Ambrose Evans-Pritchard: Deposit flight from Spanish banks smashes record in July

Data from the European shows that outflows from Spanish commercial banks reached [$92 billion] in July, twice the previous monthly record. This brings the total deposit loss over the past year to 10.9 percent [of deposits]…

Mariano Rajoy en Bilbao. Imagen tomada por Ike...

Mariano Rajoy en Bilbao. Imagen tomada por Iker Parriza (Photo credit: Wikipedia)

In any capitalist economy, bank deposits represent capital in liquid form. Spain is bleeding to death. Evans-Pritchard quotes another expert:

This is highly significant. Deposit outflows are clearly picking up and the balance sheet of the Spanish system is contracting.

This is called deflation: a contraction in the supply of money.

I give blood on a regular basis. But I’m only allowed to give one pint at a time, and I can’t go back in less than six weeks to give another pint. Once, when I was into bike racing, I was reminded by Penrose Hospital that it was time to give blood again. I waited until after the race was over. I wanted to be at my best.

The politicians in don’t know about bike racing, and I have serious doubts about their understanding of capital flows. They’re much more interested in continuing to spend other peoples’ money without hindrance.

Says Evans-Pritchard:

The drip-drip of grim figures came amid fears of a crisis after the Spanish region of Catalonia requested a €5 billion rescue package yesterday from the central government but refused to accept any political conditions.

There it is in a nutshell: loan us more money so we can keep spending, but without conditions on the loan!

Evans-Pritchard reiterated:

Nothing can happen until Spain requests a loan package and signs a “memorandum” giving up fiscal sovereignty. It remains unclear whether Mr. Rajoy [Spain’s prime minister] will agree to this.

It’s the socialist mindset: only banks and governments can revive the sinking economy. Investors with their own funds in the banks see the lie, and are getting their money out while the getting is good.

Spain is bleeding to death.

Opt In Image
Soak Up More Light from the Right
with a free copy of Bob's most popular eBook!

Sign up to to receive Bob's explosive articles in your inbox every week, and as a thank you we'll send a copy of his most popular eBook - completely free of charge!

How can you help stop the Democrat's latest gun grab? How is the Federal Reserve deceiving America today? What is the latest Obama administration scandal coverup? Sign up for the Light from the Right email newsletter and help stop the progressives' takeover of America!