Total Collapse: Greece Reverts To Barter Economy For First Time Since Nazi Occupation

Tyler Durden's picture

Months ago, when Alexis Tsipras, Yanis Varoufakis, and their Syriza compatriots had just swept to power behind an ambitious anti-austerity platform and bold promises about a brighter future for the beleaguered Greek state, we warned that Greece was one or two vacuous threats away from being "digitally bombed back to barter status."

Subsequently, the Greek economy began to deteriorate in the face of increasingly fraught negotiations between Athens and creditors, with Brussels blaming the economic slide on Syriza’s unwillingness to implement reforms, while analysts and commentators noted that relentless deposit flight and the weakened state of the Greek banking sector was contributing to a liquidity crisis and severe credit contraction. 

As of May, 60 businesses were closed and 613 jobs were lost for each business day that the crisis persisted without a resolution. 

On the heels of Tsipras’ referendum call and the imposition of capital controls, the bottom fell out completely as businesses found that supplier credit was increasingly difficult to come by, leaving Greeks to consider the possibility that the country would soon face a shortage of imported goods. 

On Tuesday, we brought you the latest on the Greek economy when we noted that according to data presented at an extraordinary meeting of the Hellenic Confederation of Commerce and Entrepreneurship, retail sales have fallen 70%, while The Athens Medical Association recently warned that 7,500 doctors have left the country since 2010. 

Now, the situation has gotten so bad that our prediction from February has come true. That is, Greece is reverting to a barter economy. Reuters has more:

Wild boar and power cuts were Greek cotton farmer Mimis Tsakanikas' biggest worries until a bank shutdown last month left him stranded without cash to pay suppliers, and his customers without money to pay him.

 

Squeezed on all sides, the 41-year-old farmer began informal bartering to get around the cash crunch. He now pays some of his workers in kind with his clover crop and exchanges equipment with other farmers instead of buying or renting machinery.

 

Tsakanikas is part of a growing barter economy that some Greeks deplore as a step backward from modernity, but others embrace as a practical means of short-term economic survival.

 

When he rented a field this month, he agreed to pay with part of his clover production.

 

"It's a nightmare. I owe many people money now - gas stations and firms that service machinery. I have to go to the bank every single day, and the money I can take out is not enough," said Tsakanikas, who also grows vegetables and corn on 148 acres (60 hectares) of farmland.

 

"I've begun bartering in some forms - it existed in the past but now it is growing... Times have become really tough, and friends and relatives help each other out."

So Greece, the birthplace of Western civilization and democratic governance, is now literally sliding backwards in history.

The nation - which has already suffered the humiliation of becoming the first developed country to default to the IMF and which was nearly reduced to accepting "humanitarian aid" from Brussels when a Grexit looked imminent a few weeks back - is now transacting in clover, hay, and cheese. Here’s Reuters again:

Tradenow, a Website started three years ago to facilitate barter of everything from food to technology, says the number of users and the volume of transactions have doubled since capital controls came into effect on June 29.

 

"Before capital controls, we were reaching out to companies to encourage them to register," says Yiannis Deliyiannis, the company's chief executive. 

 

"Now companies themselves are getting in touch with us to get registered."

 

He rattles off a list of firms using the site to strike deals with suppliers: a car repairs shop that exchanged tyres with another firm for a new shower cubicle, a burglar alarm provider offering services in return for paper and advertising, an Athens butcher that trades daily meat supplies for services.

 

In the lush yellow and green fields outside Lamia dotted with cotton, peanut and olive groves, barter is also flourishing on an informal basis outside the online platforms.

 

Kostas Zavlagas, who produces cotton, wheat, and clover recounted how he gave bales of hay and machine parts to another farmer who did not have cash to pay him.

 

"He is going to pay me back in some sort of product when he is able to, maybe in cheese.”

Yes, "maybe in cheese", but certainly not in euros, especially if the growing divisions within Syriza render Athens unable to pass a third set of prior actions through parliament next week.

Should the vote not pass, it’s not clear if Greece will be able to obtain the funds it needs to pay €3.2 billion to the ECB on August 20 - a missed payment would endanger the liquidity lifeline that is the only thing keeping any euros at all circulating in the Greek economy.

On the bright side, "barter has been a part of everyday life for Greeks for a long time" economist Haris Lambropoulos told Reuters. The only difference is that now, "it is a more structured and organised phenomenon."

Maybe so, but this is one "structured and ordered phenomenon" that many Greeks would likely just as soon do without and indeed, the new barter economy is drawing comparisons to a period in Greece’s history that has gotten quite a bit of attention over the course of the last few months, and on that note, we’ll give the last word to Christos Stamatis, who runs the barter website Mermix:

"Of course, a barter economy is something that we shouldn't aspire to and should be a thing of the past - the last time we had it on a large scale was when we were under [Nazi] occupation."

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City_Of_Champyinz's picture

And Liberalism runs out of other peoples money yet again.  What a shocker, it only happens EVERY TIME.  Idiots.

UndergroundPost's picture

Please Greece...REJECT the chains of globalism, cast off your Brussels burden, escape the coming European crash. Nations will rise to help you, corporations will flood to your shores for non EU regulated business, and your example of shouting "NO" to INTERNATIONAL SOCIALISM/BANKSTERISM will be the shot of sanity heard around the world

Creepy A. Cracker's picture

Awesome!!!  Can't easily tax barter...

The corrupt Greek government will have to control themselves some way or another.

The balance of power will now shift to hot, young, women and people who can actually produce/repair things (food, fuel, etc).  Barter power!!!

FreeMoney's picture

Just watch the tax receipts implode.  The switch to barter will accellerate the banking and goverment collasp.

Meat Hammer's picture

And the leeches will have to produce or die, which is the natural order of things.

VWAndy's picture

What would you rather take in exchange for your efforts. Fiats,bitcoins or something real?

 Force is all that makes us use fiat. Catch 22 stop using fiat and the amount of force tptb can use againt you and your kids.

Publicus's picture

Bartering is not just something in the future, bartering is now.

Fish Gone Bad's picture

One big solar storm, or an EMP attack, and everyone will find out how worthless a lot of things are.

Headbanger's picture

Yeah but everybody will fuck like crazy

cheech_wizard's picture

and the problem with that is what exactly?

TheRedScourge's picture

Nothing, if you like living like they do in Ethiopia.

 

Say, why don't the farmers start demanding payment for their goods in cash? They'll be able to import Euros from other countries through the backdoor that way. That would solve this whole problem, because almost everything in the real economy flows up from agriculture, and as they'd be able to pay in real Euros for everything they use, the people would gain indirect access to a secondary source of Euros.

realmoney2015's picture

We are watching this unfold very predictably. 1) consumers lose confidnce in the system 2) consumers withdraw cash 3) capital controls are placed 4) cash is tough to come by, people get desperate 5) bartering of goods and services. This is how it has unfolded. 

here is what is yet to come (in terms of monetary system): 6) all tangible assets are highly sought after 7) people search for a new monetray system 8) they settle on gold and silver (after the outside central banks fail Greece a dozen or so more times).

Stuck on Zero's picture

Don't believe this simplistic "back to barter" business.  There are foreign banks operating in Greece, credit cards, Euro notes, dollars, silver, and gold.  Barter is probably 1%.  When the banks close the velocity of money accelerates to make up for the lack of volume.  I have been in African countries where I pay for a meal and the dollars I spend are traded within minutes.  The velocity of money is literally as fast as a messenger boy can run.

nink's picture

They will list "Bata econpomy" stocks and all will be right in the world again

Long-John-Silver's picture

people search for a new monetray system 8) they settle on gold and silver

A few will start using physical gold and silver here and there but soon after people with gold and silver will start writing script backed by the physical silver and gold they own. Most people will be more than happy to exchange script backed by gold and silver. Soon the script writers produce more script than they are backing with the gold and silver they actually own. As long as people are happy exchanging that script instead of exchanging it for physical gold and silver everything works fine. This is the way it's always happened and it will happen again. After a few years the script writers no longer actually own any physical gold and silver. This is when they become banks.

Long-John-Silver's picture

people search for a new monetray system 8) they settle on gold and silver

A few will start using physical gold and silver here and there but soon after people with gold and silver will start writing script backed by the physical silver and gold they own. Most people will be more than happy to exchange script backed by gold and silver. Soon the script writers produce more script than they are backing with the gold and silver they actually own. As long as people are happy exchanging that script instead of exchanging it for physical gold and silver everything works fine. This is the way it's always happened and it will happen again. After a few years the script writers no longer actually own any physical gold and silver. This is when they become banks.

Milestones's picture

POPULLUUTION-THE PROBLRM NUMERO UNO.           Milestones

cheech_wizard's picture

You know nothing... which I deduced early on from your prior postings...

 

Q&A: Can Hot Water Harm Sperm?

I've heard that men should stay out of hot tubs while they're trying to conceive with their partner. Should I really believe this?

Yeah, this one's actually true. Avoiding extreme contact heat to his manhood will keep your guy's sperm count nice and high. Sperm is best produced when the scrotum is about one degree cooler than the rest of the body. Think for a second about the difference between male and female bodies — ovaries are housed inside a woman's body, where they're protected and kept warm. Testicles are outside a man's body, though, which shows us that their natural preference is to be cooler. If he simply can't resist a steamy soak, keeping the temperature below 99 degrees should keep his sperm safe and sound.
El Oregonian's picture

Hot steamy jungle fever VS. Ice cold Eskimo Popsicle stick.

It's all in the need...

ajax's picture

 

 

"Yeah but everybody will fuck like crazy"

A condom used once can be used twice?

large_wooden_badger's picture

Maybe latex if you washed it, lambskin, not so much.

There might be a distopian market need for reusable condoms.

Stock up now!

Alex DeLarge's picture

 Everybody knows to use a condom twice you simply turn it inside out and shake the fuck out of it. 

quasimodo's picture

Anymore, me and the Mrs. would rather just turn in early, watch King of Queens and dose off..........these days it's about quality and not quanTITy. 

cheech_wizard's picture

The stuff you learn over the course of your life... Not tonight dear, I'm suffering from atrophic vaginitis.

Handful of Dust's picture

None in Brussels missed even one 7-course dinner during the negotiations and subsequent capitulation of their slave state.

mc225's picture

kevin james is fairly funny on that show, but carrie steals it. anyway, classic show; i've watched every episode probably at least 2 times... (that's nothing compared to seinfeld... probably 4 or 5 times for every seinfeld)

Calmyourself's picture

You will be worried if you can dig holes fast enough as every nuke plant melts down...  Think people, pumps move water to cool fuel pools and reactors, electronics fry= no pumps= meltdown=spent fuel pools on fire.  Barter ha, for what lead underwear?

large_wooden_badger's picture

What a beautiful thing that will be to watch

weburke's picture

What is beautiful to elites, is the land now available to buy, and the serf class forming, and the excess folks, now starting to flee. Really, some things are just sensible when you consider elite desires.

weburke's picture

What is beautiful to elites, is the land now available to buy, and the serf class forming, and the excess folks, now starting to flee. Really, some things are just sensible when you consider elite desires.

A Nanny Moose's picture

The Statists and their economist Pets will simply blame the rich for evading taxes....again.

Meat Hammer's picture

Fiat is fiat.  Money is whatever two parties engaging in voluntary exchange say it is.

Fret not, people of Greece.  Freedom is more difficult than slavery, but freedom is a beautiful thing.

withglee's picture

Fiat is fiat.  Money is whatever two parties engaging in voluntary exchange say it is.

First sentence says nothing. Second sentence is just flat out wrong.

withglee's picture

Money is whatever two parties engaging in voluntary exchange say it is.

For those down voters: This statement explicitly says that any object of simple barter is money. Is that really what you want to say? Actually it says both objects in the exchange are money. Is that really what you want to say?

DaveyJones's picture

actually his statement says something much different than your interpretation

Deathrips's picture

A promise is not a fungible thing ...especially from a liar.

Remember that.

 

RIPS

FrankieGoesToHollywood's picture

Money can also be what one party says it is during an involuntary exchange.  The US Federal goverment will tell you must pay your tax bill in American dollars.  period.  or go to jail.

large_wooden_badger's picture

Hot young women will always be powerful, but without the brains to command such power, it's wasted pretty quickly. Over the long term, the smart ones will prosper, and the lazy slow-witted ones will suffer.

Handful of Dust's picture

Can you please send the beautiful ones with no brains in my direction? I can offer them ... some succor.

mc225's picture

indeed, beauty can be fleeting, and it seems only a small percentage of women are able to parlay that into being set financially for life... but maybe most of them are after love rather than money... who knows?

1033eruth's picture

So, how many are trading with their gold and silver?  Lets see, how many bales of hay = 1 ounce of gold?  

How do you give change?  Oh, that's where the silver comes in handy.   

fallin_knife's picture

For knuckling under to the Troika, the Greeks deserve to be reduced to a stone age society.  No organization, no government, just a simple hunter/gatherer existence.  The Riech should punish the Greeks very severely to discourage Italy, and the other serf "nations", to stay in line.  What a pathetic joke Europe has become.

falak pema's picture

you mean put Plan B in place even without Yanis? 

Great cojones of fire! 

If they do it and SUCCEED they will have to build a shrine to Yanis's penis effigy like the symbol of liberty!

Greece will have its new Eiffel tower! On the PArthenon. The phallic Hermai resurrected! 

Imagine all the German tourists then coming to gawk at the Greek wonder that destroyed the Euro

All future trade balance problems solved! 

mtl4's picture

Well done Greece, now we need to start seeing local currencies>states consolidate currencies>national currency>Drachma reborn

dontgoforit's picture

Yes; but don't blame the farmers.