Monday, 29 June 2015

Greece is the word. Again.

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How was your weekend, people? This is how Greeks ‘spent’ theirs (ho ho): Queuing for currency:

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Why?

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And all that excrement is finally hitting the fan.

And even a paper Euro looks like hard currency compared to the softness of paper drachmas. Not to mention the feel of real hard assets – even if you have to queue to get your hands on them.

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Take note: This is not just a run on a single bank. This is a run on all of them. This is a run on a whole future currency.

And the time-honoured response to a run on a currency based only on debt? A “bank holiday.”  Right on cue, after a week of denail, Greek Prime Minister Alexis Tsipras announced that he was closing all banks “as a way to stemming the tide.”

“In real life, a holiday means to have time off work and have fun. In the world of banking, a holiday means to rob the customer as a way of keeping a bankrupt system afloat.”

No coincidence it’s happening on the weekend before the Greek gov is suppose to pay back $1.7B to the IMF, possible only by another bailout to pay back those extended previously, and Prime Minister Alexis Tsipras announced a surprise referendum on terms for future bailouts.

Advice to Tourists: If You Go To Greece, Bring Plenty Of Cash.

Advice to Greeks: Stop borrowing just to repay previous borrowing. Stop borrowing for consumption. Start producing value.

***The story with most economic crises is similar: everything looks fine until it isn’t.***

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1 comment:

  1. And all that excrement is finally hitting the fan.

    ReplyDelete

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