Wednesday, May 16, 2012

Do You Have Money Tied Up In Greece?

If so, first off, what the hell is wrong with you. Second, if you do, you may not much longer whether you want to or not, as the banks there are starting to see a run. About $894 million was withdrawn from Greek banks on Monday. That's over 700 million euros. Compare with total deposits of about 165 billion. Which may still sound like a decent supply of money compared with the withdrawls, but remember that when a bank tells you their total deposits, they don't actually have that much money on hand, or even close to it. Remember that a lot of it gets loaned out and invested (or "invested"). The bank depends on having enough money actually on hand to be able to accommodate anyone who withdraws their money. If they can't do that, the bank collapses.

Greece appears to be on their way to self-fulfilling-prophecy themselves out of the euro: talking about the possibility of leaving the euro, mass withdrawls from already-beleaguered banks, and now talk about possible printing of the drachmas Greece got rid of so they could enter the euro.

By the way, it's ten days to go on the book draft, and there's a sprint to the finish line coming up so plan accordingly as far as content. (This post, for instance, would probably be about four paragraphs longer if I wasn't eager to get back to the book.)

1 comment:

Jeremy said...

"Stuck out in Greece...lowest standard of living in Europe."