For the first seven months of the year the outflow adds up to $368.80 billion or 17.7% of the total bank deposits of Spain and the trajectory of the outflow is increasing dramatically. Reality is reality and Spain is experiencing a full-fledged run on its banks whether anyone in Europe wants to admit it or not.
Via Mark J. Grant, author of Out of the Box,
“It is an old saying; the Devil lurks behind the cross. All is not gold that glitters. From the tail of the plough, Bamba was made King of Spain; and from his silks and riches was Rodrigo cast to be devoured by the snakes.”
-Miguel de Cervantes, Don Quixote
It was not so long ago that I spoke at the “Strategic Forum” which was sponsored in part by TD bank. After my presentation about Europe where I had stated, quite clearly, that Spain would hit the wall I found myself accosted by the economist of one of Spain’s major banks. Fortunately Craig Alexander, the senior economist at TD, was walking next to me and as the quite impolite lady from Spain tried to verbally incase me in the famous “iron lady” of the Spanish Inquisition he grabbed my arm and led me out to the patio to speak with some other people and so saved me from not only the diatribe of the loca senorita but from saying several impolite things which I was about to say in retort. As I consider the latest data about Spain I think of this incident and take some delight in saying, “I told you so” or other things inadmissible in my commentary.
To use the analogy offered by Senor Cervantes I would say that Rodrigo, as representing Spain, is about to be devoured by the snakes. The central bank of Spain just released the net capital outflow numbers and they are disastrous. During the month of June alone $70.90 billion left the Spanish banks and in July it was worse at $92.88 billion which is 4.7% of total bank deposits in Spain. For the first seven months of the year the outflow adds up to $368.80 billion or 17.7% of the total bank deposits of Spain and the trajectory of the outflow is increasing dramatically. Reality is reality and Spain is experiencing a full-fledged run on its banks whether anyone in Europe wants to admit it or not.
