Royal Dutch Shell is pulling its cash out of Europe. That is a clear sign that Europe’s lingering demise is close to collapse. The reasons for removing cash due to a “shift in willingness to take risk” is irrelevant: they know that the banks will not be able to bail out the whole of Southern Europe as evidenced by Greece’s latest extension last week. George Soros’ prediction of a collapse of the Euro within 90 days (September 2012) seems to have been prescient (or not if he is pulling the strings). What people do not realize is the close association between European banks and American banks – see MF Global as an example. If Europe collapses, our banks will quickly follow. Although the USD has strengthened against the Euro, I want to point out two facts:
1. The USD’s strength is based on being a “perceived” historical safe haven. The article below did not state where Shell and other European companies are transferring their money.
2. The USD’s value should not be based on another currency which is collapsing.
The company’s chief financial officer Simon Henry told the newspaper that Shell is cutting back its exposure to European credit risk in the worst-hit economies and putting a higher price on doing business with the region’s peripheral nations.
“There’s been a shift in our willingness to take credit risk in Europe. The crisis has impacted our willingness to afford credit,” Henry is quoted as saying.
Henry is cited as saying that the Anglo-Dutch oil major would rather deposit $15 billion of cash in non-European assets, such as U.S. Treasuries and U.S. bank accounts.
The firm is forced to keep some money in Europe to fund its operations, but is keeping the bulk of its reserve liquidity out of the euro zone to avoid growing macroeconomic risk, the report said.
And what Shell is doing, everyone else can’t be far behind – certainly not the head of a Greek bank who decided to pull his money out of Greece and “launder” it via London real estate: just as so many others are doing.
A political row has erupted in Athens after the former head of a big Greek state bank admitted to transferring €8m of personal savings abroad to buy a London property months before his Agricultural Bank headed towards insolvency.
Theodoros Pantalakis, former chief executive of Greece’s Agricultural Bank (ATEbank), strongly denied any wrongdoing, telling Realnews, a Greek website, that he had declared the transaction to authorities in 2011 and had paid tax on the amount transferred.
“I’m on holiday and I don’t plan to say anything more until I come back to Athens,” Mr Pantalakis told the FT from his villa on the Aegean island of Paros. He is expected to testify on his three years at the helm of ATEbank before a parliamentary committee at the end of August, said a person with knowledge of the dispute.