Greece had a bank run this month as ?6 billion was pulled from local banks. Some will say that's not much, but in the banking world you can loan up to 9x (
Fiat) of your deposits. This means ?50 billion in loans will now need to be covered by other deposits. So if bank runs continue, as they surly will, ?300 billion in loans will need to be covered in the coming months by European banks. Greece already owes 133% of its $305.6 billion GDP with compounding interest that they can't even manage to pay now.
So why do they keep throwing money at Greece? Because Greece is at the point where they owe so much they CAN say fuck it and default, bring back the drachma, and recover (better then now) faster with zero and be in the positive within 10 years or be in debt with the EU for the next 100. It's the same with Spain and Italy, on the cusp where it's actually a faster long term recovery to default, then pay all the money owed. Greece knows this and opted to milk the EU like a 21 year old would, maxing out their CC before filing for bankruptcy.
I said this months ago,
France is the one truly in trouble as far as the EU. France's stock market is minus -50% in the last 5 years and currently trading at 1997 level. This means all their SM gains in the last 15 years are gone. France is the largest shareholder of Greek, Italian, and Spanish debt, plus with a shitty SM, their economy will also collapse by proxy.
The UK is in far more trouble, but they've manage to always pay their interest payments. The UK GDP is $2.25 Trillion as their
external debt $8.9 trillion. The UK GDP yearly gains are 3% as 67% of these profits pay the interest of the debt and not the principle. In short, every British subject owes $143,009 from birth, compared to Americans $47,568.
Although that's bad, other
Europeans are totally fucked.
Luxembourg $3,696,467
Ireland $519,070
Netherlands $226,503
So what does all this mean besides we are all fucked? If Greece says fuck it and defaults bank runs continue all across Europe, banks can't loan money with (9x) fake money, and credit market freezes, production slows, spending slows, job loses, foreclosures, property values collapse, GDP decreases, interest on loans don't get paid, countries default, social services stop, crime increases, civil unrest, and finally a type of Martial law.
Or keep giving Greece money and worry later about the inevitable.