The olive grove harvest. Image source: www.oxfam.org
As a follow-up to yesterday’s post on Greece: the Greeks are doing the one thing that hurts bankers most – they’re turning down invitations to their party.
In my book, ‘The coming first world debt crisis‘ I tried to spell out what actions individuals could take to defend themselves against the predations of voracious lenders.
“After all,” I wrote, “the finance sector depends on us, the world’s debtor-spenders, to come to the ball. We can turn down the invitation. We can decline the credit card, overdraft or loan. We can refuse to dance to Finance’s tune. We can live within our means.”
Well the Greeks have taken the advice, but gone further. They are taking their money out of banks.
According to the FT today, –
“Monthly bank withdrawals (from Greek banks) were running at €1.5bn-€2bn (£1.3bn-£1.8bn) in the first quarter. Last year, depositors withdrew €30bn, equivalent to 12.3 per cent of total savings, according to the central bank. Greek deposits worth an estimated €8bn were transferred to banks in Cyprus in 2010. But the flow has dried up this year amid fears that Cypriot banks could suffer contagion.”
They’re also learning that earning interest effortlessly on money, rather than investing it in productive activity – may not be that rewarding. The FT again:
“Sakis, a garage owner, said at an anti-austerity protest in Athens’ Syntagma square. “A bank collapse has got to be on the cards.” He added he had withdrawn his savings and placed them in a bank safe deposit box “for security. Who cares about interest right now?”
Angelos, a software specialist, bought a neighbour’s olive grove.
“I grabbed the opportunity,” he said. “A year ago I wouldn’t have considered making such an old-fashioned investment.”
Ah….yes, I remember them well: old-fashioned investments. That’s what is going to restore jobs and economic health to Greece.