Official Denial in Greece Regarding "Indefinite Liquidity and Banking Stability"; Is a Worthless Guarantee Twice as Good When Doubled?

Things are really humming along in Greece, complete with an official denial of instability in the Greek banking system.

Please consider Government Doubles Bank Guarantees

State guarantees to Greek commercial banks are to double from 30 billion to 60 billion euros in order to secure liquidity in the market, Finance Minister Evangelos Venizelos told lawmakers in Athens on Monday.

Addressing Parliament’s Financial Affairs Committee, Venizelos said that ensuring the market’s cash flow continues will secure the liquidity of the banking system and safeguard bank deposits.

“The Greek banking system is guaranteed with indefinite liquidity and there is no issue with the stability of the system. This is the case for all eurozone countries,” Venizelos said.

"Official Denial" is Ominous


The concept of official denial comes from British television sitcom, Yes, Minister.

“The first rule of politics,” Sir Humphrey, the wily civil servant in the show, insists is: “never believe anything until it is officially denied.”

In case you missed it please see Eurozone Breakup Logistics (Never Believe Anything Until It's Officially Denied)

The statement by Venizelos "there is no issue with the stability of the system" is an ominous sign. So is the doubling of state "guarantees". The sane thing to do in Greece is immediately pull all your funds from Greek Banks.

For further discussion, please see History Suggests Greece Will Freeze Bank Deposits, Exit Euro by Christmas; Spain and Portugal to Follow Next Year; What's the Rational Thing to Do?

That is not a prediction, it is a statement saying "do not take any chances".

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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