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rottingjohnny
Sport climber
mammoth lakes ca
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Jun 30, 2015 - 08:07pm PT
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" When EF Reilly talks , people listen...
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Brokedownclimber
Trad climber
Douglas, WY
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Jun 30, 2015 - 08:27pm PT
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The average Greek will feel the pain immediately. With a shortage of circulating currency, the economy will slow to a crawl. The idea of a "cheap vacation" is a fantasy, since the availability of nice food and drink will dry up, along with fuel for busses and taxis. Money is the necessary lubricant of the economy.
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Jan
Mountain climber
Colorado, Nepal & Okinawa
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I think you underestimate the Greek' ingenuity at dealing with adversity. The barter economy will keep people fed anyway and the black market will thrive. As for the tourists, the Greek government is encouraging them to use their credit cards to keep the hard currency flowing.
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Reilly
Mountain climber
The Other Monrovia- CA
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LA Times article today says travel agents are not seeing significant cancellations although
the State Dept has issued advisories. The biggest worry is that as things deteriorate tourism
will decline as people will not want to 'rough it' if maintenance and amenities lessen. There
will be very hard choices to be made.
So, Jan, have any meaningful studies been done on why the more temperate the climate the
the less financially temperate the people are? My theory is that if you live in a place where
you might die if they turned off your utilities then you're gonna make sure that doesn't happen.
Maybe that's a subject more for behavioral economists than anthropologists?
RJ, does EF stand for "El Flaco"?
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couchmaster
climber
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When Cyprus faced this issue they choose to essentially confiscate 40% of everyone's bank accounts deposits over $100,000/Euros. (of course it's more complex than my few words can describe, duh: see details of BBC link below) The discourse had been going for @ 6 months and they then moved super fast and then confiscated peoples cash during weekend. Bottom line, they took your cash and gave you worthless paper. If you were a business that needed that cash to operate, or a person with bills, you were screwed.
Similar plan has been developed and approved for the US. Here's a link to a rough sketch of some details of that program. http://www.huffingtonpost.com/ellen-brown/banks-confiscation_b_2957937.html
http://www.bbc.com/news/business-21982652
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Jan
Mountain climber
Colorado, Nepal & Okinawa
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Reilly, in anthropology we call that field cultural ecology. Personally, I think climate and location have a huge influence. The harsher the climate, the more difficult the life, the harder people work and the more they plan ahead. In Nepal it was particularly striking as I lived in two different villages, only 30 miles apart. In one, the people lived at altitudes of 12,000 feet to 18,000 in altitude and could grow only one crop a year yet produced a surplus and had 30 days of village wide parties a year. In the other at 6,000 feet, they could grow four crops a year and malnutrition was rampant. No parties either. It's enough to make you really think about the difference.
When I compare modern economies, it seems to me Japan and the U.S. are in similar positions. Japan is a cooperative middle class society that has to be to survive all their natural disasters and lack of resources. The U.S. has had so many resources in the past, we never thought about society much and have the most inequitable one now in the advanced world.
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John Duffield
Mountain climber
New York
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Because it might be happening to us one day..........
Indeed. The real reason why this is interesting.
My takeaway from this, and other events as well, is how quickly and unforgivingly, things can go South. You proactively go in there, make the difficult choices to head it off, or you get overwhelmed and things are so bad, there's no second chance.
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Brokedownclimber
Trad climber
Douglas, WY
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I found during my travel to Europe over the past 2 years, that many businesses do NOT accept credit cards for meals and services. most of the Pensions/Albergos, B & B's, etc. all demanded cash payments and refused/were unable to process credit cards. This included Italy and Germany. In the most populated areas in larger cities, credit cards are accepted; in the rural areas--not so...
Fuel/energy will become the first commodity hit, then foodstuffs. Tourists don't want to barter. I suspect that thievery will be on the rise, too.
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JEleazarian
Trad climber
Fresno CA
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I know the banksters will profit no matter what.
Not the banks I've been involved with for the past 36 years. Foreign currency transactions have winners and losers, but their identity depends on the betsw they made, not on their line of business.
The best way to understand the effect these issues have on the Greek people is to understand the difference between national and private debt. Private citizens cannot legally print money. Governments can and do. This allows them to adjust the relative value of their currency and, in the process, shift the cost of past borrowing from taxpayers to others.
if the debt were to be repaid in old Drachmas, the cost of the unpaid debt would shift to the lenders because of the devalued currency. Since the debt is due in Euros, the Greek government's choices are (1) to default on the debt, leaving the lenders holding the bag; (2) to go off the Euro, and have a devalued currency as a result. This would shift the cost to those who use imported goods and services; or (3) to pay the debt from tax proceeds, placing the cost on taxpayers and citizens who receive fewer government benefits because the money is going to repay what was purchased in the past.
Fortunately for the U. S., our debt is still payable in dollars, so we can inflate at least once more, and probably will.
Jan, that's an interesting comment about field cultural ecology. It makes societies behave like wine grapes. The climate in Burgundy is so objectively hostile to growing grapes that the Pinot Noir and Chardonnay that make it there are extraordinary. The climate here in the Big Raisin is so hospitable to growing grapes that the wine grapes here usually aren't much to talk about.
John
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Brokedownclimber
Trad climber
Douglas, WY
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If you really want a cheap Big Fat Greek Vacation, buy Euros with Dollars and pay cash for everything when you travel.
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yanqui
climber
Balcarce, Argentina
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How ironic would that be if the new world reserve currency had a picture of Mao on it?
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Brokedownclimber
Trad climber
Douglas, WY
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I see the Greeks turning to Putin and Russia for assistance. They have a surplus of petroleum and natural gas, as well as hard currency.
The entire situation is a result of Fiat Currency, since the ECB can issue Euros in the same manner as the Fed issues dollars in this country. Sooner or later, the chickens all come home to roost. Principal on debts can be re-paid, but interest--not. The end game comes through bankruptcy and foreclosure.
A barter economy can only carry things to international borders; yes, the Greeks probably won't starve, but there won't be any gasoline, natural gas, diesel fuel, etc., the life blood of a modern state.
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MikeL
Social climber
Seattle, WA
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JEleazarian (and Jstan): ST is a veritable treasure trove of knowledge and wisdom.
Indeed. In a previous life long ago I was an institutional broker for a US Primary Government Securities Dealer focusing on the short end of the yield curve, and now teaching business. (Not that they mean I know what’s going on—no one ever really does.) The conversation here is informed, stimulating, and fun to read.
Speculation occurs in many areas here on ST.
I remember back in the year of Paul Volker and listening to him make presentations about the looming overhang from international debt that purportedly threatened to put mankind into worldwide depression and Hobbesian “wars against all.” Fortunately, they didn’t quite show up: many scattered fires, but not the firestorm everyone was afraid of.
(But then there was that little problem that messengers Geithner, Paulson, and Bernanke dealt with relatively recently with the decline of Lehman Brothers. Stuff of dramatic movies, but still open for interpretation.)
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John Duffield
Mountain climber
New York
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The average Greek will feel the pain immediately. With a shortage of circulating currency, the economy will slow to a crawl. The idea of a "cheap vacation" is a fantasy, since the availability of nice food and drink will dry up
I would've thought, it would take a little time for it to percolate through the economy.
But the bank closure, did exactly this ^^^.
On the news last night, was a seller of produce, who'd paid 2 EU for an item, that he was unsucessfully trying to unload at 1.5 EU late in the day. That's a Produce Seller, that probably took today off.
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blahblah
Gym climber
Boulder
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We'll have to keep our eyes on the possibility of cheap vacations (in my view, not to "exploit" anyone, but to help the Greeks out by getting them some much-needed currency, and get some extra-value for ourselves).
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Reilly
Mountain climber
The Other Monrovia- CA
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I imagine the tourists will get their amenities but market dynamics should drive those prices
Up which might send tourists to Mallorca instead.
I heard an interview with the leader of Spain's Podemos party today on NPR saying how he
was standing beside his brother Tsipras in his battle for democracy. So democracy is the
new dole? Not incidentally Rajoy is considering calling early elections to take advantage of
his surge in popularity brought about by his success in creating jobs and growth, things that
Podemos find to be anathema to their vision of 'democracy' apparently.
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blahblah
Gym climber
Boulder
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I imagine the tourists will get their amenities but market dynamics should drive those prices
Up which might send tourists to Mallorca instead.
Hmmm, I sort of think market dynamics should drive prices down, and if tourists go elsewhere, that should drive prices even lower.
For example, consider if you own a hotel in Greece--it's going to be nearly empty, and you'll accept lower prices to get anyone to stay there.
All we need to do is show up with our suitcase full of euros, and Greece will be our oyster.
But I admit it's complicated and I really have no idea.
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Reilly
Mountain climber
The Other Monrovia- CA
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I say that because if the Cote du Rhone and illegal caviar have to be smuggled in and paid for with cash then it will be in short supply and, hence, very dear. Besides, if they go back to the drachma the exchange rate will be horrendously unfavorable.
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Ken M
Mountain climber
Los Angeles, Ca
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When Cyprus faced this issue they choose to essentially confiscate 40% of everyone's bank accounts deposits over $100,000/Euros. (of course it's more complex than my few words can describe, duh: see details of BBC link below) The discourse had been going for @ 6 months and they then moved super fast and then confiscated peoples cash during weekend. Bottom line, they took your cash and gave you worthless paper. If you were a business that needed that cash to operate, or a person with bills, you were screwed.
yep, you really have to feel for those people who have bills to pay over $100,000.
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Ken M
Mountain climber
Los Angeles, Ca
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I have also wondered why the EU doesn't put together a "VISIT GREECE" program designed to get all the tourist dollars from Europe, and a lot from elsewhere, flowing into that country.
Greece is a remarkable place. The birthplace of democracy. The FAILURE of Greece makes one wonder about the long term viability of democratic gov't?
Wonder what that is worth.......
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