| Shades of Roosevelt: Greece Safety Box Controls; Cash in Hand is King Posted: 05 Jul 2015 06:38 PM PDT Back in January, I warned Greek citizens to take money out of Greek banks. I also warned not put it in safe deposit boxes. Both comments were dead-on accurate. Greece Safety Box Controls Please consider Greeks Cannot Tap Cash in Safe Deposit Boxes Under Capital Controls. Greeks cannot withdraw cash left in safe deposit boxes at Greek banks as long as capital restrictions remain in place, a deputy finance minister told Greek television on Sunday.
Greece's government shut banks and imposed capital controls a week ago to prevent the country's banks from collapsing under the weight of mass withdrawals.
Deputy Finance Minister Nadia Valavani told Alpha TV that, as part of those measures, the government and banks had agreed at the time that people would also not be allowed to withdraw cash from safe deposit boxes. Shades of RooseveltAnyone recall Roosevelt's Executive Order 6102 outlawing gold? Executive Order 6102 is a United States presidential executive order signed on April 5, 1933, by President Franklin D. Roosevelt "forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States". The effect of the order, in conjunction with the statute under which it was issued, was to criminalize the possession of monetary gold by any individual, partnership, association or corporation.
According to a hoax, Roosevelt ordered all the safe deposit boxes in the country seized and searched for gold by an I.R.S. official.
In fact, safe deposit boxes held by individuals were not forcibly searched or seized under the order and the few prosecutions that occurred in the 1930s for gold "hoarding" were executed under different statutes. One of the few such cases occurred in 1936, when a safe deposit box containing over 10,000 troy ounces (310 kg) of gold belonging to Zelik Josefowitz, who was not a U.S. citizen, was seized with a search warrant as part of a tax evasion prosecution.
In Australia, part IV of the Banking Act 1959 allows the Commonwealth government to seize private citizens' gold in return for paper money where the Governor-General "is satisfied that it is expedient so to do, for the protection of the currency or of the public credit of the Commonwealth." On January 30, 1976, this part's operation was "suspended". Cash in Hand is King Safe deposit boxes were not forcibly opened by Roosevelt, but who knows what is coming in Greece? Regardless, cash in hand is one thing, cash in a safe deposit box under capital controls is another. Gold ConfiscationI receive questions quite frequently asking if gold or silver will be physically confiscated or outlawed as it was under Roosevelt. My short answer is no. And I am quite confident of that answer. Confiscation via a high tax rate on gold sales is more likely. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Overwhelming "No" Vote; The Way Forward; Congratulations! Posted: 05 Jul 2015 02:33 PM PDT Four polls said the Greek referendum was supposed to be " Knife Edge" close. Instead, Greece Heads for Decisive No Vote. With 85 per cent of votes counted, the No camp had won 61.5 per cent and was leading in every region of the country, a remarkable political exploit by Greek prime minister Alexis Tsipras. But it is also likely to plunge Greece deeper into turmoil as it tries to prevent the collapse of a financial system that is rapidly running out of cash.
"As of tomorrow, with this brave 'No' vote, we will call on our partners to find common ground," said Yannis Varoufakis, Greek finance minister.
But the response from Berlin was scathing. Sigmar Gabriel, deputy German chancellor, said Mr Tsipras had "torn down the last bridges on which Greece and Europe could have moved towards a compromise".
"With the rejection of the rules of the euro zone ... negotiations about a programme worth billions are barely conceivable," he told Tagesspiegel newspaper.
In Athens' Syntagma square, No supporters were jubilant at the scale of their victory.
"Now we will be free from the Troika, from Mrs Merkel, from them all. This is the right result," said Irma, a 45 year old civil servant. "I love my freedom. I do not want to keep having that taken away." Congratulations! The fact that all four poll showed 'no' winning was the clue as to which way this would break. Also, and as I commented earlier, Greeks had virtually nothing to gain by voting 'yes' after German finance minister Wolfgang Schäuble commented that further negotiations would be on a " completely new basis and under difficult economic conditions" even if Greeks voted 'yes'. Congratulations are in order. Greece voted against further Troika servitude. The Way ForwardThe good news stops with the revolt against servitude. The way forward requires three items, all of which seem rather unlikely with Tsipras and the radical left in charge. - Reduced public service sector
- Free market reforms (pensions, work rules, ease in firing, ease in starting a business, retirement age, etc.)
- Fair, flat tax system
The only way Greece can quickly recover is if it takes steps along those lines. It's possible, but I highly doubt Greece will come close to doing what needs to be done. Should Greece fail, expect some to gloat "I told you so". They will be right for the wrong reason. Without a doubt Greece can recover much faster outside the shackles of Troika servitude. Unfortunately, there is little reason to believe they will take the necessary steps. At least they have a chance. They had no chance under Troika servitude. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Knife-Edge Greek Referendum; Voting Booths Closed; Four Polls Show 'No' in Slight Lead; Schäuble Campaigned For 'No' Posted: 05 Jul 2015 11:01 AM PDT Greek Voting ClosedVoting in the Greek referendum is now closed. Four independent polls, not exit polls, show the 'No' vote against Troika servitude in a slight lead. The polls are within the margin of error. That all polls show the same direction increases the likelihood that 'No' will win the day. However, there are so many undecided voters, this can go either way. Knife-Edge Referendum The Financial Times reports Polls Close in Knife-Edge Greek ReferendumGreeks cast their ballots on Sunday in a controversial referendum called just one week ago that may determine the country's future as a member of the eurozone.
Four opinion surveys published as the polls closed indicated a narrow lead for the No camp, ranging from 51.5 per cent to 54 per cent. But the margin of error in the surveys — which are not exit polls — was 2-2.5 per cent, leaving the outcome Greece's first referendum in 40 years hard to call.
Greek banks are fast running out of cash. Yannis Stournaras, the Greek central bank governor, was due to call ECB president Mario Draghi on Sunday evening to plead for more emergency loans. The ECB governing council is scheduled to hold a conference call on Monday afternoon to decide on more support for Greece's financial system.
Earlier on Sunday, Mr Tsipras fought through a crowd of at least 100 camera crews packed into a school in central Athens to cast his vote. Addressing the scrum of reporters afterwards, Mr Tsipras said his country had the right to determine its own "destiny" in Europe.
"No one can ignore the will of the people to live, to live with determination, to take their destiny into their own hands," he said, looking relaxed and smiling in an open-necked white shirt with his sleeves rolled up.
Several voters leaving a polling station in central Athens said they were confused by the convoluted, 72-word question, which referred to two technical documents, "the current [bailout] programme" and a "preliminary debt sustainability analysis".
"If you hadn't followed the campaign this past week and just read the question on the ballot paper you would have no idea what the vote was really about," said Aristea, a civil servant in her 40s.
Wolfgang Schäuble, Germany's hardline finance minister, damped hopes of any rapid bailout deal following a Yes vote. Any further negotiations would be "on a completely new basis and under difficult economic conditions", he told Bild newspaper on Saturday. Schäuble Effectively Campaigned For 'No'That Schäuble said any further negotiations would be on a " completely new basis and under difficult economic conditions" even if Greeks voted yes, essentially tells Greeks they may as well vote no. Schäuble has clearly had enough of Greece, even if chancellor Angela Merkel hasn't. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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