Greeks are spending whatever they can in a bid to convert their savings into real wealth.

Two years ago Cyprus drained the bank accounts of its citizens to recapitalise its banks (a move known as a bail-in). The Greek government has gone out of its way to silence rumours of a similar move. It has ‘guaranteed deposits’ and quashed speculation for the need of a bail-in.

But after his recent austerity backflip Prime Minister Tsipras has lost the trust of his constituency.

On June 27th Prime Minister Alexis Tsipras announced a referendum on the question of whether to accept or reject the austerity measures imposed on the conditions of further bailout monies. This coincided with the rationing of withdrawals from the banks of Greece; for weeks prior to this Greeks had been withdrawing huge sums in fear of a possible seizure.

At the same time the people of Greece have been paying their taxes. The government needs money with which to repay its borrowings, one of the ways they intended to raise this money was through punitive penalties on tax dodgers.

Now with little money left in the banks the circulation of wealth through the Greek economy has virtually frozen. At the same time, by people paying the government what they owe one of the pillars for raising revenue has been all but stripped from the Greek government. The money for the debt repayments still has to be found, and so it appears a ‘haircut’ of bank deposits is the only option left.

Now with Greek’s converting their money into non-taxable, non-seizable items like watches, jewelry, and luxury goods the government has some hard choices ahead of it.

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