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Apr 21

This is What Happens When Governments Fail: Greece Begins Confiscating Cash Held in Local City Bank Accounts.

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Over time, almost every government comes for all money, all freedom, all property, and to kill all who resist. Today’s Greek government is a case in point: for years, Greek politicians have overspent, expanded their jurisdiction, expanded regulations and raised taxes. Now the country is so deep in debt that the central bankers of the European Union are demanding repayment.

Greece has now issued a decree demanding that all local towns and municipalities send all their cash to the central Greek bank for confiscation. The report by Mish Shedlock is here.

This confiscation of local town funds by the Greek central government will cause many towns to default on payments to their city employees. And the central Greek government will soon reach for more funds, including private funds.

And note how markets automatically arise to heal the dumb decisions of governments: Shedlock reports that yields on two-year Greek bonds is now over 28%. Such high rates are indicative that credit in Greece is so hard to come by that those offering bonds must offer to pay exorbitant amounts in exchange for funds.