"Greece will continue to endure its long Calvary until somebody has the courage to tell the Greek people – and to keep telling them until the truth sinks in – that the drachma is their best hope of economic renewal." ~ Ambrose Evans-Pritchard, The Telegraph UK, 16 Jul 2015A popular mainstream media propagandist, Ambrose Evans-Pritchard has called for the Greeks to ditch the Euro and exit their monetary union with Europeans. In, Greece should seize Germany's botched offer of a velvet Grexit, Pritchard wrote, "There is not the slightest chance that Greece will be able stabilize its debt and return to viability..." Meanwhile, Pritchard fails to provide any document, say a spreadsheet, which he has worked out the debt rollover requirements over a 10 to 12 year period.
As I have pointed out, Greek law givers never have been asked to pay back €330 billion. Instead, Greek law givers had been working a remedy plan of paying €6.5 billion a year over 10 years, enough to pay down their debt to 110% of GDP, that is until the communists of SYRIZA led by Alexis Tsipras and his game theory, cycle-riding buddy, Yanis Varoufakis fouled up everything.
Before anyone accepts propaganda from jokers like Pritchard, all must ask themselves who will want the drachma? Who will take drachma for oil, natural gas, cars, trucks, semiconductors, precision machinery, pharmaceuticals and millions of products Greeks don't make and lack the capacity — mostly brains — to make?
For those who take drachma, what will they buy? Will they buy feta cheese, olive oil, belly dances, hotel room rentals? How much supply of olive oil does it take to pay for a bulldozer?
What would happen to Greeks if only they stiffed their creditors, subverted the European project and fired up the printing presses so their banks could run on drachma? What would happen to the €7.5 billion they receive in EU subsidies each year? How could Greeks pay for exports they now receive?
Let's compare Greeks to the Nigerians.
- Greek exports: Exports €27.2 billion (-1.3%; 2014 est.)
- Nigerian exports: $93.01 billion (2014 est.) = €84.45 billion.
- Nigerians import US$52.79 billion (2014 est.), which is €47.94 billion
- Greeks import US$39.45 (€35.82).
Now let's see where the Nigerian Naira stacks up to the US dollar. One USD buys 198.95 Nigerian Naira.
So how do the Nigerians live? The average yearly salary in Nigeria is $3,308.99 (658,324 NGN).
And what about the Greeks? The average yearly salary in Greece is $13,265.45 (€12,048).
Greeks income on average is four times that of the Nigerians yet the Nigerians export three times as much.
So what would happen to the Greeks should they revert to the drachma? Greek incomes would fall and fall hard. Greek incomes would approach incomes of Nigerians. In short, Greeks would impose real austerity upon themselves.
Many believe that with a cheap drachma, tourists will flock to Greece, presumably even more than now because exchange rates will favor foreigners under a drachma.
And yet, it can be shown where there is great favor in exchange rates for foreigners relative to many places, tourists don't flock to those places. How many European tourists flock to Sudan every holiday?
The problem for the Greeks is the same problem everywhere. The Greeks don't live by capitalism.
As I have shown in CAPITALISM. BECAUSE WITHOUT IT, YOU WOULD BE LIVING AS A BARE SUBSISTENCE SAVAGE and SOPHIE'S CHOICE OF CAPITAL OR LABOR. A FREE-MARKETS LIBERTARIAN BECOMES AN ANTI-CAPITALIST AND PERPETUATES AN ECONOMICS MYTH. Wages and capital are interlinked.
Wages come from returns to capital. Without capital there can be no wages. Without positive returns to capital, no one would put property to use as capital.
Greeks have been living on ever-greater largess of Greek law givers as well as EU law givers since joining the European Union and later, the Euro zone. In turn, Greek law givers have relied on floating ever more bonds to pay for their largess.Spending doesn't bring return to capital. Realizing on expected profits in the future does.
Always, the problem for Greeks has been spending, spending that comes from borrowing and a lack of production from capital.
Wages come from returns to capital. Without capital there can be no wages. Without positive returns to capital, no one would put property to use as capital.
Giving government workers wages paid by borrowed funds is a kind of welfare. Those wages aren't really wages at all. Those wages haven't come from returns to capital.
Politicians, socialists and the greedy never will understand this and thus they will never understand reality. They will go cradle to grave in earthly hell. Who knows what will happen beyond. For sure, there is no exit from reality.
Gab It
