Thanks, Doug. Good articles. Maybe a wee bit of hysteria. I haven't read any other articles that say something like:

The reality of small town living is that while there are some opportunities to grow your own food the job prospects are probably as bad or worse than in larger cities.

Why would they need to move money that is denominated in Euros? I am not sure a new government could just convert them to a new currency like they is possible with Euro denominated Greek sovereign entity bonds.

They could potentially start a new currency, but even that is difficult to make work.

The reality of the PHRASECENSOREDPOSTERSHOULDKNOWBETTER. state is hitting Greece hard, as it is a few other European states. You can only steal at the point of a gun from the productive for so long before the productive realize that it is no longer worth the effort to continue being productive.

The US and Canada are not as far away from this point as we might hope. In the US only about 10-20% of the population are net tax payers. The rest pay no taxes at all, work for or are retired from government (directly or indirectly), or receive government benefits that exceed the net taxes they pay. How do you deal with that situation long term.

The two main fears would be loss of the money in the case of a bank failure and loss of purchasing power through a forced currency conversion.

In the first scenario, bank deposits are guaranteed by national authorities in the EU, but if your national government is broke and starved of Euros, how will you be made whole again if multiple banks fail? Even if you're a die hard supporter of the Euro, your money is gone. So to avoid that loss, you withdraw your Euros from Greek banks and keep them in the mattress or else deposit those Euros in a bank elsewhere, say, Germany, where you feel it is safer. This lack of a central FDIC-type institution is seen as one of the weaknesses of the current EU structure because bank deposits may migrate based on real or perceived weakness in one of the member nations.

In the second scenario, national authorities certainly could forcibly convert any bank deposits into a new currency and is one of main reasons for starting this thread--to observe what actually happens. One day, you discover your bank is closed, the ATM network is shut down, your debit card won't work anywhere and you can't check your online banking account. It's the cruelly festive sounding "bank holiday". Over the next few days or week, your one thousand Euro bank balance could suddenly be converted to one thousand New Drachmas and the banks and ATM machines stocked with new currency.

You can kick and scream all you want but the ATM or bank teller is only going to give you the new currency if you try to withdraw your money at that point. Various capital controls will almost certainly be put in place, such as making it illegal to carry Euros out of Greece (although the authorities will gladly welcome tourists bringing in Euros from outside Greece). The new currency will be worth less than the Euro, so suddenly you have significantly less purchasing power.

It's certainly not an easy thing to do and Greece will break all sorts of contracts and treaties and become an international pariah for a while, but it has happened many times, mostly in places like South America and Africa. It's possible that the government will renegotiate certain obligations and continue repaying them in Euros, primarily from its tourist industry, I imagine. No one knows what the details might be. And let's not forget that all these European countries converted to the Euro not that long ago, so it's not that impractical a thing to contemplate.

It happened in Iceland when they let their banks go bankrupt rather than bail them out and force the bank's debt on the public. Iceland is now one of the fastest growing economies in Europe. It was not fun or easy, but what they did allowed them to clear the books of old debt and start rebuilding.

Greece is not necessarily Iceland.

And they even put the then-prime minister on trial (funny, but not a single banker...)

But Greece is definitely not Iceland. And Iceland was still using its own currency, the Krona. And they are relatively energy independent compared to Greece. Importing energy requires hard currency so prices will be high under a devalued currency (they already are, actually, because they're getting energy right now primarily on credit).

As I mentioned in a post yesterday, regardless of the outcomes of the election, it sounds like keeping the lights on is going to be an issue again very soon after a temporary reprieve.