Time for some Drachma Drama: Banks prepare for the return of the drachma LONDON (Reuters) - Banks are quietly readying themselves to start trading a new Greek currency. Some banks never erased the drachma from their systems after Greece adopted the euro more than a decade ago and would be ready at the flick of a switch if its debt problems forced it to bring back national banknotes and coins. http://finance.yahoo.com/news/banks-prepare-return-drachma-083804551.html
Actually, Joachim Fels way way way back figured that since euro notes can be distinguished by the nation that issued them (kinda like how Fed Reserve notes have in them a letter that says which bank issued them) any country leaving could use those in the interim until they get their old ones back up. Would probably cause major confusion, of course. I think you'd have to pay close attention to the serial number. It would not be an easy thing.
Currency money is just part of a nations credit profile, a zero interest demand note backed by the value of its longer term bills and bonds. It does not matter what you call it. What matteris is whether it is backed by valuable, tradeable, term securities of a solvent issuing sovereign. The Euro is not backed by Greece credit...oversimplifying, it is backed by German credit. If you seperate the German credit guarantee from the demand paper that you plan to use for transactions in Greece, call them Drachma or Greek Euro's or a 'rose', they will only be worth the Credit of the Greek Government, by iteself. In other words it will not be long before they are recognized as worthless. Who will take such script in exchange of goods or labor? Only government workers. And what will government workers do with such script? Get rid of is asap...welcome to Weimar. The issue in setting up a new currency is not what you call it; its what credit you back it up with.
One of the things Hitler did after the Weimar was to borrow South American goods and sell them at a discount. He then used the money to buy gold and back the currency against it. That is how he got the mark recognised again by foreign investors.
That's interesting. Do you think the South African's will lend goods tot he Greeks? I think that on the export basis that the Greeks have more of a 'Diner economy'...."I will glady pay you next tuesday for a hamburger today!" Would you call that a 'Whimpy Repo?'
Spain is emptying out as well: MADRID (Reuters) - Spaniards alarmed by the dire state of their banks are squirreling money abroad at the fastest rate since records began, figures showed on Thursday, and the credit ratings of eight regions were cut. Spain is the next country in the firing line of the euro zone's debt crisis, with spendthrift regions and shaky banks threatening to blow a hole in state finances and pushing funding costs towards levels that signal the need for a bailout. http://finance.yahoo.com/news/spain-must-tell-europe-bankia-063911552.html
Rioja is going to get to cheeper soon...demand the best! Only from the Priorat, and at bargain prices...much better than Greek wine. If I was growing wine in Spain, I would get it out of there and turn it into dollars that stayed abroad just as fast as I could.
I think many people do not know how good some of the Rioja's are ... damn good! The thing that frequently happens though is that the distribution chain grabs almost all the price cuts at the production level.
Yeah, that'll work. Just like telling some fat broad the way to get into shape is to just eat cheaper ice cream. Never mind that the cost of the ice cream (or the debt) is not the problem, the problem is all the ice cream (debt) that is consumed! But it should be good for a little pop up on the markets, lol. http://finance.yahoo.com/news/u-raises-pressure-euro-zone-074448918.html