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And So It Begins – Greek Banks Get Shut Down For A Week And A ‘Grexit’ Is Now Probable

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Greece Financial MeltdownIs this the beginning of the end for the eurozone?  For years, European officials have been trying to “fix Greece”, but nothing has worked.  Now a worst case scenario is rapidly unfolding, and a “Grexit” has become more likely than not.  On Sunday, the European Central Bank announced that it was not going to provide any more emergency support for Greek banks.  But that was the only thing keeping them alive.  In order to prevent total chaos, Greek banks have been shut down for at least a week.  ATMs are still open, but it is being reported that daily withdrawals will be limited to 60 euros.  Of course nobody knows for sure if or when the banks will reopen after this “bank holiday” is over, so needless to say average Greek citizens are pretty freaked out right about now.  In addition, the stock market in Greece is not going to open on Monday either.  This is what a national financial meltdown looks like, and the nightmare that has been unleashed in Greece will soon start spreading to much of the rest of Europe.

This reminds me so much of what happened in Cyprus.  Up until the very last minute, politicians were promising everyone that their money was perfectly safe, and then the hammer was brought down.

The exact same pattern is playing out in Greece.  For example, just check out what one very prominent Greek politician said on television on Saturday

“Citizens should not be scared, there is no blackmail,” Panos Kammenos, head of the government’s coalition ally, told local television. “The banks won’t shut, the ATMs will (have cash). All this is exaggeration,” he said.

One day later, the banks did get shut down and ATMs all over the country started running out of cash.  The following comes from CNBC

Despite a tweet from Greek Finance Minister Yanis Varoufakis that his government “opposed the very concept” of any controls, Greek Prime Minister Alexis Tsipras said later Sunday that he had forced the country’s central bank to recommend a bank holiday and capital controls.

The Athens stock exchange will also be closed as the government tries to manage the financial fallout of the disagreement with the European Union and the International Monetary Fund. Greece’s banks, kept afloat by emergency funding from the European Central Bank, are on the front line as Athens moves towards defaulting on a 1.6 billion euros payment due to the International Monetary Fund on Tuesday.

So what is the moral of this story?

Never trust politicians – especially when a major financial crisis is looming.

All over Greece, people are taking photos of very long lines at the ATMs that actually do still have some cash.  Here are just a couple of examples…

—–

Of course those that were smart enough to see this coming took their money out of the banks long ago.  And even as late as last week, people were pulling more than a billion euros out of the banks every single day.  Without direct intervention by the European Central Bank, most Greek banks would have totally collapsed by now

Customers have been withdrawing money in vast quantities ever since Syriza came to power, fearing that if Greece is thrown out of the single currency their euro savings will be converted into drachma – likely to be worth far less.

In the last week, the sums being taken out have risen to well over one billion euros a day, moved either to foreign banks or stashed in notes under mattresses.

It has been a slow and steady run on Greece’s banks which is now speeding up – for the finish line may well be in sight. Until now, the country’s banks have been kept afloat by €88 billion in loans from the European Central Bank.

So now that the banks are shut down, what happens next?

Needless to say, economic activity in Greece is going to come to a grinding halt.  In addition, very few foreigners are going to want to travel to Greece or deal with Greece financially until this crisis is resolved somehow

An extended bank shutdown and tough capital controls will likely wreak further havoc on the Greek economy by scaring away tourists and chilling commercial activity.

And with Greece unable to borrow from financial markets, and apparently unwilling to strike a deal with the only institutions prepared to lend it money, it will find itself sliding rapidly towards exit from the euro.

When the Greek banks finally do reopen, which of them will still be solvent?

Will some of them need “bail-ins”?

Will account holders be forced to take “haircuts” like we saw in Cyprus?

For the moment, what we do know is that the banks will all be shut down until at least July 6th.  Greek Prime Minister Alexis Tsipras has called for a national referendum to be held on July 5th.  The Greek people will get a chance to vote on whether or not the latest creditor proposals should be accepted.  But the funny thing is that Tsipras and the rest of Syriza are already encouraging the Greek people to vote no

Greece’s parliament has voted in favor of Prime Minister Alexis Tsipras’ motion to hold a referendum on the country’s creditor proposals for reforms in exchange for loans, the Associated Press reported. Tsipras and his coalition government have urged people to vote against the deal, throwing into question the country’s financial future.

The vote is to be held next Sunday, July 5. It has raised the question of whether Greece can remain in Europe’s joint currency, the euro.

So why hold a referendum if you just want everyone to vote no?

It is because Tsipras does not want to solely shoulder the blame for what comes next.  A “no vote” would essentially be a vote to leave the euro and go back to the drachma.  The following comes from the Daily Mail

Should Greeks vote against the new bailout, most economists believe Greece will be forced to quit the single currency and return to the drachma. The country could even eventually be forced out of the EU, though Greek politicians have long argued a Grexit would not be the automatic result of default.

However, next week’s referendum is likely to be billed as, in effect, an in-out vote on the euro.

If Greece does default and ends up leaving the euro, the short-term economic consequences for Greece will be catastrophic.

But the rest of Europe will feel a tremendous amount of pain as well.  In fact, we are already getting a sneak peek at coming attractions.  As we approach Monday morning in Europe, Asian stocks are crashing big time, and European futures are absolutely cratering.  It should be very interesting to see how Monday plays out.

In addition, the euro is already way down in early trading.  If Greece does ultimately leave the euro, the value of the euro is going to plunge like a rock.  As I have warned repeatedly, the euro is heading for parity with the U.S. dollar, and at some point it will drop below parity.

And once Greece is out, everyone is going to be speculating who the “next Greece” will be.  Expect bond yields for Italy, Spain, Portugal and France to go skyrocketing.

Just a couple of days ago, I issued a red alert for the second half of 2016.  We are entering a period of time when the global financial system is beginning to unravel.  Most people still have a tremendous amount of faith in the system and assume that those running it are fully capable of keeping it from collapsing.  In fact, many have accused me of being crazy for suggesting that the global financial system is in imminent danger of imploding.

A very wise man once said that “pride goeth before destruction”.  Our arrogance and our blind faith in the fundamentally flawed systems that we have established will contribute greatly to our undoing.

Events are starting to accelerate greatly now, and it is just a matter of time before we see who was right and who was wrong.

 

  • Enrique R. DéZuardí

    How can a Grexit.affect.the U.S?

    • Prepper1

      Our banks loan money too, everything is tied together in the markets ,once Greece exits ,euro will be affected thus we will be affected also

    • Max

      I believe the U.S. funds the IMF in large part, much like the U.S. funds the UN. So any exposure the IMF has in this crisis would essentially be a large tsunami heading our way quickly. So Greece owes roughly 350 million Euros. The IMF is exposed to about 2.5 TRILLION Euros in derivatives to the Greece crisis. If Greece goes under those derivatives get called on, and no one has that kind of liquitity to offset 2.5 trillion Euros. This is like a U.S. Lehman Brothers moment. This can get bad real quickly. We will know too when other markets can’t open. If other markets can’t open, buckle your seat belt.

      • none

        We could just have the IMF give Greece a few trillion.
        In secret loans.
        Then Greece could join Russia in the natural gas deal they’re negotiating. In order to finance the new economy.
        Problem solved.

        • Nemnor

          This would only be a TEMPORARY solution. 2 years, 5 years, 10 years form now the economic situation in Greece and the World over, will be worse then it is now.

          There is actually NO real (permanent) solution within the current economic system in Greece, in the USA and in virtually any other country in the World.

          The real (permanent) solution begins with a fundamental change away from the current world-wide economic system.

      • Goldfinger

        Should be 350 BILLION euros.

      • Enrique R. DéZuardí

        Good explanation…

      • Jerry

        Max,
        You state, “The IMF is exposed to about 2.5 TRILLION Euros in derivatives to the Greece crisis. If Greece goes under those derivatives get called on, and no one has that kind of liquitity to offset 2.5 trillion Euros.”
        Who would the IMF owe it to?

    • antonio

      A printing press in the garage?
      I listened to Paulo Nogueira Batista, a director of the IMF, on RT news. Among other things he said the US was in the fortunate position of being able to finance its debt with the worlds reserve currency. The euro has been Europe’s answer to this. All the other countries are basically being held by the bs…for them no such thing as QE.
      When you strip off the cosmetics, the government of Greece is actually saying ‘The emperor has got no clothes!’

      • Nemnor

        You stated – “…he said the US was in the fortunate position of being able to finance its debt with the worlds reserve currency…”.

        And this is why the USA has murdered and will attempt to murder the leader of ANY weak (non-nuclear) country (or even bomb an entire country back to the “stone age”) that SEEM to be serious about moving away from using the US dollar as a reserve currency.

        However, as the USA continue on it’s relentless DECLINE, the day of the USA is actually “numbered”, as the World will eventually move away from using the US dollar as the World’s (only) reserve currency.

        • antonio

          Noam Chomsky has been quietly stating some of what you say for a couple of decades. Of course he is drowned by the mass media. But side by side with whats going on is a notable absence of critical thinking. People are so tied to their jobs or totally absorbed by social media, there is little time for anything else and when things start unravelling they will no doubt wonder what hit them. Interestingly Paulo N. Baptista is leaving the IMF to head the BRICS bank. So developments are moving ahead.

  • K

    Actually I suspect the referendum has more to do with curbing civil disorder. If the people feel they made the decision, it will curb some of the anger. I have expected this outcome. There is just no overwhelming reason for Greece to stay in the E.U.

    • autofixer

      There is an overwhelming reason to keep Greece in the E.U. and that is to keep the Euro weak. A weak Euro, vs. the U.S. Dollar keeps the German export machine running. I look for Frau Merkel to proffer a solution this week.

      • K

        We shall see. But with tuesday the deadline, and the German stock market down 350 points as I type this. I believe it is just about too late.

      • Goldfinger

        A Greek default won’t weaken the euro?

    • Nick

      Things should be interesting that much is certain.

      • Nemnor

        A Referendum can be seen as an “element” of REAL democracy. I.e. letting the people have a direct say on a very important matter.

        Imagine if the USA had a referendum on IF the USA should invade Iraq, AND, it was first made clear to the US people that there is NO proof that Iraq had WMD. It is likely that the US people will say “NO” to invading Iraq. Hence, the reason the Ruling Class (“the 1%”) does NOT allow real democracy in the USA. – as REAL democracy will really change the USA to the general best benefit of the masses.

        • Gay Veteran

          hey! no war profits without war

      • SunnyFlaSnotress

        Well,well,well..
        It’s been 2 day since Greece defaulted, and Mike’s sky here hasn’t fallen yet.
        Drudge ( Drudgereport) didn’t even make all that splashy a headline about it.

    • Evil_shadow

      MAybe not for greece, but its of great importance for Eu parliament.They wont allow greece to leave EU due to fear of domino effect in other “up to the top of thea head” national debt.IMHO they’ll rather extort them with everything they have. But on the other hand, greece is drowning in debts and having high overpriced monetary currency is just madness.They would be better with their own currency, and still part of EU (for now at least).

  • TTTTTTTTTTTTT

    Hi Michael, small correction. you meant to say “last 6 months of 2015 ” not 16. thanks

    • Suelark

      which is it?

      • K

        2015. 2016 is a typo.

  • FortuneSeek3rz

    Greece is a tiny part of the EU. This is not going to be the domino that brings on the next dark age. There will be some ripples IF they leave the EU, and the U.S. will be largely immune. Contagion will be limited and the sun will come up tommorrow.

    • Nick

      Sure whatever you say genius. Puerto Rico is even a smaller fish then Greece and they are in debt to the tune of $70+ billion. No matter happens to Greece the entire global economy is imploding. China is key and their economy has nothing to do with Greece. But yeah nothing is a big deal in the financial world when you ahole boomers running the country for the last 30 years can kick the can down the road to your grandkids. Pathetic all the snowbirds in the U.S. aren’t being plundered and robbed by the younger generations. I can only hope someday I can afford to own one home let alone a second home in AZ. My comment comes after all these old retirees who have second and third homes retiring in their 60’s while their grandkids are taking out thousands in loans to possibly learn something that will get them a crap paying job in the imploding economy. What absurdity the U.S. Has become. We are a joke! Everything about us screams corruption and weakness. Our leaders are liars!

      • Nemnor

        It is really the economic system itself (i.e. US Capitalism) that is now decadent and is NOT able to generate long-term recovery by economic means alone.

        Corrupt and lying politicians and other “leaders” might do (or not do) things that aggravate an already worsening economic system, but it is the Capitalist system itself that is the main root cause of the worsening socioeconomic situation in the USA and the World.

      • FortuneSeek3rz

        I’m not a boomer. But the boomers can’t help when they were born. So what if they had it better than you? Look at genetics…its nothing but a roll of the dice. So is the time period in which you are born. Regardless, the times we are living in now are the greatest in the history of the world. Some people have better lives than others. We all make the best of it.

  • Manny

    Looks like Puerto Rico is also bankrupt. Also, a major typhoon will head for China, Japan, or Korea in a few days (passing near Okinawa). How will that mix in?

    • Mike Smithy

      Peurto Rico isn’t the only bankrupt U.S. Protectorate. Guam is also bankrupt. GovGuam is 5 years behind on paying tax refunds to the taxpayers.

  • Caratacus

    Small thought – what if the Greek people vote ‘Yes’? … (holding on to nurse for fear of something worse).

    • Nemnor

      If they vote “YES” (and this is a possibility), it is because they FEAR the immediate PAIN they expect a “NO” vote will bring.

      If they go for a “YES vote, it means the Greek people are not yet conscious enough to KNOW that a “YES” vote would eventually mean a WORSE socioeconomic condition for Greece, 2 or 5 or 10 years from now.

      Unfortunately, it SEEMS like most of the Greek people (just like the people in the USA and the World over) are not (yet) aware that – Capitalism itself – is the main root cause of the socioeconomic issues facing Greece and virtually every country in the World.

  • mar1950

    Worried about your banK? Open your own bank. Buy gold and silver.

  • Alwaystomorrow

    The Economic Collapse Blog Has Issued A RED ALERT For The Last Six Months Of 2015

    Published 6/25/2015
    187 days until 12/31/2015.

    For fun, lets do a count down every day until the end of 2015 and see just what happens.

    • wisdomseeker

      Typical troll post! Completely foolish and ignorant of the times we live in!

      • Balambalam

        Yep. He must be a followers of the Assembly of Bullshitology…

        It seems that those trolling idiots still don’t get it. They think that Michael or others WANTS it to happen, – as if it was a game – but nothing is further from the truth.

        They are just warning us so we can prepare, and continue in the meantime to live our life. In that way they show what “Loving your neighbour” means… up to the neighbour to do his part…

        Only morons could find any “FUN” in hoping someone to be wrong.

        • wisdomseeker

          Spot on! Search for Peter Schiff on youtube, people were calling him names because he was one of a few who predicted what was to come in 2008 before it happened…… and then it actually happened! When people like Warren Buffet himself are warning about the current state of affairs, we should have cause for concern!

          “The simple are destroyed by lack of knowledge and pure ignorance”

  • rat28

    Everything will be contained in a week when all CB meetup.CB have learned about all the monetary tools to deal with this small default .This is an excellent opportunity to load up.

  • lincolnlincoln2

    why are they not rioting????? oh, they are not democrats………

    • Vizar

      What? Useless comment. Watch for riots coming when one can’t eat. Party labels can’t be consumed for dinner.

      • df NJ

        People in breadlines are mostly communists. You will never hear anyone in a breadline advocate smaller government!

        • Nemnor

          df NJ, you are WRONG! People who are in breadline and not yet having an all out riot, are mostly people who believe and hope that the current “Capitalist” system will “recover” and work more in the interest of the masses.

          Most of these “breadline” people (who are not yet moved to riot) are PACIFIED by the RELIGIOUS (NOT “communist’) belief put into their minds since childhood.

    • sharonsj

      Actually the Greek people have been constantly protesting in large numbers before the present government was elected. That’s because the bank-imposed austerity resulted in 30% unemployment (50% for young people) and a 30% cut for pensioners. The current government promised to end austerity….

      The biggest mistake of the current Greek government was to repay tens of millions in debt payments to the IMF and ECB, which left the government broke and unable to pay any more. By the way, the loans were because of the 2008 collapse and were supposed to save the banking system–but the politicians had promised to pay back the loan with taxpayer money. Somehow it’s always Socialism for the rich but capitalism for the rest of us.

  • Avner

    You know bail-ins are coming. Pay attention ‘Murica. This is coming here.

    • Pic889

      No, it doesn’t. Because the US government is in control of the printing press, while Greece is not in control of the printing press (the ECB is). The US government will just print and print money to feed those ATMs, while your savings decline in value.

      The Eurozone is also planning to print money (Draghi’s quantative easing).

      Because that’s the WHOLE PLAN: Governments printing money to spend on stupid government projects and to bailout their friends, while your savings lose some of their value and then some more. Anyone who thinks “stong currencies” exist is a fool, the nations are all in a printing mania.

      • Hawkeye

        Oh, another uninformed one who believes governments control central banks, and not the other way around….

  • Genada

    Does anyone know at this point if this vote even matters? They are in default as of Tuesday.

    Even a yes vote is only going to “fix” things for a short time. They can not pay, they will not be able to pay in the future, they must default. It’s the only choice they have, today or in the future.

    • Avner

      If the Greeks continue to vote for their enslavement, you’ll be seeing Stockholm Syndrome in full effect.

      This is a fight, and in a fight, you get hit. Cant’ be afraid…

    • grumpyhillbilly

      Apparently this vote is about keeping Tsipras in power via no vote. Some speculation about him cutting a deal with the Russians on a gas pipeline. Ukraine is becoming too destabilized, and Western Europe needs Russian gas. Russia wants to run a pipeline thru Macedonia, Serbia, and then Greece. Two out of three aren’t in NATO, and a Greek no vote has all three out of the EU. The European wants a pipeline in EU /NATO countries. Hence Brussels wants to scare the Greeks with a non deal in hopes they vote yes.

      • Nemnor

        What you are describing is really a rising tension among the leading Imperialist/Capitalist countries – a tension that can ultimately lead to WW-III.

        You can KNOW that the WW-II is eventually a real possibility when you become aware that the “rise” of Russia or China, etc., DIRECTLY translates to the DEMISE of countries like the USA, Germany, the UK, etc. i.e. MANY must FAIL, so that a FEW might “win”. Such is the NATURE of the world-wide Capitalist economic system (as it has always been).

  • pissedlizard كافر ‏

    Thank you for the link! VERY interesting

  • Rukander

    Printing more money will be the solution, economy now
    isn’t work, it’s printing and easy money.

  • Alex Silva

    There’s something to be noted here: Nothing worked when trying to save the Greek economy because the Greeks never got their act together, they only relied on support.

    This is the result of incompetence on the greek side and wishful think on the Euro side, trying to expand where they shouldn’t.

    Let’s take a look at Spain now.

    • df NJ

      Many Greeks stopped paying taxes because they do not believe in BIG government.

    • Nemnor

      Eventually, it will be more or less the SAME fate for the USA and the rest of the World.

      The root of the problem is the world-wide Capitalist economic system itself – which is now decadent and is NOT able to generate long-term recovery by economic means alone.

  • Grexit kan not happen. The Lisbon Treaty does not permit it.

    Both Greece and the EU knows this.

    EU will probably just buy of some more time over the summer.

    Then in the fall. It time will be in for this shemitah that everyone is talking about.

  • A Friend

    This is a huge problem that is not getting enough mainstream news. Most Americans are not aware of how serious this is and may never understand. Capitalists have turned away from productive capitalism to finance
    capitalism. The creation of fictitious capital instead of real
    capital. Jade Helm 15 is probably our future.

    • df NJ

      It’s not like there will be a shortage of XBoxes. If you want to see rioting in this country all you have to do is cut all the electricity. Holy cow!

      • A Friend

        Quite right.

  • Nemnor

    The REAL crashes (or deepened economic crises) are NOT exactly happening every 7 years, though there was indeed some co-incidences.

    For the past 3 or 4 decades or so, the 7-year cycle “mystics” CHOOSE to see a “crash” every 7 years. However, from since the late-60s/early-70s the world-wide economic system has been in an ON-GOING (never ending) crisis. The “crash” in 2007-2008 was simply a deepened period of the same on-going crisis. AND, the years between periods of deepened crisis (crashes) have been getting fewer and fewer (NO 7-year cycle here).

    For example, there WAS a deepened crisis (“crash”) around 2012-2013 when several countries (like the UK) went into double-deep (even triple-deep) recession. This would be about 4 or 5 years (NOT 7 years) after the 207-2008 deepened crisis.

    Additionally, the SHORTENING periods (LESS than 7 years) of “recovery” between deepened crisis, are increasingly JOBLESS “recovery”, as the relentless DECAYING of the world-wide economic system is getting more and more acute.

    Also, the deepened crisis (“crashes”) within the on-going (never ending) crisis, are definitely NOT controlled or machinated by an elite agenda, as the 7-year cycle “mystics” would have you believe.

    The “crashes” (7-year cycle or NOT) are directly due to the continuous decay of the decadent world-wide economic system.

  • chris

    Good for PM Tsipras. As far as politicians go the ruling coalition seems more trustworthy than those lying corrupt paedophile hiders in the UK, the EU and US. Never trust Central Bankers is what you should have said Michael. Greece was bailed out (and screwed over) not to help the Greek people but to save the Euro and Eurozone, and the IMF and other creditors thought they could make a bit of profit on top as well. Why should Tspiras take the blame for the mess he inherited? Greece needs to default and go back to the Drachma. It will recover quicker that way than having to endure decades of austerity induced depression.

    • Nemnor

      chris, I agree with what you stated (more or less). BUT, this will not be the real (permanent) solution for Greece or any other country in the World.

      As for Michael, while he clearly sees and seems to understand the grave economic situation in the USA and the World, it appears that Michael (and you too?) believe that the root of the socioeconomic issues in the USA and the World is – the lack of the “the rule of law” and/or lack of “free market” Capitalism and/or that we have “turned away from God”.

      However, I posit that the main root cause of the issues facing the USA and the World is – the current decadent world-wide Capitalist system itself. That the real solution begins with dismantling Capitalism, and replacing it with a superior and sustainable socioeconomic system that addresses the abundant needs of the “rational” individual (and not just of “the 1%”).

      • df NJ

        Capitalism is fine. The fractional reserve banking system on the only hand has destroyed us. So after Citizen United ruling a private corporation can use any amount of money for an election. In this case, a private corporation called the Federal Reserve which has a monopoly on printing money can print any amount to make sure candidates will get elected that serve their interests. How can any opposition party ever compete with Federal Reserves printing press?

        • Nemnor

          df NJ, when the people who control/run the Federal Reserve and the rest of the Ruling Class (“the 1%’) in the USA, see that people like yourself (who seem to be against the Federal Reserve), say – “Capitalism is fine” or “Capitalism isn’t the problem”they are really amazed at your degree of blindness and confusion!

          To know that misguided people like you exist, give the Ruling Class the “hope” the encouragement they need to VAINLY drag on the system for a while longer. (lol)

          The Ruling Class in the USA and elsewhere are very much aware that it is the Capitalist system itself that is decadent and decaying. Hence, the reason they are vainly trying to save the system from collapse/chaos (and even bring the world to War, eventually, if they think it necessary!)

  • Nemnor

    Michael, you stated – “…it is just a matter of time before we see who was right and who was wrong…”.

    I also agree with you that the USA and the rest of the World (in general) are heading towards economic collapse/chaos.

    However, there are those who (while being aware that the USA, etc. are indeed heading towards economic collapse) seem to believe that the real solution is getting back to “the rule of law” and getting back to the “free market” Capitalism they imagine (believe) existed in the past.

    I posit that the REAL (permanent) solution for the USA and the World begins with a fundamental change away from the current decadent world-wide economic system (which is essentially a Capitalist economic system – “free market” or not).

    Simply getting back to “the rule of law” and to “free market” Capitalism would NOT and can NOT be the real (permanent) solution, as it was the very SAME “free market” Capitalism (or what ever form Capitalism had in the past) that naturally and inevitably decayed into the current decadent world-wide economic system we have today.

    Though the World experienced some “impressive” advances during the rise of Capitalism, the progressive stage of Capitalism is now long gone, and the system is now NOT able to carry the Human Race into a future with TRUE abundance for every “rational’ individual. It is now long over due for the World to dismantle Capitalism, and replace it with a superior and sustainable system that addresses the abundant needs of the “rational” individual (and not just of “the 1%”).

    Hopefully, we all would live long enough to see and KNOW that I was right all along, about what the REAL (permanent) solution for the USA and the World must be (must begin with). However, there is the ever increasing prospect that the system would bring about WW-III (eventually), as Capitalism continue to sink towards total collapse/chaos (through wars, economic collapse and environmental collapse).

  • DJohn1

    So what happens when the Greek default hits the common person in Greece? Pay attention because the same thing will happen here.
    One key is Direct Deposit from your employer to the bank of your choice.
    You then have access to your funds immediately it is deposited.
    Or do you? If there is a bank holiday we are all in trouble because the funds are no longer available to do the basic things like buy groceries.
    And that is happening in Greece.
    Will the grocery take a local bank’s checks?
    In the mid 80s, here in Ohio, a major bank went under. Rumors caused a bank run and people took off work to get there money before the feds moved in and closed the bank.
    In 1988 0r 9 the same thing happened to major banks in Houston, Texas.
    People with homes through the bank could not access their funds to pay their mortgages. The feds came in and closed the bank. The banks continued to operate and foreclosed on a whole lot of people’s property because even though they had money in that bank, it was not available.
    The rules concerning this are still in place.
    Direct Deposit means you cannot change where the money goes immediately. It takes a week or two to process and in the meantime the bank steals your money.
    It was theft in Houston, it is theft in Greece, and it will be theft if it happens in September.
    With all those guns running around in Houston, I am surprised someone did not kill all of them in a rage over their funds and property being stolen, but it did not.
    I do not have the same faith in Greece. And that is the problem that Greek bankers face. If they openly steal everyone’s money, I suggest they high tail it some place else before the SHTF.
    It is very likely that anyone in office right now will not be at the end of this crisis. They have parliament which can shift and throw someone out of office immediately, not 2 years down the road like here.
    Banks since the late 20s have had a reputation for stealing. Every time you overdraw an account they steal money in penalties.
    The entire mortgage system in the US is based on stealing huge sums of money at the front end of a loan. Principal is what you pay the loan back with. Interest is money taken by the bank to administer the loan.
    You repay a typical mortgage back at 5% principal and 95% interest on a 30-35 year loan. So even after 7 years, you are still paying the majority of your loan in interest. Most people move up or down within the first 7 years of a mortgage and sell the property in the process.
    So you may ask yourself why are the banks in trouble?
    I call it deliberate mismanagement for the ulterior motive of stealing more than they are legally entitled to.
    Under normal circumstance, the house gains value at 4.5% typically a year. Since the attack on our finances by government, for government, a lot of people are out of work and can not longer afford the loan.
    Their jobs were sold down the river by people in government and wages are down significantly since they bought the house.
    So not only did they steal from us at the beginning, they now steal the house out from under us when we become unemployed.
    I suspect this same process is happening all over Greece right now.
    The irony is there are more foreclosed, vacant properties out there right here than even these thieves can handle. They are often trashed big time when the owners leave.
    Last year the government stepped in. (They are in bed with the banks.)
    They brought with them resources to renovate the worst of the vacant houses to the tune of 50-120 thousand per house.
    They then attempted to gain their resources back by selling the properties for 20-40% over the market value of the house in question.
    A fool is born every minute. A lot of people bought these houses in a neighborhood where that model sells for 80,000. They paid 105,000 and got a practically new house inside. They will never get more than market value when they go to sell.

    • Nemnor

      You stated – “…The feds came in and closed the bank. The banks continued to operate and foreclosed on a whole lot of people’s property because even though they had money in that bank, it was not available…”.

      And, this is how it has ALWAYS been through the entire history of US Capitalism. I.e. the Government often working hand in hand with the MINORITY private class of people who OWN the means of production and distribution of goods and services, against the mass of the people.

      You stated – “…With all those guns running around in Houston, I am surprised someone did not kill all of them in a rage over their funds and property being stolen, but it did not…”.

      Well… keeping the mass of Americans distracted and pacified, is the PRIMARY purpose/function of the major media networks and much the various religious movements in the USA. The miss-education and misdirection from (most) Religion and the Media in the USA are the main reasons things will get many many times worse than it is today, BEFORE the American masses decide to “rise up” and dismantle the current socioeconomic system.

    • Whisper

      if people can’t get paid from direct deposit, they won’t work for free. Work will stop in two weeks and since 3 out of 5 people or 60% of Americans live paycheck to paycheck, our system will collapse.

  • df NJ

    Hegelian Dialectic: Problem – Reaction – Solution

    “”Today Americans would be outraged if U.N. troops entered Los Angeles to restore order; tomorrow they will be grateful! This is especially true if they were told there was an outside threat from beyond whether real or promulgated, that threatened our very existence. It is then that all peoples of the world will pledge with world leaders to deliver them from this evil. The one thing every man fears is the unknown. When presented with this scenario, individual rights will be willingly relinquished for the guarantee of their well being granted to them by their world government.”

    – Henry Kissinger in an address to the Bilderberger meeting at Evian, France, May 21, 1992.

    (in an address to the Bilderberger organization meeting at Evian, France, on May 21, 1991. As transcribed from a tape recording made by one of the Swiss delegates. )”

    Invasion is coming!

  • Silkroad

    “This reminds me so much of what happened in Cyprus.”

    No, this is entirely different than Cyprus. What happened in Cyprus was imposed from without by the EU. Syriza is trying to prevent the EU from doing the same to Greeks. Hence the shutdown.

  • Maddog

    Michael, Its ironic that you are able to write this article after the abuse you endured from your “red alert”. I know you won’t say it so I’ll say it for you, told you so. Any idiot who is not preparing for a collapse of the west’s economic system to ensure the welfare of their family by now deserves what he gets. Thank you for all you do to provide the information needed to survive the coming chaos.
    Maddog

    • FortuneSeek3rz

      There will be no collapse. We’ve been through the Great Depression and now the Great Recession. Last I checked the U.S. was still open for business. And the dollar is much stronger today than it was even a year ago.

      • Maddog

        Michael bases his predictions on economic data, I am basing mine on knowledge of who Obama and minions are. With that I can all but guarantee I will be found correct. Good luck.

        • FortuneSeek3rz

          The U.S. is Obama proof. Look at the dollar soar!

          • Maddog

            Today the market closed down nearly 350 pts. Like I said, good luck, unfortunately unlike Michael I am no longer attempting to save other sheeple from their sleep and destruction. My charity will be extremely limited after the fact as well. Safe than sorry may fit here. Gotta go, best wishes.

          • FortuneSeek3rz

            The Dow is up 250% since May of 2009. Back then people were preaching doom and gloom also. One day does not make an economy.

          • Hawkeye

            Please explain the 97% loss of value of the dollar since the creation of the FedRes in 1914.

          • Maddog

            Now your being ridiculous. What does reality have to do with anything?:)

          • FortuneSeek3rz

            The difference is remedied by the price of goods and services rising as well as salaries. All currencies do this, not just the dollar. However in the last year, the dollar has outperformed every other currency on the planet.

          • Gay Veteran

            riiiiiiiiight, anyone can tell their standard of living has gone down just in the past 10 years alone

          • Gay Veteran

            and most of the increase is due to cheap credit which allows stock buybacks and mergers, it is NOT due to a strong economy

          • FortuneSeek3rz

            Strong is a relative term, and right now the U.S. is the world’s tallest midget. That’s not likely to change anytime soon.

          • Gay Veteran

            you’re avoiding the point:
            most of the increase is due to cheap credit which allows stock buybacks and mergers

          • FortuneSeek3rz

            No, some of it is due to tangible assets such as oil and gas, and the expansion of intellectual property. Cheap credit is a phenomenon of all developed economies at the moment, so that negative trend isn’t unique to the U.S. That’s why the dollar has soared in the last year.

          • Evil_shadow

            DOW is real indicator of country’s economy,finance and overall success, right? I really hope that you are just sarcastic, and you dont believe in that for real….

          • FortuneSeek3rz

            So when Michael speaks of China’s stock market correction that really is no indicator of any financial calamity, right?

          • Gay Veteran

            that’s like saying the high stock market is proof the economy is doing well

      • Nemnor

        A “stronger” US dollar means that the USA is LOSING the “Currency War” that is raging between the leading Capitalist economies of the World.

        It means the USA will continue to see a relative DECLINE in it’s EXPORTS compared to a relative INCREASE in it’s IMPORTS – meaning the USA is also LOSING the emerging “TRADE War”.

        A loss in the “Currency War” AND the “Trade War” means the USA will feel “compeled” to TRIGGER WW-III (eventually), in the hope of preventing the USA from (quietly) sinking into a “third world” state and worse.

        • FortuneSeek3rz

          Wrong. People used to say the dollar was on the verge of collapse. Now they’re saying because the dollar is strong, the US is losing the currency war. Some people will never admit things are good, no matter what the dollar does. The collapse MUST happen!

          • Gay Veteran

            check out our exports recently? yeah, down due to strong dollar

          • Evil_shadow

            i really hope that you’re right, because if you are not.. you are for a rude awakening some day.

  • guest

    The situation in Greece is beyond comprehension. Who kept lending to Greece and why did they keep lending when there was no prospect of ever being repaid? How did the Greek people ever develop the notion that they cold borrow prosperity then protest their way out of bankruptcy? How stupid were they when they apparently failed to understand that they willingly forfeit their sovereignty. Does anyone really believe that Greece will be allowed to walk away from it’s debt? Eventually as the contagion spreads this bump on the road to world government will result in war.

    • df NJ

      Why did the stupid people keep borrowing money when they knew they were never pay it back. I blame the Greeks for being irresponsible. The bankers are innocent!!!!

      • Hawkeye

        Pure clueless delusion.

        • DANA

          Do not show preference in a court of law toward the poor, judge by the same standard you would the rich!

  • Ramcamedd

    Why is no one talking about Puerto Rico’s 73B debt?

    • Mike Smithy

      For the same reason nobody is talking about California’s $500B debt. APATHY.

      • guest

        Or Illinois’ 100 billion. Federal bankruptcy law requires that cities have state approval to file for bankruptcy. There is now a bill being debated in the Illinois legislature to give cities blanket approval to file.

        • Maddog

          Or the United States debt of 200 trillion, that’s with a “T” trillion. Its all nothing but an illusion and a joke.
          I heard Greece was told all they had to do was give up the speedo’s and shave their pits, they refused. Go figure.

  • df NJ

    Tsipras and his family are so dead. US will invade Greece soon.

    • Gay Veteran

      Paul Craig Roberts rightly notes that if the Tsipras doesn’t obey TPTB then he will be murdered

  • A Dodgy Bloke

    it looks like Greece wont be in default tomorrow I read on Zero Hedge and Yahoo news the IMF will call Greece “in arrears”. It looks like the Derivative problem with the banks has not been fixed (after five years). This is just another reason not to take any major institution seriously anymore.

  • Mondobeyondo

    It appears that My Big Fat Greek Nightmare is approaching its climax.

    Should be interesting if Greece actually defaults or not. If they do, it will be Very Bad for Greece, and probably the rest of the eurozone too. Time will tell. I’d hate to be standing in line at an ATM in Athens though. As usual, it’s the “little people” who will suffer the most…

  • Robert

    Some mention that UN troops will be used inside the US for whatever reason they imagine. The UN has no troops. The ONLY reliable troops for any mission are American troops. If there comes a martial law declaration then it will be American troops. Goodness knows there are huge numbers of active, reserve and national guard troops plus enormous numbers of federal, state and local law enforcement to manage the general population. It is a simple matter to control the American population. Control communications, petrol and food and that is all you need. Not hard to do at all. Most Americans are pacifists. They love spectating but they love their “security” more. Just the way of things.

    • Gay Veteran

      “…It is a simple matter to control the American population….”
      yeah, like the population of Afghanistan and Iraq?

  • Douglas M. Green

    No sympathy for Greece here. When you boil it down, they want to continue living beyond their means and they want the Germans to pay for it. Let them default and print drachmas. That is the way it should be.

    • Nemnor

      Douglas M. Green, NO, you are MISTAKEN!. When you “boil it down”, the HARD WORKING Greek people (like HARD WORKING people ALL over, who actually produce virtually ALL the wealth in the World) are really seeking the ABUNDANT life – a life which the Capitalist system is structured to allow MAINLY for “the 1%”, and to a lesser degree, to the “upper middle-class” in the Capitalist system.

      People everywhere are really seeking, NOT only to survive, but to live the ABUNDANT life. The Capitalist system can NOT allow abundance for every “rational” individual – as the Capitalist system will then simply ceased to exist, being as it is, a system that is based upon the exploitation by a MINORITY class (“the 1%”) of the MAJORITY of the people (the masses).

      For the past 500 years or so, the World experienced the rise of Capitalism, and then the sinking of Capitalism into it’s current decadent stage. During that 500 years, a genuine alternative to Capitalism was NOT allow, as the leading Capitalist countries (like the USA) did everything in their powers to prevent any country (or even a group of countries) from having a fundamental change away from Capitalism.

      Again, what HARD WORKING people the World over are seeking is – the ABUNDANT life – which “the 1%” in Capitalism seem to have the EXCLUSIVE rights to.

      Unfortunately, it SEEMS like most of the Greek people are not (yet) aware that, the main root cause of their economic woes is – decadent Capitalism itself.

    • Nemnor

      People are NATURALLY seeking the ABUNDANT life.

      It is really RELIGION and other debilitating “philosophy” that are trying to brainwash people into accepting a little, into being “satisfied”/”happy” with just enough to survive, as their minds are made to “focus on Jesus” or “on Allah”, etc., or “think of storing up their treasures in Heaven”, or on the “coming kingdom of God”, or think of an abundant life in Heaven AFTER they leave this life!

      • Maddog

        Hay dip $@#%, heaven doesn’t cost anything. Ever heard “you can’t take it with you”. Maybe the religion of consumerism and greed has something to do with it. Or maybe if it feels good play with it ideology. No, of coarse it’s the moral laws of God that is the cause. Wake up and smell something, anything.

  • Jerry

    The bail-ins and bail-in plans apply to uninsured deposits and bondholders only. These bail-in plans specifically state that insured deposits are protected. It is very important for any government to protect insured depositors for obvious reasons. Iceland and Cyprus did just that. The U.S. will print “money” before one penny is taken from insured depositors. Uninsured deposits today, just like they always have been, are at risk.

  • Nemnor

    They will try to do everything they think they can to prevent the decadent world-wide Capitalist system from sinking too fast. Nevertheless, the system will continue to decline towards total collapse/chaos.

    They would find ti difficult to simply allow the system to “die quietly”, and allow a superior alternative system to replace the OLD and DECADENT Capitalist economic system.

  • larrythelogger

    Referendum? Really? How? From ZH today:

    According to Germany’s FAZ, “the Greek Court also estimates that the referendum will cost around 110 million euros, according to a well-informed policy analyst. Money that in view of the strapped Greek Checkout simply will not be there, even if the country saves a EUR 1.6 billion full-scale default to the International Monetary Fund this Tuesday.”

    Furthermore, the Athens Chamber of Commerce added there is no paper to print some 20 million requred ballots!

    Like Rickards said, there’ll be some form of an extend and pretend can kicking deal because the deception math has to keep working to prevent any credit default swap domino from falling.

    All that said, the fascinating thing about all this is how the fake markets crash and tumble, the VIX goes stratospheric, etc when truth hits the world financial institutions. When another deception and lie is created by our Fed, the Troika, you name it, then the the fake markets breathe a sigh and world stocks continue to climb. Amazing how the world is comforted by the lies and deception and threatened by truth and honesty, but then Romans 1 says that’s exactly what would happen so it’s really no surprise.

    • df NJ

      I like how the news reports say “German tax payers will not be happy” in response to a Greek bailout. Too funny. Yeah, as if the taxpayers are the real power in the World.

  • VigilanteCaregiver

    Well, socialism is EXPENSIVE.

    • df NJ

      Corporate monopolies are MORE expensive. A private corporation called the Federal Reserve has a monopoly over the creation of money. Since the Citizens United ruling a corporation can donate any amount of money to political campaign. Now the Federal Reserve can print all the money they need to make sure candidates favorable to their agenda get elected. How can labor unions or anyone else ever raise enough money to compete with the Feds printing press?

  • GetReal4U2

    Events are starting to accelerate greatly now, and it is just a matter of time before we see who was right and who was wrong.
    get ready…September approaches quickly…

    • Gay Veteran

      October approaches quickly

  • the worlds only superpower has now become just a power just another power. the American Empire is no more. Russia China India South America and the Muslim world are the new axes or the new allies take your pick. they are all ganging up on America and our circle of friends is shrinking.
    for more information Google founder church

    • df NJ

      We are not a superpower. We are a super-debtor. There’s a difference.

  • Sandbagger

    “As I have warned repeatedly, the euro is heading for parity with the U.S. dollar, and at some point it will drop below parity.”

    Lindsay Williams said when you see the euro collapse (drop below parity), you can expect the dollar to follow within two weeks. Get your cash now while the ATM’s have short lines!

    • df NJ

      As soon as the Chinese Yuan is allowed to freely float against the dollar ALL our CEO jobs will be outsourced. Then the sons and daughters of privilege will have to grovel at the feet of the communist Chinese. Oh well, too bad. Nothing worth dying for!

      • SodThat

        Get real Commie China is imploding too, they have huge problems and fear an uprising.

  • df NJ

    More importantly, does anyone care about Puerto Rico.

    If they default on their debt at least they will have lots of fruit, fish, and rum to eat.

  • Randy Townsend

    A return to the drachma will doom Greece – what nation in the world would loan that country anything? They have no natural resources and no ability to pay debts they already owe.

    • Gay Veteran

      they need to default on the debt, solves most of the problem right off

  • LWZRGHT

    Michael, your article is an excellent summation of the goings on to the date of this post. It may not be a great analogy, but this week has kind of been the eye of the hurricane for Greece, and the storm continues to gather strength as the eye passes over. Part of me loves that finance and economics is in the news, and part of me really really hates it.
    There are lots of lessons, but mountains of government debt causing mountains of pain later is probably the best moral.

  • MargfromTassie

    Moron. Go away.

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