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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laomei's picture

what happens when you need something and the provider of that wants nothing you have? it's called you find and get something he wants.  simple.

 

people have done without money for a long time and it really didn't hurt anyone.

chosen's picture

Right, you find somebody (X) who wants your stuff and you know the shoemaker wants his (X's) stuff.  So you trade with X, then you trade with the shoemaker.  Some people will become merchants, like middlemen or tinkers.  Everybody gets to know everybody and they all try to get along.  It's not as horrible as the fiat-freaks want to think.  Eventually something like a bunch of iou's happens. 

laomei's picture

you end up with traders in the middle who are willing to take stock of things in exchange for things you need to make your deals happen.  they see a material gain from it and actually provide a service.  and yes, you eventually start seeing IOUs... as a farmer with 10 head of cattle can offload them to a trader who has no facilities to keep them, so a deal is worked out wherein the farmer keeps the cattle till the trader wants/needs them and is compensated in some form or another.  but it's essentially an IOU.

 

is there a problem with that? not really.  nor is there a problem with it becoming vouchers for material goods that actually exist..  Actually lots of forms of trade can be carried out in this manner, because it was for thousands of years without much issue at all.  Coins and whatnot were for the kings to play around with, normal folk just used barter.

Hobbleknee's picture

Except it's not always as easy as finding one middle man. It could take 10 trades to get what you want. And then you've spent the week trading, instead of producing or hunting. Look at history- there are no advanced civilizations based on barter economies.

TsyFox's picture

The limitations of barter that you refer to are the reason the concept of real money developed. TO PROMOTE COMMERCE.

REAL MONEY, as in COINAGE, not promissory notes from a central bank, aka ROTHSCHILD TOILET PAPER.

cheech_wizard's picture

>we are all reduced to hunters and gatherers.

No, the human race has always been hunter/gatherers... The only difference between now and then is what we hunt and what we gather.

large_wooden_badger's picture

Just a shot in the dark here, but did you get a degree in economics from a prestigious American university?

El Vaquero's picture

Perhaps at first, but eventually a few things would start getting used as currency.  Kind of like salt during Roman times being used as the medium by which to pay soldiers.  Or whatever the de jure cereal grain was in various ancient civilizations.  

knuppel's picture
knuppel (not verified) Jul 29, 2015 12:34 PM

Sigh, be sure to mention nazi in the headline again.

These Greek scammers are free to leave the eurozone anytime they want. Bye!

European American's picture

Watch closely my friends, in America, observe the template for the fundamentals in Bartering. This is about as close to economics 101 as it gets. Primative but no usury involved, i.e. cut out the (tribes) middle man.

Meat Hammer's picture

I'd take primitive freedom over modern slavery any day.  

More Ammo's picture

I will gladly pay you on Tuesday for a hamburger today....

OpenEyes's picture

Your avatar caught my eye

Latitude25's picture

"Now, the situation has gotten so bad"

Looks like an improvement to me.  Soon to start using gold and silver coins as "barter".

gwar5's picture

Well, good. I hiope the troika has fun taxing the NWO's barter economy. 

Latitude25's picture

Time to barter bitcoin?  LOL

SmittyinLA's picture

barter is not collapse, but the opposite of collapse, barter is freedom, uncontrolled capitalism, barter is the free market, barter will put food on the table and fuel in the tank, "barter is the tide that shows whose is swimming nakid", Buffet is ready to barter, Gates is ready barter, Musk is ready to barter. 

Barter police coming to a home near you. 

Baby Eating Dingo22's picture

Greece?

Is that even relevant anymore?

Stare at Yellen long enough and her eyes turn into gumdrops, hair a silken scarf,  and her chin appears as three supple young breasts 

rsnoble's picture

A full-blown barter system is a real economy.  One based on the nuts and bolts of survival.  The threat are a few of the limp-wrist fucktwats in the shadows that have more a mind to fuck everyone over, instead of do real work, and conspire to fuck people over.  And thus the birth of wallstreet and idiots like Obama and Piers Morgon.  "Don't you dare trade that milk for having your lawn mowed without giving me 20% or ill throw your ass in jail!!"

Our entire system is a goddamn fucking joke and now these satanic dipshits have nukes at their disposals also.  We could crash tomorrow, go into a barter sytem, everything would be working great and here comes the remnants of the DC Cops to fuck it up again.

Meat Hammer's picture

"Don't you dare trade that milk for having your lawn mowed without giving me 20% or ill throw your ass in jail!!"

And there it is....succinctly and beautifully illustrated.

+18 trillion

HYMN's picture

Jail will become a popular alternative for some, 3 hots and a cot much better than taking your chances under the freeway or storm drains.

lakecity55's picture

Hello, Anderson Cooper with another dick up my ass. Next up, after our commercial for Cait Jenner Beauty supplies, we find that Greeks are now in popular demand in Amerika, teaching Americans the finer points of Barter in our new Soviet Economy."

Between Terrorist attacks by Syrian Refugees allowed into the country by Hussein I, the Premier has praised the Greek Instructors.

"Although Michael and I will never dumpster dive, it's great to know Americans are learning new skills," said The Premier at a Ruth's Chris Steak House in Chicago.

"In other news, another 200 Ron Paul supporters were captured today and detailed to the new Work Camps in Arizona. Back after these messages."

Omega_Man's picture

US will be like this too... what's in your wallet?

PrimalScream's picture

the barter system is a very practical survival system.

BUT ALSO ... it represents a very basic form of the Free Market System.  Under the barter system, people determine prices by a fair means of negotiation.  This means that the economy is really starting to re-establish the free and fair price of goods. 

And this is actually a GOOD thing.

Madcow's picture

Sadly, Europe's political leaders get bankier and bankier every day.  Italy, I'm afraid you're next.  Then Spain.  Then France. :(

Thisisbullishright's picture

Barter will have to be outlawed and punished because the ECB and all the bankers need to extract their pound of flesh of EVERYTHING!!

Latitude25's picture

That's nearly impossible to do.  How can a Troika monitor every transaction on the street.  This happened during the depression in the US and the banksters were FORCED into submission (temporarily) until "money" was made available.

silverer's picture

Yes.  And bankers don't want a truckload of alfalfa, either.

Meat Hammer's picture

How would "they" pay the enforcers?  With worthless fiat?

buzzkillb's picture

I would not want to be an enforcer going into a new barter town of struggling people trying to stay alive, also becoming very connected as a group. I imagine the outcome would be the animals getting an extra meal and the farm getting some new red soil.

Frankly Speaking's picture

I have heard repeatedly from northern European countries, particularly Germany, as to "why should they subsidize Greek pensions?". The Euro was created as a blend of all member currencies where the weaker southern currencies, when blended with stronger northern currencies, provided a manufactured benefit to those northern countries, in particular, benefiting the north^s export competitiveness ( while harming their own). The question that the Greeks should be asking is " why should we be subsidizing German and northern exports?".

silverer's picture

It will spread everywhere until death is the new retirement.

Kprime's picture

death has always been the ultimate retirement.  Now I lay me down to rest and if my soul the lord should take....will someone please shut off that fucking alarm.

TsyFox's picture

This post is an absolute re write of the history of the creation of the Euro.

The Euro was CREATED to FACILLITATE TRADE between those countries participating in the Euro currency arrangement.

SUBSIDIES, such as a North to South arrangement that this poster is alluding to, WAS IN FACT STRICTLY FORBIDDEN by the MASTRICHT TREATY.

PoasterToaster's picture
PoasterToaster (not verified) TsyFox Jul 29, 2015 8:58 PM

Where did all the debt come from and why is it necessary in order to use the Euro?

Meat Hammer's picture

I'm sitting here daydreaming about bankers and politicians, sitting in the gutter wearing the threadbare remains of their designer suits, begging for crusts of bread as they slowly starve....because they've never produced a damn thing in their lives and don't know how to do anything other than use double-speak and chicanery to enrich themselve at the expense of the people.  

The guillotine is too good for them.  I want to watch them suffer as they fade away.

large_wooden_badger's picture

I'd like to watch their bellies swell from long-term malnutrition, but they'd eat each other first before that happens

Meat Hammer's picture

I'd pay 3 bales of hay and a donkey to watch that.

large_wooden_badger's picture

Now that's putting an ass on the line. Let's bid this one up!

Baa baa's picture

One spotted donkey with harness...Brays constantly.

large_wooden_badger's picture

"Sure, he talks too, but the trick is getting him to shut up."

HYMN's picture

There's a ranch in montana between missula and livingston that is the "Spotted Ass Ranch" You won't get any cheap ass there, they're all primo stock. I don't know why, forgive me, your reference to spotted ass brought on the memory. Enjoy your day.

Chuck Knoblauch's picture

Bartering is better than slavery.

Hope you bought food and water to barter with?

Buy some guns.

cwsuisse's picture

I am not so sure that bartering is backwards - maybe it is rather fast forward. With the help of the internet bartering is going to be efficient and it saves up to 23% in VAT. Schäuble will love bartering. 

NoWayJose's picture

Bartering and trading posts existed in the United States well past the Frontier Days - sometimes with beaver pelts, chickens, buffalo robes, or even gold and silver. Bartering really did not fade until - well until the Federal Reserve was created. Hmmmm.

silverer's picture

Maybe Greece can slide back all the way to the beginning of their history.  There - fixed it!

Baa baa's picture

You sound like a federal bureaucrat.

MASTER OF UNIVERSE's picture

By "Nazi occupation" do you mean Hitler's SS, or Goldman Sachs executives?

Totentänzerlied's picture

"means of short-term economic survival."

Or as we say, "transitory." Yeah, good luck with that:

http://mazamascience.com/OilExport/output_en/Exports_BP_2015_oil_bbl_GR_...

Production = 0. Imports and consumption contracting YoY for nearly 10 years now. Chance of economic stabilization, let alone "recovery", = 0. Economies do not have a reverse gear - nor even a neutral gear.

Being carless beats being foodless. Greeks are learning just how much of their "economy" (and society) is truly worthless at the instant the marginal barrel of crude becomes slightly unaffordable. Long bicycles and draft animals. They will be rationing (not by choice, as if) oil imports for commercial transport, where it actually earns its keep. The fact that we aren't really seeing this yet simply tells you that ... we ain't seen nothing yet.