|
With hundreds
of billions spent to save
the ailing economy of Greece (and the rest of the continent),
unemployment rates in excess
of 50% among those in their twenties and a solution nowhere to be found, many in Europe and around the world are realizing that this entire
system is about to come unhinged.
And
when it does, as we have noted on several occasions over
the years, there will be riots
in the streets.
Retail business owners
in Greece and greater
Europe are now planning for the worst.
This
is not some alarmist overreaction. This is happening right here and now, and people are starting to
understand that the consequences of a collapse in Europe, the United States
and the world are going to be
serious:
The
planning, says Dixons chief Sebastian James, may look alarmist but it’s good to be prepared.
Company bosses around
Europe agree. As the financial
crisis in Greece worsens, companies
are getting ready for everything from social unrest to a complete
meltdown of the financial
system.
Those preparations
include sweeping cash out
of Greece every night, cutting debts, weeding out badly paying customers and readying for a switch to a new Greek
drachma if the country is forced to abandon the euro.
…
Chief Executive
James says the company
has contingency plans to shutter up its 69 wholly owned and 29 franchised Greek stores and
close them in the short term
to protect against any threat of civil unrest and prepare for a switch
to a new drachma.
…
Dixons, using its experience of dealing with riots in London and other
British cities last summer
– big flat-screen televisions were the looters’ booty of choice – has ordered enough shutters to protect its stores and is working with
the Greek police and security
groups.
…
KPMG’s Bayly advises his clients to check
the six Cs when preparing
for a possible Greek euro exit: cash, contracts, continuity, counterparties, control and commercial. He believes that automotive companies, tour operators and pharmaceutical
groups would see the biggest immediate disruption from an early euro exit by Greece.
…
Bayly also warns companies to guard against the failure of key suppliers or counterparties, to tighten
up on controls to avoid errors and fraud, and also to be clear
on how they would be affected commercially
by possible future changes in patterns of government
and consumer spending.
Source:
Reuters via Zero Hedge
As
we highlighted in Just In Time: When the Trucks Stop,
America Will Stop , the entire
commerce infrastructure is one catastrophe away from seizing
up.
We’ve already
seen an example of this in Greece when liquidity in the credit system dried up and caused shortages in live-saving medications because customers weren’t able to pay pharmacists, who weren’t able to pay distributors, who weren’t able to pay manufacturers and transporters
– and none of them were
able to acquire credit terms from banks
to keep the cycle going.
There
is so much
interdependence within
the system that it is impossible to predict the
exact sequence of events.
However, astute readers understand that a breakdown in credit lending, or key manufacturers going belly-up because they can’t cover
operating expenses, could
lead to serious shortages
down the line in businesses that include everything from medicine to food to fuel.
Take a queue from
the businesses that have direct relationships
with large credit organizations and government insiders. They know something is amiss, and they are taking steps to prepare today, not hoping for a solution that will never come.
It
is critical that you reduce your
personal counter-party risk as much as possible ahead of the economic
destruction to come.
You
think 2007-2008 was bad?
That
was a private sector collapse. The taxpayers
of the world were the backstop
– and for the most part business continued as usual.
We’re now to
the point where entire
nations are beginning to crumble under the weight of excessive spending and debt – and
all of their backstops
and emergency response plans have been exhausted.
The
end result will be a paradigm shift unlike
any we have witnessed in our lifetimes. There will be riots. There will be starvation.
There will be bloodshed.
|
