Remember the proverbial run on the bank? Well, that was the norm (or rather the outlier) before governments decided to backstop entire financial industries residing within their territory. As a result, the post-Lehman version of "the bank run" will henceforth be referred to as "the country run" and for an example of one in practice, look no further than Greece. The Guardian reports that investors have pulled a stunning €8-10 billion since the Greek crisis commenced in earnest last November. If true, this is the beginning of the end for the troubled EMU-member country.
"In the last four to six weeks a lot of money has been moved abroad; I've heard extraordinary figures," analyst, Kostas Panagopoulos said.
"People are moving funds either because they don't trust our banking system, want to avoid what they fear will be taxes on deposits or are simply anxious about the future of our economy."
What is ironic is the previously discussed pervasive tax fraud in the country where very few resident actually declare their true income. As a result the implication of these sudden withdrawals on the country banking system is likely exponentially magnified:
While a fifth of the population lives beneath the poverty line, some 20% of Greeks are believed to earn more than €100,000 annually – even if, according to income tax records, 90% declare salaries of less than €30,000 a year.
"Greece has a lot of rich people who are not being taxed properly because there is so much tax evasion," finance minister Giorgos Papaconstantinou, told the Observer. "If you look at the actual numbers, you will see that the number of people declaring over €100,000 a year is roughly 15,000," he said. "I don't think that there is anyone in this country who believes there are only 15,000 Greeks earning more than €100,000 a year."
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I think this will be an interesting year for the American Tax Payer. I talked with a tile installer who has not paid any income taxes in the last six years. Another time I hired a plumber who has decided to "go on the cuff" for cash only work. I got a good deal on having a water heater installed, about half the cost of someone else. The trend on this is increasing every year. Income taxes will be a bigger issue now that the unemployment is high and the funds flowing in to the IRS have taken a hit. Also I noticed some new forms being mailed out by the IRS, which did not seem to be really necessary. It seems they are for extimated tax payments, but I really did not study them yet. I wonder how many people will decide to say "No tax payment this year, hoss, things are just too tight"? I, like many others of course will "file" as usual. Isn't that what we are trained/forced/obligated/required and made to do?
ReplyDeleteThen I can say I am a Tax-Paying American, like always.
I wonder is this the beginning?maybe so.I think it will be really apparent to everyone by May or June at the latest, that it has finally begun,and the truth can be hidden no longer.
ReplyDeleteMoney is a scam.
ReplyDeleteTax is a fraud.
Repeat after me.
Wow, There you are again "Useless Sheep of Armageddon" You are like a bad penny, you just keep showing up. Why do you hate America? Are you Al Qaeda?
ReplyDeleteYet another BLA BLA article which in the big picture does not mean hooey,LMFAO
ReplyDeleteWho cares if Greece defaults? Really, who gives a shit?
@10:02 AM
ReplyDeleteWhy would anybody like the USA? Give me at least one reason. Maybe the reason to like is aggressive policies of the “Peace Prize Laureate” Obama who lied to the voters that as soon as he takes the office he would withdraw the troops from Iraq. With his peace loving intentions he is conspiring a war on Iran while whacking Pakistan with drones on a daily basis? Or perhaps for stacking the Eastern Europe with missiles shield from Iran, while actually targeting Russia. Or may be we should adore the United States for supporting severe anti-social measures in other failing countries but not at home. At home they can print as much cash as they want and extent the unemployment benefits for the second time, while eroding other currencies by printing more of its dollars. Or perhaps we should be thankful to America ready to invade Canada under a false flag attack on Olympics offering “a hand of help” is if the entire Taliban army attacks Canada. So, give me at least one good reason to like America.
11:50 is the kind of typical American who doesn't think before speaking. Thinks that another country's state doesn't affect his own.
ReplyDeleteSad.
@11:50 Greece itself is not that important compared to for instance the other euro nations.
ReplyDeleteThe reasons why Greece is in this mess can be compared with a lot of other countries (even the US, UK, Japan)
A new credit crisis will start with the default of smaller nations (Greece, Latvia). Followed by bigger counties (Spain, Italy) and ending in the core (US, UK). This will take a few years.
I recently watched a documentary with Marc Faber, Jim Rogers and others about the next few years. Predicting all of this.
I would love the post the link, but most of it is in the Dutch language.
I have been helping friends and family do their taxes and for the first time ever, everyone is getting a refund or all the money they paid in back,,, I think the taxman is going to have a rude awakening if he's believing the published figures of robust prosperity... Everyone is like, oh yea, give us our money back you bastards... Uncle Sam needs a hemoriod pillow...
ReplyDelete5:30, in this case they will give out IOUs like in California, so that we don't really get that money.
ReplyDeleteGreece represents 2% of Euro zone economic output. USA propaganda machine is trying hard to make this a world problem when our problems here are so much far worse than Greece.
ReplyDeleteIt's called a domino effect. Since we are a world wide economy and not just each by ourselves like it was before industrial revolutions and trade, If Greece goes down, another country goes down. It will most likely next be here in America that falls next. BECAUSE of our fellow tea party members who are screaming they won't pay taxes. which is EXACTLY what Greece is doing right now, and look where they are headed.
ReplyDeleteAs we have learned in the past, if American stock market crashes the WHOLE WORLD is at stake. Another worldwide depression.
For everyone who comments talking shit about America, your opinions don't apply to this article. The Article is About Greece. wtf!
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ReplyDeletefarmacia on line There are some turn-based games available to play, and I, or other whole grains is good too.
Also, why would I want to get hacking. Hopefully this case will settle that matter once and for a.
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