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Thread: Banks Still Alive - Why?

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    Default Banks Still Alive - Why?

    Pardon my ignorance, Im a layman and not an economist.

    Its dawned on me that my doom predictions for the banks over the last year have thankfully not come about.

    Ive got it wrong. They have not collapsed.

    Keeping my first line in mind, can someone with greater knowledge than myself explain how there has not been a run on the banks given the following:

    Roughly 1,000 Billion owed by the country between public and private debt.

    The State is taking on 50 + Billion of bad loans racked up by banks/developers.

    The State which is running massive budget deficits saying it can guarantee your deposit.

    Shrinking Tax take and soaring unemployment & outward migration.

    So why is there still between 80 ~ 180 Billion on deposit with Irish Banks (Depending on which figure you believe)?

    On the face of it you would think that leaving money on deposit with a bank that is only existing due to a guarantee made by a bankrupt government is not guaranteed at all.

    Have I been way off the mark, or is a run on the banks inevitable?
    Alexander Suvorov: "The bullet is a fool, the bayonet is a fine chap."

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    Politics.ie Member Squire Allworthy's Avatar
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    The state has made itself liable and has guaranteed the deposits and more besides.

    So the question becomes much more interesting, how will the country fair?

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    Politics.ie Member roc_'s Avatar
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    (a) Think of the facts of the situation as it really is - the figures as they stand; the opinions of properly detached economic observers who have done their time in economic science; the historical precedents of countries who have experienced similar economic and social phenomena as us; the bent of the ruling politicians and big business who are symbiotically intertwined and whose intentions are quite clear to most independent thinking people...

    (b) Now think of how our media apparatus communicates this situation, and the pictures and 'facts' and accompanying emotions that forms in the mind, on account of the manner in which it transmits to our minds this situation.

    Scary, huh? - It's a modern form of totalitarianism. We inhabit a world that is removed from reality on account of it.
    Words are animals, alive with a will of their own.

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    The banks are alive for one reason.

    Spinless Irish people who bend over backwards whilst their government shovel`s our money into their greedy vaults.

    And to top it all off they now want to start evicting us from their homes.

    Que - Are sure, what can we do about it.

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    Quote Originally Posted by roc_ View Post
    (a) Think of the facts of the situation as it really is - the figures as they stand; the opinions of properly detached economic observers who have done their time in economic science; the historical precedents of countries who have experienced similar economic and social phenomena as us; the bent of the ruling politicians and big business who are symbiotically intertwined and whose intentions are quite clear to most independent thinking people...

    (b) Now think of how our media apparatus communicates this situation, and the pictures and 'facts' and accompanying emotions that forms in the mind, on account of the manner in which it transmits to our minds this situation.

    Scary, huh? - It's a modern form of totalitarianism. We inhabit a world that is removed from reality on account of it.
    Scary indeed, I wonder if people thought of their money as having been given for safekeeping to a terrible businessman being guaranteed by a drunken endebted gambler would they feel so confident. I only leave pocketmoney in their at the end of each month.
    Salary paid in - outgoings covered - remainder withdrawn. But leaving money on deposit? No Way
    Alexander Suvorov: "The bullet is a fool, the bayonet is a fine chap."

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    Quote Originally Posted by Squire Allworthy View Post
    The state has made itself liable and has guaranteed the deposits and more besides.

    So the question becomes much more interesting, how will the country fair?
    Run on Banks = State Collapses?

    No Bond buyers = Banks Collapse?

    I keep think Im missing something, I cant figure why theres that much money on deposit if its security is so uncertain.
    Alexander Suvorov: "The bullet is a fool, the bayonet is a fine chap."

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    I know two events are never the same, however some of the similarities between the corruption, cheap credit, ties to a strong currency, debt and difficulty with repayment leading up to the Argentine crisis have uncomfortably familiar echoes. Like all crises or disasters it’s a pattern of weaknesses & failures in the overall system which leads to collapse, never a big bang. I’m sure this is far from the definitive version, as many will probably point out, however it gives a good idea of the trip, the fall & how they dusted themselves off & got back up and running again. We’ll have our own entry in a few years, I’d say the current one has been written a bit too soon.
    http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999%E2%80%932002)

    And for the day that’s in it…. GO ON IRELAND!
    "I was much further out than you thought
    And not waving but drowning"
    Stevie Smith

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    Quote Originally Posted by lonemother View Post
    I know two events are never the same, however some of the similarities between the corruption, cheap credit, ties to a strong currency, debt and difficulty with repayment leading up to the Argentine crisis have uncomfortably familiar echoes. Like all crises or disasters its a pattern of weaknesses & failures in the overall system which leads to collapse, never a big bang. Im sure this is far from the definitive version, as many will probably point out, however it gives a good idea of the trip, the fall & how they dusted themselves off & got back up and running again. Well have our own entry in a few years, Id say the current one has been written a bit too soon.
    http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999%E2%80%932002)

    And for the day thats in it. GO ON IRELAND!

    OK, I can see from that that a government solution to our problem might be to freeze your account deposit while it leaves the Eurozone and starts paying you worthless crap punts. etc etc IMF etc etc etc.

    Thats all the more reason for a run on the banks, no?
    Alexander Suvorov: "The bullet is a fool, the bayonet is a fine chap."

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    Default Banks are still going

    Quote Originally Posted by absconded View Post
    Pardon my ignorance, Im a layman and not an economist.

    Its dawned on me that my doom predictions for the banks over the last year have thankfully not come about.

    Ive got it wrong. They have not collapsed.

    Keeping my first line in mind, can someone with greater knowledge than myself explain how there has not been a run on the banks given the following:

    Roughly 1,000 Billion owed by the country between public and private debt.

    The State is taking on 50 + Billion of bad loans racked up by banks/developers.

    The State which is running massive budget deficits saying it can guarantee your deposit.

    Shrinking Tax take and soaring unemployment & outward migration.

    So why is there still between 80 ~ 180 Billion on deposit with Irish Banks (Depending on which figure you believe)?

    On the face of it you would think that leaving money on deposit with a bank that is only existing due to a guarantee made by a bankrupt government is not guaranteed at all.

    Have I been way off the mark, or is a run on the banks inevitable?
    The banks are still alive because the two Brians are looking after there mates in the banks and Galway tent.

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    Quote Originally Posted by absconded View Post
    OK, I can see from that that a government solution to our problem might be to freeze your account deposit while it leaves the Eurozone and starts paying you worthless crap punts. etc etc IMF etc etc etc.

    Thats all the more reason for a run on the banks, no?

    It's certainly one scenario, a pretty doomsday & scary one at that. I'm one of those who has a (very) small few quid in the bank & I've decided to research the options on getting some of it out of here. It appears a couple of UK banks may offer some options, including euro accounts, I really haven't enough information on these yet. They appear to be more holding accounts with poor interest rates. Anyone who has advice, please feel free to let us know. Like everyone, the unknown, the fear of the half understood/misunderstood & the constant bad news are making me nervous. It's all jumpy heard stuff and I don't fancy being on the outside.
    "I was much further out than you thought
    And not waving but drowning"
    Stevie Smith

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