RANsquawk EU Morning Briefing - What's Happened So Far - 16/05/12

Comments

[dannyboy]

This guy... always really full into it. Makes me giggle every time.

[PR Guy]

CAN ANYONE TELL ME…. what would actually happen to the Euros held in personal bank accounts by your average Mr and Mrs Spiriadolous in the event of Greece suddenly leaving the Euro?

I presume there would be a ‘bank holiday’ announced (actually, there is one in Greece over the first weekend of June!)  then Mr and Mrs Spiriadolous would wake up on the Tuesday morning to find their €1,000 was now worth 50,000 Drachmas and all Greeks would be told to take their Euros to the bank to swap them for new Drachmas (yeah, like that’s going to happen)….

…..but what happens to the digital Euros that were held in their bank account? Do they just ‘disappear’ or is the Greek government effectively swapping them for new Drachmas and they get to keep all the Euros?

I presume in this instance, all Greek banks accounts would be hit (e.g. businesses whether Greek or foreign, institutions, charities, foreign governments?) or would some be immune (e.g. local bank account of a foreign consul)?

I have asked around but seem to be getting different answers from different people. There must be some laws/rules/precedents somewhere?

I presume that if people in other Euro periphery countries saw that peoples' bank accounts in Greece could be forcibly converted and they would lose their Euros it would start a major bank run in those countries as everyone started pulling Euros cash out to keep under their mattresses and it all becomes a bit of a self-fulfilling prophecy?

[Harlequin001]

No. The Greek govt makes the rules and it can change them anytime.

It's as good a reason as any, and as good an example as any as to why you should have some of your assets offshore and outside of your estate.

This is just another example of 'just because you posses it doesn't mean that you own it, or have any rights to the value contained in it.'

Gold in Switzerland for example, would be unaffected.

[zorba THE GREEK]

Or what's more likely, PR Guy, is that Euro periphery countries pull

their Euros out of banks and buy gold instead. That's what TPTB fear the most

because their fiat money game would be over.