Christine Lagarde, head of the IMF, warned she was “technically prepared for anything” and said the utmost effort must be made to ensure any Greek exit was orderly. The effect was likely to be “quite messy” with risks to growth, trade and financial markets. “It is something that would be extremely expensive and would pose great risks but it is part of options that we must technically consider,” she said.Raising tensions still further, Germany warned Greek voters that the wrong result in next month’s election will force their country out of the single currency.Greece’s president warned, perhaps most alarmingly, that its banks risk running out of money, posing a “threat to our national existence”.Mr Papoulias said he had been warned by the central bank and finance ministry that the country faced “the risk of a collapse of the banking system if withdrawals of deposits from banks continue due to the insecurity of the citizens generated by the political situation”.
Without a government for the last eleven days, and amid mainstream discussion of a Euro Zone exit, the Greek people are realizing that the economic and political system as they know it is rapidly descending into chaos.With massive jobless rates that have forced many into bartering to survive, and facing credit destruction across the entirety of the country that has led to shortages of critical supplies like life saving medicines, those with any money left at national banks are taking the desperate step of withdrawing as much of their savings as they can from a banking system on its last leg.This is what it looks like when a populace plagued with uncertainty finally loses trust in the credibility of their country’s leadership and financial system.Like the Greeks, Americans will soon hit a breaking point from which there will be no return. When it does finally happen you can be assured that your local ATM’s and banks will be inundated with panicked depositors attempting to take possession of as much of their money as possible.
France's newly elected president and the German Chancellor on Tuesday (15 May) both said they want Greece to remain in the eurozone, even as coalition talks collapsed over the EU-sponsored bail-out and the country is set to hold new elections in June."We want Greece to stay in the euro," Germany's Angela Merkel said in Berlin alongside Francois Hollande. She added that their governments were ready "to study the possibility of additional growth measures in Greece."
Adding to a chorus of politicians and bankers who in recent weeks have spoken about Greece leaving the eurozone, International Monetary Fund chief Christine Lagarde said that the scenario may have to be considered.
"If the country's budgetary commitments are not honoured, there are appropriate revisions to do, which means either supplementary financing and additional time or mechanisms for an exit, which in this case must be an orderly exit," she told France 24.
"It is something that would be extremely expensive and would pose great risks but it is part of options that we must technically consider," she said.
The bank runs that we are watching right now in Greece are shocking, but they are only just the beginning. Since May 6th, nearly one billion dollars has been withdrawn from Greek banks. For a small nation like Greece, that is an absolutely catastrophic number.If Greece leaves the euro, all euros in Greek banks will likely be converted to drachmas, and the value of those drachmas will almost certainly decline dramatically. In fact, it has been estimated that Greek citizens could see the value of their bank accounts decline by up to 50 percent if Greece leaves the euro.So the bank runs that are happening in Greece right now are only a preview of things to come. Before this crisis is over we are going to see bank runs happening all over Europe.
A Greek exit from the euro would not only result in a run on Spanish and Italian bonds, but it would also likely result in a run on Spanish and Italian banks.
If Greece is allowed to leave the euro, that will be a signal that other countries will eventually be allowed to leave as well. Nobody in their right mind would want their euros stuck in Spanish or Italian banks if those countries end up converting back to national currencies.
Sadly, the financial world still seems enamored with the corrupt central banking system that has gotten us into this mess. In fact, one recent poll found that Federal Reserve Chairman Ben Bernanke has a 75 percent approval rating from global investors.
Right now, America is going down the same path as Greece, Spain and Italy have gone. Eventually we will hit a wall and our financial system will fall apart.
We need the American people to understand that the Federal Reserve system is a perpetual debt machine. The U.S. national debt is now more than 5000 times larger than it was when the Fed was first created. It is at the very core of our national financial problems.
When will people wake up and realize that central banking is the problem and not the solution?
When will people wake up and realize that national governments do not have to go into debt to anyone if they do not want to?
In our world today, there is far more debt than there is money.
It is a system that will inevitably crash.
Unfortunately, politicians all over the globe continue to want to be married to our current debt-based financial system.
As a result, we will suffer the consequences of that system.
Israeli war planes staged mockedover Lebanon following concerns Hizbullah might attack Israel if asked by Iran, according to Lebanon’s Beirut Daily Star. Israel has not commented.
The planes reportedly crossed the border late Wednesday morning, diving low several times. The Beirutsaid the planes flew over four cities, including Sidon and Tyre.
An additional cause for concern over a confrontation with Lebanon has been the spillover into the country of the revolution against Syrian President Bashar al-Assad. Thousands of refugees and deserters from the Syrian army have fled into Lebanon, which is dominated by an of pro-Syrian parties and Hizbullah.
If Assad falls, as Israeli leaders predict, Israel could be facing Al Qaeda-linked stirring up trouble near the border at the Golan Heights.