Guest Post: The Greeks Have Already Dumped the Euro

Tyler Durden's picture




 

Via Michael Krieger of Liberty Blitzkrieg blog,

[ZH: We first noted the shift to a barter economy that is occuring in Greece back in April. But Mike's excellent update below shows that this 'barter' has progressed to a new 'alternative' currency]

Really fascinating article about how many cities and communities in Greece have already moved on from the euro to bartering as well as alternative currencies.  The city of Volos, 200 miles north of Athens with a population of 170,000 is highlighted in the article due to the size of its alternative money market centered around a local currency call the Tem.  This sort of behavior will be the wave of the future in all countries, as Central Bank currencies are debased into extinction.  It’s interesting because while I was in Crested Butte over New Year’s I noticed they have a local currency going there called Crested Butte Bucks and I was really surprised to see that you can spend them pretty much anywhere in town.  I also highlighted this trend in my post earlier this year English City of Bristol Launches its Own Local Currency.

Now, from the Guardian:

It’s been a busy day at the market in downtown Volos. Angeliki Ioanitou has sold a decent quantity of olive oil and soap, while her friend Maria has done good business with her fresh pies.

 

But not a single euro has changed hands.

 

In this bustling port city at the foot of Mount Pelion, in the heart of Greece‘s most fertile plain, locals have come up with a novel way of dealing with austerity – adopting their own alternative currency, known as the Tem.

 

“Frankly the Tem has been a life-saver,” said Christina Koutsieri, clutching DVDs and a bag of food as she emerged from the marketplace. “In March I had to close the grocery store I had kept going for 27 years because I just couldn’t afford all the new taxes and bills. Everyone I know has lost their jobs. It’s tragic.”

 

For local officials such as Panos Skotiniotis, the mayor of Volos, the alternative currency has proved to be an excellent way of supplementing the euro. “We are all for supporting alternatives that help alleviate the crisis’s economic and social consequences.”

Full Guardian article here.

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Fri, 01/04/2013 - 15:50 | 3123403 Joebloinvestor
Joebloinvestor's picture

Never underestimate the will to survive.

Fri, 01/04/2013 - 15:54 | 3123431 Ghordius
Ghordius's picture

Long live private currencies

Fri, 01/04/2013 - 16:02 | 3123470 DoChenRollingBearing
DoChenRollingBearing's picture

I dunno guys.  Artificial LOCAL currencies, based on nothing, do not seem to be long-lived.  This appears to be just a scrip, an alternative until something better hits town.

Why are they not bartering with silver?  That is the PAYMENT I would take, I would pay in that bogus local new paper currency...

Fri, 01/04/2013 - 16:03 | 3123477 Ghordius
Ghordius's picture

40 years median age, compare with 70y gov fiat

Fri, 01/04/2013 - 16:14 | 3123536 SilverTree
SilverTree's picture

I took a nice dump today too, bitchez!

Fri, 01/04/2013 - 16:20 | 3123563 francis_sawyer
francis_sawyer's picture

paper currencies only last for as long as joo bankers con you into believing they are actually worth something... The point of recognition comes long about the time that they have stolen all your gold...

Fri, 01/04/2013 - 16:21 | 3123568 IvyMike
IvyMike's picture

I didn't say I was a Jew.

I said I was Jewish.

LOL!

Fri, 01/04/2013 - 16:24 | 3123590 ZerOhead
ZerOhead's picture

Barter is getting big in Greece...

My friend Dmitri Apocalypsopoulos witnessed a guy trading a handjob with another guy for a blowjob cutting the taxman completely out of the picture.

Apparently it's the only 'jobs' available there these days...

Fri, 01/04/2013 - 16:30 | 3123618 Michaelwiseguy
Michaelwiseguy's picture

Nigel Farage - Greece Descending into Total Chaos & Violence

He told me that he and his friends, who live in the big detached houses on the outskirts of Athens, they are all going out and buying Kalashnikovs (rifles).  He said, ‘We are doing that because we think those of us that have assets and property, at some point soon, are going to need to defend our properties.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/2/15_Nigel_Farage_-_Greece_Descending_into_Total_Chaos_%26_Violence.html

Fri, 01/04/2013 - 16:32 | 3123627 Ghordius
Ghordius's picture

Still listening to The City's Darling?

Fri, 01/04/2013 - 18:05 | 3123996 Enslavethechild...
EnslavethechildrenforBen's picture

If you write "I owe you a cup of coffee" on a piece of paper, it will hold it's value. It will always be worth a cup of coffee to those who honor it.

Not so much for the Dollar...

Fri, 01/04/2013 - 17:11 | 3123796 Overfed
Overfed's picture

Since England is still a monarchy (sort of), they should make Nigel their king. Smartest thing they could ever do.

I could see hime dissolving Parliament, holding all new elections whereby all previous office holders were automatically DQ'd, then dissolving the monarchy and abdicating the throne. I don't know how well the Brits would handle freedom, though.

Fri, 01/04/2013 - 17:21 | 3123837 Ghordius
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did you ask 'em? Just thinking loud...

Fri, 01/04/2013 - 18:08 | 3124005 Enslavethechild...
EnslavethechildrenforBen's picture

You mean people actually need to eat?

Sat, 01/05/2013 - 10:26 | 3125055 MarcusLCrassus
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Nigel Farage = the next Cromwell? 

 

Now that would be awesome.  Initial policy he might institute would be a twist on what Shakespeare said: "the first thing we do, lets kill all the lawyers bankers."

Fri, 01/04/2013 - 21:44 | 3124410 walcott
walcott's picture

if that was the case they all should be dead already or killed some chaos.

That article almost a year ago 2-15-2012

Fri, 01/04/2013 - 18:34 | 3124065 Dr. No
Dr. No's picture

They last as long as the government which issues it, demands tax payments denominated in the issued currency.  Pay in the approved fiat or go to jail.

Fri, 01/04/2013 - 16:25 | 3123581 ZerOhead
ZerOhead's picture

Oops...

Fri, 01/04/2013 - 16:16 | 3123511 sunaJ
sunaJ's picture

I've believed this would happen for a while now.  Local currencies are a good thing.  In fact, they can be the death knell for central planners, because they are formal rejections to the current centrally-planned offer (in this case, the euro).  When they catch on with more rapidity, it can be the vote of no confidence that precipitates hyperinflation in the dollar/euro.  These currencies will inevitably begin to form as the stress of austerity and taxes press on the populations.   Local, small currencies - even fiat - are much better than centrally-planned FRNs or the euro.  Local currencies will have to compete with each other and one failure will not be the end of the country (or continent).  There is also much more accountability with local control.  Be prepared to see the states issuing their own currencies once the dollar collapses here.

Fri, 01/04/2013 - 16:55 | 3123721 boogerbently
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Much of the world has been "bartering" around the USD for a while, now.

Sat, 01/05/2013 - 03:48 | 3124800 Transformer
Transformer's picture

There's nothing wrong with a scrip or paper currency based on barter.  Nothing wrong that some bankers couldn't F up, though.  As long as the currency is for the people, and they maintain it honestly, it will work great.

There was a book written by Silvio Gessell  that led to scrip currencies being tried in various towns in Germany and Austria in 1932.  This was during the depression, and the economies of these towns did a 180 degree turn in just a couple months, and flourished.  The central banks put a stop to it though.

Most people forget that Hitler, whatever else he may have been, turned the German economy around, from horrid, to the wonder of Europe in just a couple years.  He did this by applying some of the theories of money from Silvio Gessell and others.  When a currency is desgned to work for the people and not so the bankers can steal, miracles are possible.  Gold and silver are not out of the picture, if you want to save money, you do it with PM's.  If you want do commerce, use the scrip.

http://alt-money.tribe.net/thread/70e5eb29-853d-44ca-9faa-b789d1757037

http://www.lietaer.com/2010/03/the-worgl-experiment/

Fri, 01/04/2013 - 16:18 | 3123548 Ghordius
Ghordius's picture

What you want is then a silver-backed currency. Duly noted
Other wishes and parameters? Debit card? PayPal-Clone?
Market is opening.... Ding ding ding

Fri, 01/04/2013 - 20:12 | 3124248 Matt
Matt's picture

Silver backed? I want silver coins. I think 90% silver, in 1/16 ounce, 1/4 ounce and 1 ounce denominations (no $ face value, just indication of weight and purity). Maybe 1/4 ounce and 1 ounce nickel coins for small change? 

Fri, 01/04/2013 - 20:20 | 3124255 Enslavethechild...
EnslavethechildrenforBen's picture

In the old days we used to call them Silver Dollars, Quarters and Dimes. They did not have denomiations as the legal meaning of the word "dollar" means "1 ounce of Silver"

All paper "dollars" are counterfeit. They can not be redeemed for an ounce of Siver or any other metal.Don't accept them, if you have to use them, pass them off to someone else as soon as you can.

Sat, 01/05/2013 - 03:57 | 3124805 Transformer
Transformer's picture

I think one of the fallacies of our monetary systems is that money should both be for commerce and for savings.  Why not separate the two and make a currency designed to implement commerce.  If you want to save, you buy PM's.  The money might be steadily depreciating, but not for the gain of the bankers, but to encourage commerce.  The depreciation would go to the government, in a known and steady manner.  All the govs income would derive from commerce, thus the more commerce the more "tax receipts".

I know, it's a fantasy.  The psycho bankers must be gotten out of the control/create money business.

Fri, 01/04/2013 - 20:45 | 3124307 CPL
CPL's picture

Acutally the TEM is part of an economic system devised by a Science Fiction author by the name of Harry Harrison (Eden series was his most notable).   He had a nickle book series in the 60's or 70's called the stainless steel rat.  They are really good if you have a chance to find them.

 

The Stainless Steel Rat Gets Drafted calls it "Mutual Individualism".  No one persons time is less valuable than another persons, so a TEM is one hour of human work translated into a currency.  Since it's science fiction there is no crop failure and robots pick fruit.  It morphed into participatory economics by the time star trek came around.  Every wonder why there are systems of trade in a universe that appearently has unlimited energy and therefore replicator junk.  You've never seen Kirk go for his wallet, but every one around them uses pressed latnium.

 

That's the system the Greek have set up.  Very hard to fuck/corrupt with once it's in place and people figure out the value.  The idea that someone games the system is a risk of immediate removal from the system.  One work of labour = one tem, at least in the science fiction novel.  I am very curious to see how something I've only read about in Science Fiction novels and TV shows is working?

It's such a weird concept, it always smacked of communism.  But by how it would work if one hour of time = one tem and that value never changes.  A house would cost someone a decade of saving their time.  Although, doing work and saving the hours, it would make a very frugal society.

Fri, 01/04/2013 - 21:00 | 3124329 strongband
strongband's picture

so an hour's worth of lawyer is charged at the same as an hour's worth of janitor?

Fri, 01/04/2013 - 21:36 | 3124395 foofoojin
foofoojin's picture

if the goverment the AND the people acted in there responsibilty and nothing more. then 99 percent of the lawyers skill value would be made useless. and in that case i beleave the lawyer should ear less then the janator.   but out of pity. sure let them earn the same.

Sat, 01/05/2013 - 05:01 | 3124849 Seer
Seer's picture

Excellent reply!

But, it just goes to show that we can't assume that what exists now will necessarily exist in the future.  What laws are lawyers going to be operating by?

Fri, 01/04/2013 - 22:39 | 3124497 CPL
CPL's picture

If a lawyer wants their office clean, sure I suppose, why wouldn't it. If it takes a the janitor five minutes to clean an office that's 1/20th of a TEM.  Lawyer writes 400 pages of nonsense or 40 pages of tightly worded agreements.  One takes 12 TEMS, the other takes 400.  Legal work would end up being forced into a position that any extra clauses would cost someone a fortune.  So rider clauses and hidden legal pits would have to be disposed of for the sake of brevity.  nobody would pay out that sum to have a lawyer map out some padded bullshit.

 

The science fiction I've read about it usually didn't go into exhaustive detail.  It's usually used as an after thought to make a plot device work.

Sat, 01/05/2013 - 14:58 | 3125483 Chewybunny
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That's why it's science fiction. 1 hour of labor for one kind of job doesn't equal the value of 1 horu of labor for another kind. We do not yet have the technology to completely do away with manual labor, nor the kind of technology to make it so resources, services, and goods, would be come so abundant they become totally worthless. When you reach that point, then we can talk about having equal kind of value for labor since at that point value becomes a meaningless term.

Sat, 01/05/2013 - 18:04 | 3125854 CPL
CPL's picture

The "what if's" make it fun though.  Sci Fiction and Fantasy novels haven't really bothered to create financial fiction because our financial industry has the lock on that.  They just could never compete directly with their product positioning.  

Some other "what if's" that pop into mind if their speculative predictions of our current situation...all of which are dead wrong.

  • Vernes warned we would be getting harvested by the Morlocs and dragged into an underground feeding chamber.  Many are waiting for the chamber door to open in most capital cities and financial districts.  If it were to happen, Morlocs would prefer the better fed and healthiest of the 'herd'.
  • Philip K Dick described an America where Japan and Germany ruled North America by this point by WW2 monkey business and Germany crushing England instead of waiting like it did.   Alternatively Blade Runner future should be now as well.
  • Fredrick Poul (amazing writer) informed the general public that we would be returning from a Alpha Centauri mission with a complete and full understanding of genetics, sexual positions, dropping space acid and how to gene splice Marijuana into the common tomato.  Mainly to throw a very interesting orgy/party in space.
  • Logan's Run, (Nolan and Johnsen), 1970's hairy beaver shots and mini skirts made of the future technology of polyester complete with some hottie with a wind blown look.  I'm not sure about you but if we start wearing polyester jumpsuits with epidemic obesity.  It stretches, but...no, we wouldn't want to live in that world.
  • Asimov had everyone neck deep in robots and androids by now.  Even listed some laws of robotics that are completely ignored.  Somehow he suffered under the delusion that Engineer means saint.

 

I am curious to how the real experiment is structured in Greece.  Tempted in fact to participate in it to figure out what works, what doesn't.  What societal effects does it have?  Like does crime pay?  Does a good deed?  There are many gaps in the history of finance and currency, I feel this is one that deserves to be noted properly.

Sat, 01/05/2013 - 18:46 | 3125919 AetosAeros
AetosAeros's picture

Actually, I disagree with your statement that we don't have the technoloygy to do away with manual labor. The rest of your statement I find satisfactory.

There are technologies available that could minimize to a very great degree the labor of certain menial task industries. I'm not talking in an idealistic fashion, or with rose colored glasses, or fringe theory (cold fusion, perpetual motion, cryogenic superconductors which don't take into account the energy of the 'push' in there models), I'm talking about certain automation processes which can be used in growing, in animal husbandry, and things along those lines. Sure, there are jobs that will always require a human to monitor the actions, but when you can take 100 people 1 year to build something that at start up then requires only 5 people to monitor, and the initial job would take 40 people to operate and do constantly, at 'x' period, you get a lower cost. But some of these things would mean the loss of a job for 35 people at some point. So what to do for them?

 

Handouts are out, but there has to be something better. When we get rid of those who control our future as a gain for theirs, what do we do to make it better without becoming 'them' in the long run.

 

just a thought. I up voted you regardless.

Fri, 01/04/2013 - 23:21 | 3124560 americanspirit
americanspirit's picture

Well strongband it depends of whether you want your will drafted or your toilet cleaned. In my book they're worth about the same. And I think our society could do very well wiothout lawyers - without janitors, I'm not so certain.

Sat, 01/05/2013 - 23:25 | 3126392 mkkby
mkkby's picture

Yep, I've never used a lawyer, but I have cleaned my bathroom. 

Very few lawyers would even exist if not for a corrupt government run by them, intentionally too complex for anyone to use themselves.  Therefore, in an honest system most lawyers would have no value.

Fri, 01/04/2013 - 21:40 | 3124400 Cathartes Aura
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can be compared to Ithaca Hours maybe?

One of the interesting attributes of local currencies created since 1920 is that generally, they are not intended to be stores of value. During the Great Depression 300 towns and other entities created a wide array of emergency money, “stamp scrip,” and other media. Back then, one of the expected problems was “hoarding.”  The goal of these issues was to encourage spending, to keep money in circulation. Lakewood, Ohio, created scrip that announced on its face and back that it declines in value over time, the dollar of January 1933 being worth 50 cents in June. Other towns relied on other expedients to achieve the same result.

On the other hand, Ithaca Hours, as a “time dollar” is designed to maintain its value. Representing one hour (fractional notes also exist), Ithaca’s notes are relatively stable.

http://www.michigancoinclub.org/Baybucks.htm

 

plenty of local communities have been rocking this "concept" for decades now, many successfully.

Sat, 01/05/2013 - 04:01 | 3124808 Transformer
Transformer's picture

You are so right.  During hard times people save more than they normally would, or "hoard money" as you say, slowing the velocity of money way down.  This creates the same thing as deflation and dampens commerce greatly.  The Woergl scrip encouraged commerce as each bill was taxed 1% a month.  You didn't want to hold the money and pay the 1%, so people spent it into commerce.  Within a matter of months the town prospered.  Economists came from all over the world to witness the miracle.

Sat, 01/05/2013 - 04:05 | 3124810 Transformer
Transformer's picture

It's a very different concept to "tax" the money itself.  Not with a sales tax or any other sort of VAT, but a direct tax on the money, that must be paid each month from the time of issue.  Saving it is a loser, as it costs over 12% a year to save the currency, so you spend it.  This tax would support any normal government

And again, if you want to save money, use the scrip to buy silver or gold.

Sat, 01/05/2013 - 05:21 | 3124858 Seer
Seer's picture

"This tax would support any normal government"

If no one held on to the trade currency then no tax would be collected.  Since I'm a NO GOVT guy I don't have a problem with this, BUT... absence of govt doesn't = "normal government."

All govts that I know of HAVE to be funded, in which case if people weren't holding trade currencies long enough to generate govt funding then some other means of taxation would be sought.

It's all in the details...

 

Fri, 01/04/2013 - 22:09 | 3124442 defender
defender's picture

I think I  heard about a "time bank" that was getting popular in SF area.  I am not sure if it is still in use though.

Sat, 01/05/2013 - 05:26 | 3124859 Seer
Seer's picture

I think I'd heard of these as well (though from elsewhere).  Problem was that it cost to use the system.  Further, in my mind anyways, having something highly dependent upon computers (which can be hacked; and think "locally managed systems") doesn't sound like the direction we're heading; people can laugh all they want, but if anything like this goes forward it'll be forward to the past- pencils/pens and paper/ledgers.

Sat, 01/05/2013 - 10:29 | 3125060 MarcusLCrassus
MarcusLCrassus's picture

Bitcoin, baby!

 

Its already caught fire, and the only way the government could stop it is by seizing every single computer in the world, i.e. never.

Sat, 01/05/2013 - 13:37 | 3125318 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

the bitcoin scene in Berlin is exploding.  German savers are dumping the fucking euro real fast.

 

1 usd = 0.07 bitcoin

 

every ten minutes, 25 new bitcoins are created.

every ten minutes, $120,000,000 new federal reserve notes are created.

doing the math is left as an exercise to the reader
Sun, 01/06/2013 - 17:03 | 3127653 Papasmurf
Papasmurf's picture

every ten minutes, 25 new bitcoins are created

 

Bitcoin is fiat by this example and should soon grow exponentially, just like Federal Reserve Notes.

Fri, 01/04/2013 - 16:26 | 3123596 laozi
laozi's picture

They don't habe a problem with inflation (yet). So they have not learned the drawbacks of fiat.

When inflation comes, silver will be popular.

Fri, 01/04/2013 - 16:33 | 3123616 Sudden Debt
Sudden Debt's picture

Oh it has been proven to work great in small to medium sized communities.
But in the end, they always become to popular and need to be crushed by central banks to avoid losing control.

Europe has a rich history of this kind of coinage.

during and after WOI and II, every big city had it's own currency.
And all over europe, there where hundreds of currencies.

untill the state took them down.

I still collect these coins from my city, out of sheer patriotisme for my city.

I don't know how it is in America, but over here, we are first inhabitants of a city, than of a country, than of europe.
If you look to our history, every city had it's castle and faught other cities who had a castle. Now, these castles have been replaced by soccer teams.
And they are the symbols of our cities.

Fri, 01/04/2013 - 16:38 | 3123640 Ghordius
Ghordius's picture

Yes. But this time we reduced the National Banks. We have NO NATIONAL "interests" that "force us", "only" "common EZ ones".

On the other side, LOCAL interest FOR it.

Different political equation

Fri, 01/04/2013 - 16:41 | 3123654 Ghordius
Ghordius's picture

Wait until cities lend in local currency ;-)

Fri, 01/04/2013 - 16:43 | 3123662 DoChenRollingBearing
DoChenRollingBearing's picture

I'm an American.  History?  What's that?

Fri, 01/04/2013 - 17:00 | 3123742 Ghordius
Ghordius's picture

Something akin to copyright, only weaker

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