1405214 dbach
dbach's picture

I think if you, rather than buy an oz of gold right now, put the equivilent amount of cash under your mattress, you would be better off in 3-6 months. In 10-20 years is a different question and that will be answered by how we deal with our debt problems.

Mon, 06/27/2011 - 10:16 | 1405246 SheepDog-One
SheepDog-One's picture

Doesnt matter how much money there is when the banks are simply hoarding it in their vaults.

Mon, 06/27/2011 - 11:53 | 1405581 Quintus
Quintus's picture

Not sure about that.  Who's to say the government won't try to save the system by re-denominating the currency into 'New Dollars' or whatever at a 100:1 rate, rendering the pile of old-style FRN's under the mattress totally worthless.

Mon, 06/27/2011 - 09:46 | 1405167 Central Wanker
Central Wanker's picture

The existence of the banking system is nowadays 100% dependent of the existence of inflation. The TPTB will not allow failure of the banking system. To keep the banks "alive", they will allow the failure of the fiat currencies.

Mon, 06/27/2011 - 09:56 | 1405178 pan-the-ist
pan-the-ist's picture

This is THE question.  If TPTB have enough cash, they might let contaction happen to squeeze real wealth (property, gold, etc) out of our hands.  We have to eat.  How evil are your masters?  What do they gain if they allow hyperinflation to happen?

Mon, 06/27/2011 - 10:05 | 1405208 dbach
dbach's picture

Good point. The banks used to get ahead in the 1800's by allowing (creating) waves of deflation to reposses and resell to further indebted people.

Mon, 06/27/2011 - 10:35 | 1405312 i-dog
i-dog's picture

This time IS different! There will be no further crests after this 'wave'.

TPTB are not planning on an economic recovery for the general population of America this time. Have you seen any sign of government recently enacting policies to bring jobs back? Or reduce spending by a meaningful amount? Or develop alternatives to imported oil?

If they succeed in crashing the American economy next year (I think they are trying to prolong the agony until then), then the security infrastructure that is growing daily will immediately be rolled out in full force: DHS, TSA, FEMA, National Guard, state troopers, county sheriff departments, military, mercenaries, and Canadian and Mexican support (under NAFTA/NAU arrangements, already agreed). The 850,000-strong (as of 12 months ago!) surveillance team will also be assisting to nominate candidates for the FEMA camps.

"850,000 Americans Now Have Jobs In Top Security Organaizations and No-one Has Any Idea What They Do (Washington Post, July 2010)"

During a paradigm shift, the rearview mirror is not the best planning tool!

End the Feds!!
End the European 'Experiment'!!
De-fund the IMF!!

Mon, 06/27/2011 - 14:39 | 1406115 Jonas Parker
Jonas Parker's picture

Oh goody!!! We get to go to Camp Fema next summer!!!  [/SARC]

Mon, 06/27/2011 - 12:36 | 1405690 Central Wanker
Central Wanker's picture

In the 1800's they did not have derivatives. Now those modern time marvels would blow the entire banking system up if we entered deflation. Hence, no deflation.

Mon, 06/27/2011 - 10:12 | 1405215 nodhannum
nodhannum's picture

With a fertile farm near the coast of NC (sandy loam), a John Deere and a supply of fresh water some 4 to 5 feet below, the Bernak will have one hell of a time starving me or my heavily armed neighbors out.  I can go 0,25 miles down to our dock on the sound and put some fish nets out..yum, yum.

Mon, 06/27/2011 - 12:46 | 1405714 Almost Solvent
Almost Solvent's picture

The only long term flaw I can see would be the John Deere when it runs out of fuel/oil/hydraulic fluid and there is no more available.



Mon, 06/27/2011 - 10:10 | 1405222 shortus cynicus
shortus cynicus's picture

Money put in circulation stays there, but unfortunately on foreign accounts - China, Switzerland have it all and is not willing to spend it until they are threatened with the only working argument: debt free money counterfeiting printing.

Then they came to their signs and start buying whatever possible in EU and USA allowing us to pay debt back.

Nobody expects Spanish Inquisition inflation.

Mon, 06/27/2011 - 09:31 | 1405133 MFL8240
MFL8240's picture

On what?  People want more fiat junk paper?

Mon, 06/27/2011 - 09:33 | 1405138 Central Wanker
Central Wanker's picture

Gold is going to take about a $100-$200 haircut in a matter of days


That, if anything, would be "transitory". Act accordingly.

Mon, 06/27/2011 - 10:45 | 1405357 Vinny
Vinny's picture

Possible. Platinum took level of fall last week.  Whoever has been manipulating platinum, must have a reason for the desire to lower PM's value. Likely whoever this is, wants to buy it at a lower price. Who?

Mon, 06/27/2011 - 09:19 | 1405102 GeneMarchbanks
GeneMarchbanks's picture

Bank Run! Bitchez



* seriously though, good to see Moodys on top of things. They're an amazing institution unlike the EU and IMF.

Mon, 06/27/2011 - 09:22 | 1405116 SheepDog-One
SheepDog-One's picture

Yes Moodys is Johnny on the spot with Greek and Spanish banks....too bad they COMPLETELY missed the 2008 bank meltdown though.

Mon, 06/27/2011 - 10:13 | 1405218 nodhannum
nodhannum's picture

I think that they went to a revival meeting and caught religion.  That being said, the state will now find something amiss to crush them if they don't play ball.

Mon, 06/27/2011 - 09:19 | 1405103 oogs66
oogs66's picture

Feels like the politicians and bankers are getting desperate to come up with new ways to stick the losses to the taxpayers, but its not working so well anymore.

Mon, 06/27/2011 - 09:15 | 1405106 Gandalf6900
Gandalf6900's picture


excuse me, why are the greek people afraid they will never ever see their precious money again? Isn't the bank supposed to hold your money for you for a small fee and pay you some interest in exchange for the availability to lend that same money...I don't understand what went wrong with this simple formula, is somebody bending the rules and risking other peoples money on foolish ideas, nah I refuse to entertain such a though...greek people your money is safe where it is.....

Mon, 06/27/2011 - 09:17 | 1405111 Gandalf6900
Gandalf6900's picture


run for your life bitchiz, RUNNNNNNNN

Mon, 06/27/2011 - 09:39 | 1405160 Commander Cody
Commander Cody's picture

Sarcasm, or don't you understand fractional reserve banking?

Mon, 06/27/2011 - 09:46 | 1405166 GeneMarchbanks
GeneMarchbanks's picture

i keed i keed

Mon, 06/27/2011 - 09:42 | 1405161 Urban Redneck
Urban Redneck's picture

When you deposit money at a bank, THE MONEY BECOMES THE PROPERTY OF THE BANK and YOU BECOME A CREDITOR OF THE BANK.  The fractional reserve fiat ponzi upon which Greek banks are built is Greek sovereign debt.  Greek people should be very afraid, if they understand basic banking.

Mon, 06/27/2011 - 12:52 | 1405735 Almost Solvent
Almost Solvent's picture

That is why you see that little FDIC sign at every US bank and people *might* understand that means they get back up to the limit, but they don't understand *why* that FDIC insurance is necessary in the first place.

Banks & credit unions can easily go into your account and *offset* anything you owe to that institution if you have stopped *voluntarily* paying that institution.

Mon, 06/27/2011 - 12:59 | 1405758 Urban Redneck
Urban Redneck's picture

But the Deposit Insurance situation in Greece is very different-

Even if Greek individuals move their money out of Greece, Greek employers still use Greek banks for next week's paycheck, and Greek companies use Greek banks to pay for food and energy imports.  Also, an ATM card from another Eurozone country is useless if the local ATMs don't dispense cash or the ATM owners' bank is persona non grata at the BIS.  To backstop against a Greek bank run there is only the HSGF (Greek FDIC, and just as under capitalized), when it runs out of money it can't go to G-Pap and ask him to print some more Euros.  Whoever is PM of Greece will have to crawl like a bitch and beg the ECB for a bailout.  Since the rather pathetic collateral that the Greek banks are currently using for ECB repos will no longer be eligible at the ECB, the terms demanded to put Euros in the hands of the masses after a Greek default would be far more onerous than anything even discussed now.

Default is sounds nice, but Greece is nothing like Iceland or Argentina.  Greece is a member of the Eurozone, and is incapable of devaluing its adopted currency.  Default coupled with an exit from the Eurozone/EU would allow/force Greece to devalue its currency but the resulting hyperinflation will make imported food and energy unreachable to broad segment of the population.  The biggest obstacle is that all the preparations would have to made and completed in secret BEFORE defaulting, and the government in question apparently has difficulty even importing a cleaning crew to spruce up its escape tunnels without spilling the beans.

Mon, 06/27/2011 - 09:20 | 1405108 SheepDog-One
SheepDog-One's picture

But Greece was confirmed totaly FIXED only a few days ago! WTF!! :D

Mon, 06/27/2011 - 09:16 | 1405109 White.Star.Line
White.Star.Line's picture

This is the new age of electronic money.

Just add a few 1s and 0s and fix the fricking problem!

Mon, 06/27/2011 - 09:19 | 1405119 SheepDog-One
SheepDog-One's picture

Yes as prices rise a corresponding amount. Works great, just ask the Bernankster.

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