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Wednesday, June 22, 2011

Greeks Rush to Gold

Courtesy of EconomicPolicyJournal:

In an effort to protect themselves from from the collapse of their banks and government, Greeks are rushing to the only money that governments can't mess with, gold.

Greek citizens are emptying savings accounts and buying gold as they brace themselves for the possibility of a sovereign default and runs on the country’s banks, FT reports.

Sales of gold coins have soared as savers seek a safer and fungible source of value. “When the global financial crisis started, our sales of coins to investors overtook bullion for the first time,” said Harry Krinakis, at Sepheriades, a Greek precious metals trader. “Now the sales ratio has reached five to one.”

Monthly bank withdrawals were running at €1.5bn-€2bn ($2.2bn-$2.9bn) in the first quarter. Last year, depositors withdrew €30bn from Greek banks, equivalent to 12.3 per cent of total savings, according to the Greek central bank.

Take notes, this could be the U.S. down the road.


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