Thanks My Ladies for allowing us to share from your private chatroom.
PrincessDD: A Greek lawmaker reportedly has a team preparing the groundwork for a return to the drachma http://preview.mediaexpress.reuters.com/all?id=tag%3Areuters.com%2C2015%3Anewsml_KCN0PA19X%3A1&search=all%3Adrachma#ixzz3edoZiNkC
How do you change a currency fast? http://www.telegraph.co.uk/finance/economics/11708576/How-do-you-change-a-currency-fast.html
MY LADIES: How do you change a currency – fast?
LET'S TAKE A CLOSE LOOK AT THIS...HOW QUICK CAN GREECE GO BACK TO THE DRACHMA??
The drachma was the world’s oldest existing currency before it was replaced by the euro on January 1, 2001. And it may be about to make a comeback. This Sunday’s referendum is described by European leaders as a vote for or against the euro. If Greece votes “oxi”, the country may soon be looking for a new currency.
Haris Theoharis, a politician in the centrist party To Potami, said: "There's already a team within the prime minister's office, with staff from the general accounting office, right now working on the drachma."
MY LADIES: WELL THEY NEEDED TO BE PREPARED FOR THIS RIGHT??
Has anything like this ever been done before?
Not really. The last time a currency union broke up was the Austro-Hungarian empire in 1918.
MY LADIES: SO GREECE IS SETTING A NEW PATHWAY I GUESS.. NOT SINCE 1918 HAS THIS BEEN DONE.
In an ideal world, any government would want to introduce a new currency with an element of surprise to money rushing out of the country as people seek to avoid a devaluation of their euros.
However, a Grexit, would be no surprise - though there are now capital controls in place to prevent the flight of money out of banks, and out of Greece.
MY LADIES: RIGHT NO SURPRISE HERE UNLESS YOU'RE LIVING IN A CAVE.
Without the backing of the European Central Bank, a new currency would have to be introduced very quickly.
De La Rue, the world’s largest printer of banknotes, said: “Working out the details … is all very well when you have a year or two to think about it. Make that a month or two, and things start to get interesting.”
MY LADIES: OK SO WHAT ARE THE STEPS..LET'S HAVE A LOOK
First you need a design for a note
De La Rue organised the complex operation to replace Iraq’s old currency in 2003-4, delivering the notes 10 weeks after the order was placed.
MY LADIES: SO IRAQ TOOK 10 WEEKS
The company said that this process typically takes a year and a half.
In South Sudan, the company designed, produced and distributed a new currency in six months - an unusually quick process.
MY LADIES: SOUTH SUDAN TOOK 6 MONTHS TO PRINT AND DISTRIBUTE, GREECE DOESN'T EXACTLY HAVE THAT MUCH TIME.... LET'S KEEP READIN
The company declined to comment on any current plans to create a new drachma.
MY LADIES: NO NEWS USUALLY IS THE NEWS
In 2012, the company drew up contingency plans when it looked like there was a possibility Greece might exit the eurozone, and Greek banks have been preparing for an exit of the monetary union for years.
MY LADIES: SO SEEMS GREECE IS PREPARED ALREADY???
In April 2013, designer Pavlos Vatikiotis came up with designs for a "new drachma", featuring portraits of modern Greeks from the arts and sciences, his tongue partially in cheek.
Then you need to print it
For Iraq's new currency, De La Rue printed the banknotes in different location around the world: in Malta, Sri Lanka, Kenya and the UK.
Special paper needs to be ordered, as well as millions of metres of security thread, watermarks, ultra-violet features and any other anti-counterfeiting devices.
Greece has its own facility in Holargos, northern Athens, which can print notes and mint coins.
In theory, this can be used for a new drachma. The ECB said that it has been responsible for printing €10 notes for the whole eurozone.
MY LADIES: ALL RIGHT SO THEY CAN PRINT CLOSE TO HOME.
Then you need to distribute it
In Iraq, the distribution process was complicated by the ongoing war - one of the officials working on the Iraqi Currency Exchange team was badly injured in a bomb attack.
A Greek process would be rather less dangerous – with capital controls, large amounts of money cannot be moved around, and so new currency could be more easily distributed. New laws would have to be enacted, and businesses would potentially have to draw up new contracts.
The Bank of Greece would fix an exchange rate, and Greece would lose access to the ECB.
MY LADIES: SEEMS EASY ENOUGH SO FAR..
But what happens to the money Greece owes?
The country's debts are mostly denominated in euros, and would likely increase in size as the new money is likely to devalue against the old.
Greece would also be unable to print new money to pay it, as its creditors would not accept payment in drachma.
MY LADIES: HUMMM GETTING STICKIER NOW..SO HERE ARE SOME OPTIONS
What are the other options?
A parallel currency
This would be circulated alongside the euro inside Greece to pay for taxes, food and clothing, freeing up euros to pay for debt and create growth. The money would be an IOU issued by the Greek government that could be passed from one person to another.
People would, in theory, be willing to accept the money because it could be used to pay taxes, and Greece would exist in a grey area between Grexit and eurozone.
But this is all in theory - Greeks would naturally be suspicious of such money.
MY LADIES: IT'S TO TEACH OLD DOGS 1 NEW TRICK...NEVERMIND 2
At the height of the Greek crisis of 2010, the Greek government issued a form of domestic bonds to medical suppliers in the absence of cash.
These “pharma-bonds”, as they were known, acted as IOUs from the government and resembled a form of “quasi-drachmas”, according to economists at UBS.
These bonds behaved much like a traded currency and could be deposited at banks as collateral for cash.
MY LADIES: HUMMM I DON'T KNOW ABOUT THAT ONE ANY MORE
THE BEST DECISION WOULD BE
Digital currency….Much easier to design and distribute – but difficult in practice.
Many Greeks don’t have a bank account, let alone a bank card.
The economy is very cash-based, which is part of the reason why so many were able to evade taxes. But if Grexit were to come in a decade’s time – who knows?
MY LADIES: WELL THEY WILL NEED TO LEARN SOON ENOUGH WE ARE GOING TO A CASHLESS SYSTEM ...SOOO..MAYBE GREECE WILL START THIS NEW TREND TOO...WHO KNOWS
PrincessDD: Greek Drachma Plunge Previewed in History of Currency Crises http://www.bloomberg.com/news/articles/2015-07-01/greek-drachma-plunge-previewed-in-history-of-currency-crises
Back to the drachma? Greek lawmaker touches a nerve http://www.reuters.com/article/2015/06/30/eurozone-greece-drachma-idUSL8N0ZG1WX20150630
Grexit to drachma would be dangerous: Larry Summers http://www.cnbc.com/id/102798198
Italy PM says Greek referendum is choice between euro and drachma http://www.reuters.com/article/2015/06/29/eurozone-greece-italy-idUSR1N0YU00P20150629
Should Greece Abandon the Euro? http://www.nytimes.com/roomfordebate/2015/06/30/should-greece-abandon-the-euro
Greece debt crisis: Tsipras in new bailout 'concessions (fresh compromise) http://www.bbc.com/news/world-europe-33345219
Greek debt crisis: Is Grexit inevitable? http://www.bbc.com/news/world-europe-32332221
Greece, Missing I.M.F. Payment, Is Called Effectively in Default http://www.nytimes.com/2015/07/01/world/europe/greece-alex-tsipras-debt-emergency-bailout.html
Sager: The International Monetary Fund has confirmed that it didn't receive the €1.5 billion payment from Athens that was due by the end of June 30, Brussels time, making Greece the first developed country to default on its international obligations. READ MORE: http://on.rt.com/g5ktdv
PR: I Don't really see Greece as a major issue they have had 8 years to kick the can down the road and re spread the risk. Everyone knows Greece will never pay. More manipulation as you see gold go down not up... it should have taken off parabolically already. This is a very well planned event that is controlled behind the scenes. IMF eventually comes in as a savior to Promote the SDR. We Still need to Stop the NEW WORLD ORDER. http://www.bloomberg.com/news/articles/2015-06-29/europeans-rush-to-buy-gold-coins-as-bank-of-greece-stops-sales
PrincessDD: Mary my friend in Spain wanted me to tell you something. They have lived in Spain for 8 years now, and she says that on her mortgage statement and her utility bills, they have always had the peseta (spains old currency) amount on there next to the Euro amount even though no pesetas are in circulation or being used. They never dropped it from the banks although they dont use it. They never understood why there is a peseta amount in addition to the euro. She thinks this is all making sense that they would return to Spains old currency the peseta because it wouldnt be such a big deal electronically if they had to change quickly.
MY LADIES: COULD BE RABBIT...COULD BE...
MY LADIES: [7:15 AM] Princess DD: <<< Greek Drachma Plunge Previewed in History of Currency Crises
MY LADIES: NOW LET'S LOOK AT ANOTHER VIEW OF THIS...
Greek Drachma Plunge Previewed in History of Currency Crises
History doesn’t bode well for a new Greek drachma.
Contemplating Greece’s potential exit from the euro, JPMorgan Chase & Co. strategist John Normand tried to estimate what it would be worth by looking at changes to seven foreign-exchange regimes over the past two decades.
MY LADIES: SOUNDS INTERESTING SO FAR...LET'S KEEP READING
The result is not pretty -- another blow for investors trying to guess how much they might recover of the 40 billion euros ($44 billion) of outstanding Greek bonds and for companies thinking about the business environment under an alternative currency.
Among the changes Normand studied were the end of fixed or managed exchange rates following balances of payments crises in Mexico in 1994, Thailand and Indonesia in 1997, Russia in 1998 and Brazil in 1999. He also threw in Argentina’s 2002 removal of its currency board.
On average, crisis economies saw their currencies slide 55 percent against the dollar in the first year after the rupture and 53 percent two years later.
The biggest fall in the first year was Indonesia’s 84 percent devaluation and Russia won the prize over two years with a 78 percent plummet.
Destined to Depreciate ’
In fairness, Greece’s current account is in surplus and its economy actually grew in 2014, suggesting there is less of a need for depreciation than the other economies studied.
Thailand, for example, ran a deficit of 6 percent of gross domestic product before running into market panic. Normand reckons just allowing for trade suggests a drachma may even be worth the same as a euro at the moment.
MY LADIES: WORTH THE SAME AS THE EURO???? HUMMM I'M NOT SURE ABOUT THAT
Against that, he noted a withdrawal from the euro would deprive Greece of the fiscal and monetary anchors traders need to easily set an exchange rate as well as roiling the economy and commercial environment.
“By this benchmark, the GReuro seems destined to depreciate substantially after its introduction,” Normand said in a report on Tuesday.
“It shouldn’t surprise anyone to see an outcome rivaling the worst performance in the league table.”
MY LADIES: THAT SOUNDS ABOUT TO ME, BUT THE DRACHMA COULD APPRECIATE QUICK ENOUGH WITH THE NEW GROWING ECONOMY GREECE WOULD SEE IN THE YOUNG PROFESSIONALS
TB: Mary, If Greece goes back to the Drachma does it have to be asset backed for the printed currency?
MY LADIES: YES IT DOES, IT HAS TO BE BASEL COMPLIANT
TB: Interesting...can't pay debt but have to have an asset backed currency if they choose the Drachma. Where is the money going to come from?
IQD NOVA: ONE IS THE LONG TERM WEALTH OF A COUNTRY. THE OTHER IS BEING CASH POOR!!
MY LADIES: GREECE HAS GOLD AND THEY HAVE 2 BIG CONTACTS ON THE TABLE, 1 BEING WITH CHINA FOR THE PORT, AND THE OTHER BEING WITH RUSSIA FOR THE GAS
PrincessDD: Things are getting interesting…. So will there be any market fallout from the default news today?
MY LADIES: Italian, Spanish bond yields dip as fresh round of Greek talks eyed
(Reuters) - Italian and Spanish bond yields dipped on Wednesday as investors continued to lay cautious bets on a deal to keep Greece inside the euro zone, hours after it became the first developed economy to default on an IMF loan.
MY LADIES: SEEMS THE MARKETS ARE COUNTING ON A DEBT RESTRUCTURE WITH THE ECB
Italian and Spanish 10-year bond yields were 1 basis point down at 2.29 percent and 2.26 percent , respectively. Portuguese equivalents were 0.6 bps lower at 2.98 percent.
"Whatever the result of the referendum the market thinks at the end of the day there's going to be negotiations because it's in no-one's interest to see a Greek exit," said BNP Paribas strategist Patrick Jacq.
" The market is gradually positioning for a 'yes' at the referendum which to some extent puts the market at risk because nobody knows what's going to happen and the 'no' supporters still dominate when you look at the polls."
MY LADIES: SO THERE YOU HAVE IT....SO FAR NO ONE IS YELLING FIRE!
MY LADIES: Italy sells €6.8bn in debt despite continuing Greek crisis
MY LADIES: THE WORLD IS STILL SPINNING AND MARKETS ARE HOLDING SO FAR
Italian bonds halted a two-day drop and the nation sold €6.8 billion of debt, a sign of investor confidence that fallout from Greece’s financial crisis can be contained.
Italy’s sale included €2.9 billion of 10-year bonds and €1.5 billionof five-year securities. While the bid-to- cover ratio, a gauge of investor demand, was the lowest since December for the longer-maturity bonds, it increased for the shorter-dated notes.
Risk appetite held up well for most of yesterday ,” Peter Chatwell, a rates strategist at Mizuho International in London, said in an e-mailed note.
“We were expecting to see knee-jerk crisis trades getting put on given that a Greek referendum represents a material rise in tail risk, but the market was calm.
Outright longs of the liquid parts of Italian and Spanish curves still look attractive at the current time.
Princess DD: Did Greece just agree to everything they said they would not agree to?
MY LADIES: NO I DON'T THINK SO WHY???
MY LADIES: [9:22 AM] Princess DD: <<< Greece debt crisis: Tsipras in new bailout 'concessions (fresh compromise)
Greece's Prime Minister Alexis Tsipras has offered new concessions to the country's creditors.
A letter to creditors sent by Mr Tsipras says he was prepared to accept most conditions that were on the table before talks collapsed and he called a referendum.
MY LADIES: SO THIS WAS BEFORE TALKS COLLAPSED
On Tuesday, eurozone finance ministers refused to extend the previous bailout.
Germany says a new agreement on a bailout would not be possible until after the referendum this weekend.
MY LADIES: OK SO HERE COMES A WRENCH IN THE WORKS
Human rights body the Council of Europe has said the referendum, which will ask Greeks if they want to accept their creditors' proposals, would fall short of international standards if held as planned on Sunday.
The body's Secretary General Thorbjorn Jagland told AP that the fact the vote "has been called on such a short notice... is a major problem", and criticised the lack of clarity in the question to be put to voters.
MY LADIES: HUMM SO I DON'T THINK HE'S SAYING ANYTHING DIFFERENT, HE HAS BEEN ASKING FOR THIS DEBT TO BE RESTRUCTURED ...AND IF IT CAN NOT HE IS RECOMMENDING THAT THEY LEAVE.
PrincessDD: ok good. Thanks Mary