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Greece Blows Up Negotiations – Bank Run Has Started – Some Banks Won’t Be Able To Open On Monday

Secular Investor's picture




 

Varoufakis Brussels

Source

Despite cautious optimism earlier last week about reaching a deal, the talks have suddenly derailed after Greek Prime Minister Alexis Tsipras announced he would organize a referendum in Greece about whether or not accepting the proposal from the three institutions. Strange enough, Tsipras received a standing ovation from his coalition partners when he arrived in the Greek parliament earlier today (see next image)

Tsipras Standing Ovation

Source

This was a huge surprise as this basically was sticking up another middle finger to the European Institutions. By instating a referendum (to be held next Sunday), Tsipras tried to accomplish two things. First of all, he wanted to arm-wrestle the institutions into giving Greece an extension of a few weeks (which obviously didn’t work), but secondly it also looks like he was trying to cover his (political) ass by putting the responsibility of the decision on the shoulders of the (uninformed) citizens.

Indeed, uninformed. Not only have the Greek citizens been influenced by demagogic statements (‘the three institutions only want to humiliate the Greeks (and Greece as a nation) and don’t care about an honest solution that works for everyone’), but on top of that, the question which will be asked at the referendum also isn’t really worded very fair. According to our information, the only question on the ballot will be ‘Do citizens of Greece reject the proposal by the three institutions? Yes/No’ and someone should call Tom Cruise because it will definitely be a ‘Mission Impossible’ to educate the Greek citizens about what exactly the proposal was about.

Even if we ignore the legal aspects of calling a referendum (our sources tell us a referendum can only be called on matters of national security and not for foreign relationships), it wasn’t just the Eurogroup and us who were surprised, the Greek population was also caught by surprise and a new bank run started on Friday night already.

ATM empty

Source

Things only got worse on Saturday as several reports and images have reached us of tens of people are queuing at the ATM’s of the country and ‘several hundred’ (almost 10% of the) ATM’s all over Greece are now empty (see previous image), despite the Greek national bank stating the ATM’s are replenished ‘smoothly’. The Greek citizens obviously don’t trust the situation and if the current bank run continues, we expect some banks to be closed on Monday unless the ECB makes more funds available – which it refused to do on Friday.

Bank Deposits

Source

Something WILL have to happen, and the ECB has called an emergency session on Sunday. If no agreement can be reached before Monday, we expect several smaller banks in Greece will have to keep their doors closed for the public. Pensioners are standing in line to withdraw their entire pension (which was deposited yesterday), and it looks like people will start to hoard cash. It would be very interesting to see some updated numbers on the demand for gold from the Greek citizens

The tension is rising on the streets of Athens and Thessaloniki and if the banks shut down on Monday, the always hot-tempered Greeks could be on the verge of rioting. Several European countries have already emphasized tourists need to bring a sufficient amount of cash money if they plan to travel to Greece, indicating a disruption of the complete financial system is a very realistic possibility.

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Sat, 06/27/2015 - 23:59 | 6243380 Uncle Sugar
Uncle Sugar's picture

The same type of people who wouldn't pay $10 for a 10 oz bar of silver in front of a coin shop.

Sun, 06/28/2015 - 07:55 | 6243696 Arnold
Arnold's picture

Direct deposit paychecks.

Sat, 06/27/2015 - 14:28 | 6241888 somecallmetimmah
somecallmetimmah's picture

OK, for the *rest* of us, remember that old saying, about "not buying until there's blood in the streets"?

Well, get ready. The market is about to become very 'liquid', as they say.

Sat, 06/27/2015 - 12:47 | 6241608 Joebloinvestor
Joebloinvestor's picture

Hey Greece, good luck finding a new tit.

Sat, 06/27/2015 - 15:01 | 6241985 AE911Truth
AE911Truth's picture

Hey Greece, make up your mind. Are you a banker's slave who need banker's money to survive, or are you a soverign that can create your own money? You decide.

Sat, 06/27/2015 - 20:44 | 6242966 ATM
ATM's picture

"Hey Greece, make up your mind. Are you a banker's slave who need banker's currency to survive, or are you a soverign that can create your own currency? You decide."

 

fixed it for you. Money and currency are not the same thing. We have currency whch depends of the collective acceptance of it as a medium of exchange. It is not a store of value so it cannot be "money". 

Sun, 06/28/2015 - 11:47 | 6244473 lunaticfringe
lunaticfringe's picture

Splitting hairs. A dollar isn't a buck sort of thing. We get it.

Sat, 06/27/2015 - 21:40 | 6243101 Elliott Eldrich
Elliott Eldrich's picture

"Money and currency are not the same thing. We have currency whch depends of the collective acceptance of it as a medium of exchange. It is not a store of value so it cannot be "money". "

Exactly right, but one problem: the terms "currency" and "money" have become absolutely equivalent in the mind of the general public, and nothing is going to change that. Goodness knows, I've tried. I'm thinking the best bet is simply to talk about things that contain intrinsic value, like precious metals, versus things that require some entity to back it, such as currency.

Sat, 06/27/2015 - 16:33 | 6242233 NoBillsOfCredit
NoBillsOfCredit's picture

In the US the Banksters create the "money" not the so-called "sovereigna". The truth is that the People are the sovereign and the government is the agent.

Sat, 06/27/2015 - 11:43 | 6241362 Miles Plastic
Miles Plastic's picture

"A spoonful of ouzo makes the medicine go down, medicine go down, medicine go down, as spoonful of ouzo makes the medicine go down in the most delightful way!"

Sun, 06/28/2015 - 11:48 | 6244482 lunaticfringe
lunaticfringe's picture

Never had a spoonful of Ouzo. Never saw the point. I drank my Ouzo in 12 oz glasses.

Sat, 06/27/2015 - 11:56 | 6241411 crazytechnician
crazytechnician's picture

Dont you mean a bucketful of liquefied shit ?

Sun, 06/28/2015 - 23:19 | 6247709 Buck Johnson
Buck Johnson's picture

This is going to end truly bad.

 

Sat, 06/27/2015 - 12:01 | 6241425 Miles Plastic
Miles Plastic's picture

Given that ouzo is flavored with anise, it's pretty much the same thing.

Sun, 06/28/2015 - 00:27 | 6243426 dreadnaught
dreadnaught's picture

we call it "Liquid GOOD 'N PLENTY"-you know-the candies

Sun, 06/28/2015 - 01:57 | 6243508 HYMN
HYMN's picture

Those candies were great ! Can you still buy them some place ? I managed to find "Blackjack Gum" an Smith Brothers Cough Drops but not Good and Plenty candies. Also a fan of Ouzo, Sambuca, and Anisette especially in cookies. Metaxa now thats rough.

Sat, 06/27/2015 - 12:44 | 6241597 Rhal
Rhal's picture

Ouso is an aquired taste, sort of like thinking debt is an asset. 

Sat, 06/27/2015 - 18:23 | 6242549 ebworthen
ebworthen's picture

Usury - the hangover that never goes away.

Sat, 06/27/2015 - 17:22 | 6242355 disabledvet
disabledvet's picture

Once you've "booked the debt" (meaning sold the note and recieved cash) then for all intents and purposes debt is indeed an asset.

Think of the obverse: "imagine running an entire economy without debt"?

Talk about "limiting"...you would in effect have no market for cash.

Would definitely limit the size of Government though!

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