Chart of the Day: Flight of the EZ Capital

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Today’s chart comes from Bloomberg View via interest.co.nz Top10@10 feature, (which I read every day) and is part of a report on the flight of capital from the periphery to the core EZ nations, in the form of deposits (tracked via changes in balance sheets):

Spain and Italy lead the race, particularly the former throughout the latter half of 2011 – more from Bloomie:

This analysis suggests that capital flight is happening on a scale unprecedented in the euro era — mainly from Spain and Italy to Germany, the Netherlands and Luxembourg (see chart).

In March alone, about 65 billion euros left Spain for other euro- zone countries. In the seven months through February, the relevant debts of the central banks of Spain and Italy increased by 155 billion euros and 180 billion euros, respectively. Over the same period, the central banks of Germany, the Netherlands and Luxembourg saw their corresponding credits to other euro- area central banks grow by about 360 billion euros.

The seven-month increase is about double the previous 17- month rise, and brings the three safe-haven countries’ combined loans to other central banks to 789 billion euros, their highest point on record.

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In a related note, I did catch Clifford Bennett this morning on Twitter espousing the strong export demand of Europe – now “the most fiscally responsible economic region in the world” -maybe he was talking about these Italian exports, since their trade deficit is narrowing, from the BBC:

Italian exports of gold ingots to Switzerland have soared in recent months, data has shown. Exports to Switzerland were 35.6% higher than in February 2011 “mainly because of sales of non-monetary raw gold”, statistics agency Istat said. This followed a 34.6% year-on-year rise in exports to Switzerland in January.

Overall trade data showed that Italy’s non-seasonally trade deficit narrowed to 1.1bn euros ($1.4bn; £905m) in February from 4.3bn euros in January.

Italy exported 120 tonnes of gold to Switzerland in 2011, an increase of 65% on 2010.

At an average price of 1130 Euros per ounce throughout 2011, thats a little over 4 billion Euros….or the entire trade deficit for January.

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Responsible or not, the Europeans are voting with their wallets and moving their capital where they see the safety. Getting read to rebuy peso’s and lira in a few years perhaps?