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Goodbye Euro, Hello Drachma
A few months ago, when Zero Hedge first broke the news that the Drachma is trading at several major banks on a "when issued" basis at the client's request, it was promptly dismissed. Alas, it may be time to dismiss the dismissal, after Spiegel reports that as one of the scenarios considered for a Greek default, Germany anticipates the reintroduction of the drachma by the pathological liars at the Greek parliament. Yes: the currency that Greece was so happy to jettison 10 years ago when after the assistance of Goldman to hide its bloated debt, to much pomp and circumstance it entered the soon to be defunct Eurozone, is coming baaaaack.
From Spiegel, with the article recreated in its entirety as the implications for the EUR, the eurozone, and crony communism as massive:
German Finance Minister Prepares for Possible Greek Bankruptcy
German Finance Minister Wolfgang Schäuble, who is reportedly doubtful that the country can be saved from bankruptcy, is preparing for the possibility of Greek insolvency. Officials in his ministry are currently reviewing scenarios for handling such a situation, exploring what it might mean for the rest of the euro zone. Under the first scenario for a Greek bankruptcy, the country would remain in the euro zone. Under the other, Athens would abandon the common currency and reintroduce the drachma.
The European bailout mechanism, the European Financial Stability Facility (EFSF), is playing a key role in those considerations. Soon the EFSF is expected to be given new powers agreed to by European leaders at a special euro crisis summit in late July. Two instruments at the EFSF's disposal are at the forefront of the Finance Ministry's scenarios.
Bankruptcy Could Create Credit Crunch
One of these key instruments would be credit lines provided to countries like Spain or Italy if investors stop lending them money after a Greek bankruptcy. If banks were forced to write off the billions in Greek government bonds on their books, they could become reliant on billions in rescue fund aid in numerous euro-zone countries. Both developments are to be expected in a Greek insolvency, regardless of whether the country exits the euro or not.
Volker Bouffier, the governor of the state of Hesse, which is home to Germany's financial capital Frankfurt, is a member of Chancellor Angela Merkel's conservative Christian Democratic Union (CDU) party, as is Schäuble. Bouffier is now urging that the possibility for countries to leave the euro zone be created quickly. Current European Union treaties provide no provisions for a country to abandon the currency.
"If the savings and reform efforts of the Greek government aren't successful, then we need to ask the question of whether we need new rules to make it possible for a euro country to leave the currency union," Bouffier told SPIEGEL.
As for what happens to all the trillions in other interconnected debt, should all Euro bills have to white out the Greek text on then, we imagine the word "prayer" is key.
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crazy.
deleted delete deleted.
Cannot wait to put my euro for sale as collectible currency.
Just going thru my $ stash. Starting by weight, $1 heavy to lite.
1) 1 oz of Gold/Silver
2) 1971 Dollar
3) 1962 Peso
4) 2003 Pound
5) 1987 Loonie
6) 2002 Euro
This should be an interesting week.
Drachma backed by Gold? How Barbaric!
The euro is dead; long live the Drachma!
The euro rises, gold lowers. Crisis over. Boring world we live in.
Hey, amazement, I think you will be a little less bored this coming week...
http://www.ft.com/cms/s/0/905aeb88-dc50-11e0-8654-00144feabdc0.html#axzz...
Let's see how bad the Euro banks fall apart ahead of the coming Moody's downgrade. That coupled with Greece's issues and the total lack of liquidity in the European banking system should lead to a very interesting opening.
Asian markets getting hammered.
Is that Geert Wilders, the guy who wants a religious war against Islam, carrying that drachma note? WTF! He's found a new populist plank for anti-Euro politics.
Mulroney is a crook and he practically ruined Canada, if that was possible after Pierre. However when Mulroney tried to do the right thing and roll back old people's pensions he was almost lynched by the old farts.
If you ever saw a squad of 80 year old black-ops in action, you would shit your paints.
Don't mess with the oldies!
in for a euro, in for trillions of euros. germany and the eurozone cannot let the euro fail. they will come to their senses and burn up the printing press to save the euro while germany takes the entire country as collateral for the bailout. lol
German Finance Minister Wolfgang Schäuble, who is reportedly doubtful that the country can be saved from bankruptcy, is preparing for the possibility of Greek insolvency. Officials in his ministry are currently reviewing scenarios for handling such a situation, exploring what it might mean for the rest of the euro zone. Under the first scenario for a Greek bankruptcy, the country would remain in the euro zone. Under the other, Athens would abandon the common currency and reintroduce the drachma.
The European bailout mechanism, the European Financial Stability Facility (EFSF), is playing a key role in those considerations. Soon the EFSF is expected to be given new powers agreed to by European leaders at a special euro crisis summit in late July. Two instruments at the EFSF's disposal are at the forefront of the Finance Ministry's scenarios.
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Waoooooooo... Another day, another shippment of US cheap propaganda.
So first point, aint it September? Because in the article, it reads like it is not yet late July.
And what is all about? Scenario by German advisors that states that either Greece remains in Euroland or gets out in case of bankrupcy.
The second case involving a return to a national currency.
Waoooo... Speaking about added value.
Cat in the box stuff.
What else could it have been? Can Greece be both in Euroland and out of Euroland? Can Greece be neither in Euroland and out of Euroland?
Can Greece get no currency, back to bartering?
Making much noise from a very conventional scenario that so many people could have written.
Still remains what it is: a very linear scenario.
why are they planning for something which they have publicly said for a year is an impossibility?
Blame the USA for this? Interesting! You don't think the Greeks and the banks that loaned Greece money may have some share of the blame?
This is baseless.
The article is another example of US cheap propaganda.
What does it focus on? On a scenario.
A scenario that is developed in a very linear manner, for a result that could be achieved by high school US citizens. It tells it all.
So:
Greece is a member of the Eurozone.
Greece is in troubles. Troubles could force bankrupcy.
As a consequence,
Case one: Greece stays in Eurozone and keeps using euros.
Case two: Greece leaves the Eurozone. Then can no longer use euros and must switch to another currency that could be drachmas.
In this scenario, no added value. That is just some people addicted to US citizenism who do what they know the best: producing US cheap propaganda.
The professor BEN has a solution....So does L&H
http://www.youtube.com/watch?v=NqaO72AtKig
Holy crap. I thought I respected Wilders until I saw that picture; brown shoes with that beautiful blue suit? Dreadful. Outrageous.
The usual sunday evening "Euro is going to die next week!" BS article from Yanks. How original...you could at least try to put some real effort into these scare articles. Maybe take few courses in fiction writing...
so Tim, are the Germans really going to subsidize the Greeks indefinitely? The majority of Germans are against the idea of a transfer union even if it means the break up of the Euro.
53 percent according to the last poll I saw. Does anyone have a link?
So Topcallingtroll, are New Yorkers ready to subsidize those pesky Californians and Floridians indefinitely? Otherwise the dollar zone will collapse...
The SGP (shadow gold price) per QBAMCO is about $9500. Excellent paper: QBAMCO-YourGoldTeeth2-08-2011.pdf (application/pdf Object)
Calculates $9500 is the current Shadow Gold Price (pre-QE3), discounts future confiscation, discounts future draconian taxes on gold, expects much higher prices for gold, miners now ridiculously cheap, paper gold ETFs bad -- buy the buillon or miners, does expect currency and monetary system destruction.
Speculates possible future formal devaluation of currencies, then re-backing them with gold so banks can all get their credibility back since Mr Bean and his buddies have all fucked up so badly.
On Confiscation: Government would have to declare gold legal tender, which would bring too much attention to gold, influential big money people also own gold (so that won't work), and it's not worth going after the small retail owners. Reverse of 1933, retail owners of gold will be on the winning side of the currency devaluation this time.
Gold Strategy: play along at cheap prices and accumulate. SGP expected to go much higher after more monetization.
Gold confiscation would work fantastic if this was fucking india. But it's not.
At Athens Airport there are some Airbus A-340-300's and 747-300's parked at an empty terminal all taped up andl collecting dust. From the old national airline Olympic Airlines.
It won't take long for the new currency to end up in the same condition.
1 Drachma = 2 ouzos, the new greek currency backed by Gold + The Acropolis + the "Full Fiath and Credit of the Athenians."
And just to pay a tribute to Europe!
http://www.youtube.com/watch?v=qQwuU6Bumg4&feature=autoplay&list=PLB7782...
And just to pay a tribute to Europe!
http://www.youtube.com/watch?v=qQwuU6Bumg4&feature=autoplay&list=PLB7782...
Long the Euro then.
Greece leaves the Euro(and goes BK route), re-establishes Drachmae and partially guarantees their currency with gold reserves(not fully or there will be a run at some point). Bounce back quicker than Iceland.
Of course they would have to get all the rats out of office, too. So obviously this will never materialize.
Crossing fingers for a fire-sale vacation to Greece next year!
Partial backing is non backing.
Either a currency is convertible into gold at a fixed rate or it is not.
If it is not then it is fiat.
I shouldnt be surprised that if one fiat is repudiated another fiat takes its place and claims gold backing even though you cant convert it to gold at a fixed rate.
Claiming partial gold backing is like saying you are barely pregnant
Greece leaves the Euro(and goes BK route), re-establishes Drachmae and partially guarantees their currency with gold reserves(not fully or there will be a run at some point). Bounce back quicker than Iceland.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Excellent. US citizens love pushing others under the bus.
Any gold stock Greece has will be sucked up dry fast by their energy needs. They are energy importers.
Gold/hard currency is nothing different in this regard than fiat, save fiat is plentiful.
Ask the US, they surrendered the gold standard to be able to use their world currence reserve status and satisfy their energy needs.
Don't be short Euro's when they kick one or two of the PIIGS out!!??
Benny prints to drop the USD and the Euro rallys on decreased risk of insolvency ( however briefly ) after expulsion of a debtor country. Greek bond holders get assraped. It could happen.
It's a confidence trade, or lack of. USD is just a risk averse trade but in reality...
Same with UST's.
The EUR has been very resilient due to the BS from the EU/ECB. It ends.
If countries get kicked out they go back to their 'spent' currencies they become further basket case economies. So the whole region will slump. Even Germany/France. Scandivian countries may be ok like Norway, cause they have energy/commodities.
Very much a doomsday trade with China stuck in the middle and I wouldn't be betting on them at all
Nice ordely selling prior to EZ open. ZH is on the money, big news will be Greece going to back to the Drachma. Should sink the EUR further.
Italy will then push to go back to the Lire
...send the FX markets into chaos
oh history what you teach us http://news.bbc.co.uk/hi/english/static/in_depth/business/2001/euro_cash...
Again WWJD. What would Jode do?
http://www.youtube.com/watch?v=iqnMrynpq9U
And following all "logic"...mad cow looks strong on the upside for the day, should explode in the next 5, 4, 3, .... ST 369 and enthusiasm around 376... The EU 9AM always a bitch :P Still, the hellhole starts sucking again at 346
Bite me ECBChinaHelicopterFEDStrongPullbackDrillers :D
And your name is ...... Greece?!
Well, come right this way, Greece. I'd like you to meet, Sydney, Jugdish and Mohammad.
Oh, you've already met. Super! Well then you'll have lots to talk about...
(Apologies to "Animal House"; the scene where Flounder has escaped the "undesireable" pledge corner at the Omega House, only to be lead right back by Neidermeyer)
That comparison being made, Relapse is an unforgiving bitch.
blah blah from Germany, blah blah from ZH
My long term indicators continue to warn of significant USD strength and AUD / NZD / EUR etc weakness and these signals have increased since 2009.
Unfortunately the March 2009 equity lows eventually will be breached.
Updated SP500 monthly chart at blog.
http://stockmarket618.wordpress.com
Oh...I didn't see that gold sell off coming....
....oh wait I did
http://tradeonfire.blogspot.com/
That was SOOOO easy.
Greece will be relocating its corporate offices from the Balkans to Queer Street. And they will only be open a half day on Wednesdays.
Another pull to three five four and Mad Cow then will steady go ...ahh the poetry, the humanity!
This video sums it up in perfectly in a very funny way:
http://www.youtube.com/watch?v=B8pf5K8xNTA
It's X-rated but will make you pee in your pants!!
It is interesting to note how the Greek debt exposure of private banks has evolved in official financial documents :
In a study published by US Census Bureau entitled "wealth, income and power" in 2010, the overall exposure of private foreign banks to Greek sovereign debt was estimated as 252.1 billion USD, as of 2Q/ 2010. In the same table the exposure of Ireland was estimated as 746.8 billion USD, of Portugal as 292.6 billion USD, of Spain as 989.0 billion USD; making an overall exposure of the PIGS in 2Q/2010 estimated at around 2.3 trillion USD .
In march 2011 the Greek exposure shot up suddenly to 350 billion EUros in official EU statistics. And now it is estimated at between 600 and 800 billion EUros!!
So the Greek banking scam is in a class of its own; the banks and politicians have been lying all the time. I think that this run-away statistic for Greece nails the reason why Merkel has finally balked. From what I can gather in the Citi estimates of sovereigns in Euro zone, the Portuguese and Irish exposures have been reduced to below the 2010 statistics above.
Greek salad! And now greek salad dressing!! Drachma tarama and those greek bankers and their political shills should be exiled tp Somalia! Let the people hire a boat with no return tickets!
Vickers is on www.Bloomberg.com -> TV -> Europe.
Aparently a cool new way to avoid all this has been invented. it is called a "ring fence"
sarcasim: It is nothing like glass stegal. it is new and cool!
Its gonna get better. Now Jamie Dimon is gonna get on the bloomberg TV and say that american banks will suffer under the new regs, cause chinese, indian and other foriegn banks are going to take away his market share.
Ya think? you asswipes could have run your casinos any way you want (honest or not) you could have charged enough interest to meet the "goals" of the comunity re-investment act that .gov "imposed" on you.
But no. you thought writing 200 Trillion in derivatives against Ma and Pa's passbook account, thier mortgage on the the old 1000 sq ft farm house and thier standard oil shares .... so that we could build empty McMansions in Vegas was "Gods work".
The chindian banks have not "fooled" us twice already. so we might give them our business. Shame on you Jamie. Go to barry's house and cry on immelt's shoulder. He can help you get some more pages in the tax code to expense your gucci hankercheif.
Greece and Germany are now fighting eachother for €500B on the payment of war damages in The Hague's International Court of Justice.
See it live at http://www.icj-cij.org/presscom/live_original.php?p1=6
Imagine if Germany looses -- BITCHEZ
You can bring back each individual country's currency, but only in "novelty" form... that's the whole idea.
Like Certs breath mints covering the tell-tale signs of the ouzo, "It's two... two... two currencies in one."
Details from Mervyn King on the plan from back in February: http://tradewithdave.com/?p=5310
The trojan horse inside the new and improved drachma: http://tradewithdave.com/?p=6999
Dave Harrison
I like the idiots that say that Greek default will get the others to pull themselves together,
put away the coke and whores and be serious, upstanding countries.
1 debt overhang and austerity lead to destruction.
2 The banks run everything. They'll knock off Greece and then go for the rest of them.
D-uuh. raping countries is the only game in town.
so, banks will go for that until they die or until they kill all their hosts.
so, in this neighbourhood of crazy, corrupt politics and banking, you expect Greece not to lie?
I congratulate them.
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