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Greek Deflation Continues For 10th Straight Month; Stocks Up 19% In 9 Days

Tyler Durden's picture





 

The Greek economy initially slipped into a deflationary trend in March 2013 and for the 10th month in a row in December, Bloomberg's Niraj Shah notes that EU-harmonized consumer prices dropped 1.8%. This is the longest deflationary streak since 1968 (largest in record according to Bloomberg data) as the Greek economy remains 21.3% smaller than it was in the third quarter of 2007. Of course, this doesn't matter to the dash-for-trash-grabbing fast-money muppets who have driven Greek stocks up 19% in the last 9 days to their highest in almost 3 years; because, as is the only important fact, Stournaras says recovery is coming any minute...

 

 

Source: Bloomberg

 


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Tue, 01/14/2014 - 10:14 | Link to Comment Tsunami Wave
Tsunami Wave's picture

This of course means their economy is still contracting, despite all the 'Greekovery' cheers by various 'elected' and unelected politicians across Europe.

Tue, 01/14/2014 - 10:21 | Link to Comment Stackers
Stackers's picture

Time to start stocking up on toilet paper in Greece

Tue, 01/14/2014 - 11:17 | Link to Comment Fish Gone Bad
Fish Gone Bad's picture

I wonder how the economic roach motel that is Iceland is doing?

Tue, 01/14/2014 - 11:44 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Are some of their bankers still in prison?  Yeah, I'm thinking 'merica could use some of that thinking...

Tue, 01/14/2014 - 10:17 | Link to Comment LawsofPhysics
LawsofPhysics's picture

A bit misleading, are you telling me that the cost of living in Greece has gone down for most greeks?  I think not.

No society/currency has ever collapsed/died because their purchasing power became too strong.  All "flation" debates are pointless distractions to divert your attention away from from the ongoing theft and fraud...

same as it ever was...

Tue, 01/14/2014 - 11:34 | Link to Comment tarsubil
tarsubil's picture

This is part of the theft. Credit implosion while the people in power print their money. This is part of allocating more and more wealth to a select few and it is going on right now in America. We may see prices go down while the money base goes up. That is the worst.

Tue, 01/14/2014 - 10:19 | Link to Comment Dr. Engali
Dr. Engali's picture

They have to get money flowing back into the Greek system somehow so they can Cyprus the accounts. A soaring stock market is just the ticket.

Tue, 01/14/2014 - 10:21 | Link to Comment Shaten
Shaten's picture

deflation is murder for any economy that has large amounts of outstanding debt.

Thus why America must leaglize all of the immagrants, to increase inflation.

Tue, 01/14/2014 - 10:26 | Link to Comment Sudden Debt
Sudden Debt's picture

America recovered when the stockmarket went up.

so why not copy the wealth effect?

Tue, 01/14/2014 - 10:40 | Link to Comment sunnyside
sunnyside's picture

How about this.....

 

-Deflation is not always a bad thing unless you are some debt driven asshole.

-That 21% drop in measured  economy has been largely picked up by the underground/off the books market (not that a lot of it wasn't already there).

 

Greece could be the one, by accident, to  show the world the way out of central bank domination.  Let the CB have their economy, and let the people live and have theirs.  (barring bullets flying).  

Tue, 01/14/2014 - 10:53 | Link to Comment LawsofPhysics
LawsofPhysics's picture

As I continue to say;  I remain long black markets and sharecropping...

Tue, 01/14/2014 - 11:34 | Link to Comment skistroni
skistroni's picture

Let me just add a couple of thoughts:

- How can you not have deflation when businesses and individuals are deleveraging at 4-5% per year ? There is simply much less available money to spend. Salaries and pensions have decreased, savings are decreasing in absolute terms and everyone is very careful about how we spend the money that is left. So deflation is not really the problem, being debt slaves in the first place is the problem.

- Regarding the off-book market: I cannot offer statistiscs of course, but judging from my personal experience, the "unofficial" economy must have shrunk by an even greater percentage, because there is much larger deflation there (regarding payment for services at least, prices are more than 50% down). 

Regarding showing the world the way out of bank domination: I used to hope for the same couple of years ago, when I first joined ZH, however I don't see it happening any time soon. The more the depression lasts, the more people seem to realize what a mess we have voted ourselves into. But this perception progress is as slow as the deleveraging above, which means, too slow. I can only hope for the younger people to wake up and change things and unfortunately, that doesn't seem possible without bullets flying. 

Thank you for the prompt.

Tue, 01/14/2014 - 11:59 | Link to Comment Ghordius
Ghordius's picture

skistroni, thanks for the thoughful input

- are you sure that deleveraging and deflation are related, in Greece? I agree on your point that there is less money to spend, particularly from salaries and pensions

- interesting your take on the "unofficial" economy. too bad there aren't any meaninful stats, for example "average amount in little envelope for doctor"

- of course I'd be very interested on your current take about the EUR, which I still see as a separate issue from "debt servitude"

meanwhile a general statement: how is it that the ZH "Commentariat" - when it comes to Greece - seems to be headed by neo-keynesianists? treating a 3% deflation in a country where the CPI includes food and gas as if the sky is falling? just as a reminder: gold backed currencies regularly gave years with this kind of price downturns, in the 19th

oh, and btw, Greek stocks were at bargain levels, a few days ago. French and Italian stocks still are. not shilling, just looking at the indicators that used to be relevant

Tue, 01/14/2014 - 15:20 | Link to Comment skistroni
skistroni's picture

Ghordius, I always value your posts, although I don't always agree with them. So many things to say:

I personally love deflation. It means I'm paying less at the supermarket, that my landlord takes the initiative to lower the rent by himself, extra-curricular education for my children is better and cheaper, that healthcare (out of pocket only now - no state funds left for that) costs less, and so on. And given that I have got over my (psychological) depression, I have restructured my business loans to pay a standard monthly payment and my business is growing again I'm better off by far. 

I love austerity too, after having to apply it to myself first, because on the large scale it means that corrupted officials cannot anymore spend the shit out of our money without considering the consequences. 

I would also love a common currency with a common fiscal policy and governance (I get downvoted in Greek fora often for that but I don't mind), however I tend more and more to believe that a fiat EUR cannot help us reach such a point. It rather seems to amplify the separatist attitudes that are now appearing all over the continent at international and intranational level. A harder currency might do the job. I do feel that Europeans have much more in common than they have differences. On the other hand, if we had some strong leadership here (to the likes of Tayip Erdogan or Vladimir Putin, who don't take shit from others) we'd probably be better off with our own currency. Unfortunately the anti-EUR Greek front consists of the Communist Party (old-style Stalinists), the Nazi party, and those others who have already moved their fortune abroad and are looking forward to cheap bargains in the country after we go back to the Drachma and the currency collapses. No leaders here. 

Lastly, I think I'll keep "Commentariat" as a very accurate depiction of what you describe. I wonder about that trend too. In Greek fora, paid shills are too obvious to miss and they get busted pretty soon. That was my first thought but in the end of the day I cannot judge the ZH audience. I can however safely say that most of them have not lived through what we've been through in the last few years, so I can understand misdirection and lack of understanding. It's a bit like CNN anchors commenting about the war and the killings in Iraq and Afghanistan from their nice and safe studios, if you see what I'm saying. Be well. 
Wed, 01/15/2014 - 03:58 | Link to Comment Ghordius
Ghordius's picture

thank you. great post. take care of that depression. for me, tomatoes work wonders (vitamin B)

Tue, 01/14/2014 - 10:48 | Link to Comment Rising Sun
Rising Sun's picture

markets up 19% in 9 days - wweeeeeee!!!!!  do it again ECB, do it again!!!!!

Tue, 01/14/2014 - 12:01 | Link to Comment Ghordius
Ghordius's picture

wrong address. it's still the FED, the BoE and all the big Asians that are moving those tides

Tue, 01/14/2014 - 10:53 | Link to Comment no more banksters
no more banksters's picture

Greece: The only "public" in banks is the debt that will be loaded on future generations!

http://failedevolution.blogspot.gr/2014/01/greece-only-public-in-banks-i...

Tue, 01/14/2014 - 10:57 | Link to Comment NOZZLE
NOZZLE's picture

I can almost hear the locals in their coffee shops yaking about the stock market prices, how great things are.  I remember when trickle down economics meant the govt. took less out in taxes instead of printing money and pushing it out to select friends.

Tue, 01/14/2014 - 12:54 | Link to Comment q99x2
q99x2's picture

If the recovery works that well for Greece then it can work here too.

Tue, 01/14/2014 - 13:06 | Link to Comment GoldIsMoney
GoldIsMoney's picture

That is good news for the Greeks, they can buy more for their remaining money. And I bet it's much more sparse these days. I hope they will find the courage to send their polticians where they belong - and that is not heaven.

Tue, 01/14/2014 - 13:15 | Link to Comment Peter Pan
Peter Pan's picture

The deflation in prices is nothing compared to the deflation in wages and pensions.

Another point is that their figures for inflation/deflation are suspect unless rents and property values are not part of the index. Proprty values are down by at least 50% and rents not far behind that.

The government's boast of a primary surplus of one or two billion means nothing when you are sporting debt of over €320 billion.

After 4 years of ruinous evonomic medication one comes to the conclusion that the medication is intentionally poisonous.

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