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Forget Mattresses, Greeks Are Stashing Their Cash In Cars
As Greek empty their bank accounts at a record pace, waiting for the capital-controlling, bank-holiday-based 'other shoe' to drop on Grexit, devaluation, and drachmatization; they are not stashing their cash in the proverbial mattress. Instead, as The Telegraph reports, there is a slightly surprising sign that Greece is in the classic throes of a bank run (as we saw in Russia last year): car sales jumped by 47% in April.
As we noted when Russia was in the middle of its currency collapse (something that is 'hidden' from view in Greece since there is no way - aside from implications from Sovereign CDS and bond yields - to see the devaluation)...
The dramatic collapse in the rouble in recent days has not triggered outright panic, but it has prompted a rush to change currency and to stock up on durable goods such as furniture, cars and jewellery before they become even more expensive.
And so it is that, as The Telegraph reports, for the last 20 months, car registrations of new and used vehicles has risen...
People living in a country gripped by financial turmoil often worry about the security of their money. If it's in a bank, it can be caught up in capital controls or lost through insolvency. Better, then, to spend it. And the purchase of choice is often a car.
This makes motor vehicle sales a decent proxy for financial turmoil (under some circumstances).
Ordinary Greeks, many of whom are not wealthy enough to hold bank accounts outside of the country, are taking their money of the financial system and spending it on "hard" assets.
In December, when snap elections were called in Greece, monthly car registrations soared by nearly 70pc. Since then, bank desposits have shrunk by nearly 15pc of their total value. Another €7bn left the country in April alone.
During Cyprus's banking crisis in 2013, car registrations increased by nearly a third in 10 months. Many Cypriots rightly feared their unsecured deposits would be at risk from the "bail-ins" of the country's biggest banks.
Cypriot consumers also chose to make their purchases in cash, rather than be tied to financing or hire-purchase deals.
Despite depreciating in value quite quickly, cars are still a handy asset to own because they can be put to productive use - especially if the alternative is just stashing your money under a mattress.
As The Telegraph concludes, there is some cruel irony here also...
German industry is perversely one of the main beneficiaries of the country's banking collapse.
Greek consumers, like many of their fellow Europeans, buy German cars more than any other brand.
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I hope they're doing them up in "Mad Max" style. They're gonna need it. Only those mobile enough will survive. They'll be killing eachother over a tank of juice. The precious juice.
Ok, Ok, maybe that's a little overboard. I'm just a sucker for Mad Max/Road Warrior references.
At the rate cars depreciate it seems like a losing deal.
Nothing wrong with buying a used German car, except for the higher maintenance costs.
On another note, Somebody wash that car.
This isn't Kalifornia.
Nobody needs cars when there are no job to drive to.
They are not for driving. They are for living. I am glad I got my RV when I did.
Welcome to the recovery....
At least some people get it...
https://lh4.googleusercontent.com/-UPlUXWy9wBE/VVLTkRQNH4I/AAAAAAAAhiY/Y...
It's probably one of those many abandoned luxury cars in Dubai.
Cars in good shape if not brand new of more than 100.000 € that get abandoned for no apparent reason and taking dust from sand storm...
GSBB, the reason maybe expat fleeing to avoid prison.
http://www.businessinsider.com/heres-the-real-reason-there-abandoned-lux...
I'm surprised the government didn't use that chart to show how well greece is doing.
They won't depreciate nearly as fast as the newly issued Drachmas will!!
This was common when I lived in South America. Bolivians would take their cash and buy a used car. They could then drive the car across the border to Brazil. Sell the car in Brazil and put the money in a Brazilian bank. You avoided holding weak Bolivianos, avoided carrying cash across a border and actually got a productive use out your money while you held the vehicle. You also got the money out of the country.
Another trick was to go to Brazil, steal a car, smuggle it into Bolivia, bribe an official for papers, then drive the car back into Brazil and resell it back to them.
Too many Americans read survival blog fantasiies about stocking up on beans and 22 ammo to use as barter. They would be better off looking at how people in crap economies get by on a daily basis.
Yep, those aren't cars, they are future mobile homes. I can just see a caravan of Greek gypsies parked in southern France, collecting welfare cash as refugees.....
Makes sense
Should stash it in physical gold instead.
https://www.youtube.com/watch?v=h56UaFEpCOw
Thats great until the "government" comes and takes it from you...
Better have a really good hiding place!
Could do gems or something else. A car just sounds like a bad idea.
Try to get the gold when it's 6 feet under your garden or better 6 feet under a lake (preferably lost in a boating accident).
Aside that, the Bitcoin option and get the fuck out of the country ASAP is a good option too.
Then you run the risk of losing all your gold in a boating accident.
Based on comments here at Zero Hedge that is a very common problem.
This man seems to have a solution to where to stash the cash. I truly fear for the future....
http://www.telegraph.co.uk/finance/personalfinance/comment/11602399/Ban-...
Lost all my shit in the numerous boating accidents around........
Why buy cars when you can buy gold. You don't need a car when there are no jobs to which to drive.
Yea I'll take a 1967 L-88 corvette in cherry red with 50 gold kilo bars to go please!
Fuck that, give me a semi full of automatic weps and 200 kilo bars ha ha.
Let's hope they don't all try to leave the country at once.
Have a septic tank? Put your gold in steelbox and drop in septic tank.
Have a septic tank? Put your gold in a STAINLESS steelbox and drop in septic tank.
FIFY
Closed casket funeral for a fictitious person, who just happens to wiegh as much as your metal stack.
The FBI will routinely search septic tanks when raiding your property. Too many people flush stuff down the crapper, and they will also search for traces of chemicals and explosive precursors.
If you want to learn how to stash items so they won't be found, research how Southerners hid silverware from the yankees when they looted and burned the plantation homes.
Greece should just max out her IMF credit line and then default. Pretty sure better deals await her from Russia or China.
"... better deals await her from Russia or China"
I just don't think that the Russians or the Chinese will be any better than the European Union for the Greeks.
The Greeks just got a free ride from the EU, for a while.
Probably looking for the same from the Russians or Chinese.
Good luck with that!
Cheap housing?
That's what Venezuelans did. Buy imported cars. They will become in short supply and actually rise in price - although the value remains the same. Any time the elites make war on the currency, the crowds will be forced to look for stores of value.
For those that have never had a Euro note in their hands...it's quite strange. Nowhere on any Euro bill does it say what exactly that piece of paper is supposed to be. Nothing about legal tender, nothing about payment instrument, absolutely NADA!
It makes our fiat paper look like gold in comparison!
My fiat paper (well, the electronic version) will be gold as soon as Apmex processes my order...
100 oz silver bricks from APMEX. Silver is seriously on sale.
hey ammo guy, Ag is up $1.30 in two days. How is that "on sale"?
After Pac. Prec. Mtls. failed me twice, I switched to TEXAS PRECIOUS METALS. They have never caused me concern.
https://www.texmetals.com/products/silver-bars/canadian-mint
That just illustrates that a piece of paper, a lump of metal or a bunch of electronic digits are worth exactly what people will give for them.
I'll be the bandit to your snowman freeshitter. west bound and down 18 wheels a Rollin we gonna do what they say can't be done!
tanks vera much, aah be stickin' wid ma' wefare Cadalac...
This is the 'Argentine Solution'. They did the same thing when the government limited other store of value.
Because nothing says "practical" more than a Ferrari or a Lambo.
Oh, yeah..."I get my chickens to market a lot faster than you can mister!"
There's going to be a lot of metal carcasses around after the riots, fire and war. It might be better to get metal that is smaller, easier to conceal and serves as an actual medium of exchange.
I wouldn't exactly think buying a car is protecting your assets. Article didn't mention if the Greeks - while flush with their own money - bought any water, food or other prep items for when the fat lady sings.
Apart from the rapid depreciation, what makes this idea so insane is that Greece has punishing taxes on cars, especially large expensive ones. The annual tax increases in line with engine size (for example a 1.6L engine = 265 Euros p.a.) Insurance is also expensive and you must have it for a full year. you can't take the car off the road for a frew months and pay just part of the annual insurance.Greece is known to be one of the most (possibly THE most) expensive country in Europe to run a car. Add this to the depreciation and it amiunts to a crazy idea. Why not invest in precious metals or jewels instead?
there must not be much there worth investing in if they're doing this.
.... people going to greece for vacation, buying cars because renting a car in Greece is 500 Euro a week almost.
You are actually better off buying a car in Greece and junking it / abandoning it after your vacation than renting one.
you can get a used POS car for like 700 Euros ~ 2000 Euros (depending how fancy you want to be) , if you plan to stay for a month or so it pays off.
3 years ago we stayed for 3.5 months, we bought a used 2004 Toyota Rav 4 for like 5000 Euro (left it to family there as gift after vacation).
To rent a similar sized car/jeep it would of cost us about 7000 Euro at the time, last time we went to Greece we used the same car, so after two vacations it pays itself off easily, couple that with the fact that in Greece the police is friendly, you dont even need car insurance or to update your plates.... we drove for two vacations with no insurance or plates. . .
This is why the idea that Germany can come and setup a dictatorship in greece and tax everyone to death is DOA... there is no compliance for the better part of say . . . . 80% of Greece.
We owe like 4000$ in "luxury vehicle taxes" , we never intend to pay, we have a barn to stash the car in . . . no one gona touch it . . . Greek govt so disfunctional
Cars?
You mean the subway doesn't run to the Albanian border?
You can hide your mattress easier when it has wheels and the door to knock on is always moving - when the tax man comes to knock on that door.
Also if you're poor enough you live in your car your car happens to also be your mattress.
These look like memory foam mattress topper that we use in the bed? I just wonder what sizes of them. Thanks.