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Greek Financial Crisis Is an Opportunity For Bitcoin
An anonymous reader writes: Greece's economy has been in trouble for several years, now, and a major vote next weekend will shake it up even further. The country can't pay its debts, and the upcoming referendum will decide whether they face increased austerity measures or start the process of exiting the Euro. One side effect of the crisis is that alternative currencies like Bitcoin suddenly look much more attractive as the "normal" currencies become unstable. "Tony Gallippi, the co-founder of bitcoin payment processor Bitpay, tweeted on Sunday night that he expected the price of bitcoin to rise to between $610 and $1,250 if Greece exits the Euro. The currency is currently worth $250. Part of the reason why the crisis is so tempting for proponents of the cryptocurrency is the echoes of a previous crisis in the Eurozone: the banking collapse in Cyprus in 2013, which saw that nation also impose capital controls to prevent massive outflows of currency from the panicking country. That collapse came at the same time as the first major boom in the price of bitcoin, which began the year at less than $20 and peaked at ten times that by early April – before it all came crashing down."
Yes, throw your money into the Bitcoin pyramid scam! Surely that will fix everything!
"Tony Gallippi, the co-founder of bitcoin payment processor Bitpay, tweeted on Sunday night that he expected the price of bitcoin to rise to between $610 and $1,250 if Greece exits the Euro. "
In hopes of getting everyone to quickly buy Bitcoins so it actually rises and he can sell. Nice try.
>> alternative currencies like Bitcoin suddenly look much more attractive
The problem most Greeks suddenly face is that their money is now locked up as electronic balances in banks that have shut down for a week and won't let them have more than 60 euros at a time. After crises like this (even America's own "great recession"), people tend to prefer forms of money are more than just bits or fiat paper, such as gold and silver.
Bitcoin is not the answer. The answer is to blame everything on the greeks, and BTFD.
The greek financial crisis was brought on by a neoliberal government that promised the moon and stars, never collected tax, and drove itself into bankruptcy by securing loans (some predatory) that it could never repay. 23 years of national economic policy are coming home to roost, much as they did in the united states during the housing collapse, except the frameworks are radically different.
Greeks aren't generally accustomed to paying tax. Free medical and social services, some wildly more generous than the average western nation, are normatives they enjoy, and expect to enjoy regardless of income. shifting greece from a two decade model of tax evasion to even moderate tax reform will be met with cars burning in the streets because the average greek voter isn't privy to the fact that the government, in order to remain popular and in power, basically spent itself into oblivion.
exiting the euro may be the cure. Greece seems to be a country that doesn't consider capitalism in the western sense. theyve shunned the world bank strategies of privatized education and water. Evergrowing GDP. endless investment, and cloistered monied elite don't necessarily factor into the countries priorities. It will be a hard road for greece because many other nations will be very reticent to trade after an exit, but it will also afford numerous opportunities for local industry to emerge and thrive.
Good people go to bed earlier.
Ponzi
Scam
MtGox
Not backed by anything
No "Full faith and credit"
Can't pay taxes
Money Laundering
Drugs
Silk Road
DPR
>50%
Gold
Executive Order 6102
Ok, now that is out of the way, we are ready to discuss the issue at hand.
Prove anything by multiplying Huge Number times Tiny Number
I have some magic stones available for just this purpose. They each have a unique serial number laser engraved on them and there is only a limited run that I will be producing. This scarcity factor will make them an ideal replacement for cash in the economy, and you can trade them anonymously among yourselves to prevent the tyranny of an oppressive government.
So come to me with your suitcases full of that worthless government backed paper money and get some of my magic stones - let us save the world together!
Tony Gallippi, the co-founder of bitcoin payment processor Bitpay, tweeted on Sunday night that he expected the price of bitcoin to rise to between $610 and $1,250 if Greece exits the Euro. The currency is currently worth $250.
So the conservative estimate is that your investment will more than triple, and you could potentially get returns of 500 percent.
I don't need to listen to the ads on right wing talk radio anymore, I can get all my financial tips from Slashdot!
Few things on this planet could possibly be flakier. Greece has to do like Iceland and arrest the bankers who stole the money and empty their accounts instead of stealing from depositors.
“He’s not deformed, he’s just drunk!”
I know when my country is looking at economic collapse I'd look to move all my money into a currency that's going to double-quintuple in value nearly overnight. That's the stability I want and look for. Plus think of the literally 2 or 3 actual real retailer in the country that even know what a bitcoin is, let alone accept it for payments that I'll be able to spend my new found wealth
How is a jump from $250 per unit to between $610 and $1250 (an increase of between 244% and 500% against the dollar) any more stable than either the Euro (~15% fall over the Dollar during the past year or so), the GBP (~10% rise over the dollar during the past year or so).
Something doesn't make sense.
Exactly like Cyprus. Go ahead and buy bitcoin now, at a mere $250 / 1 before it gets to ~$800. I'm sure all the Cypriots that bought into it and saw it crashing down to a quarter of its price were overwhelmed with joy.
That doesn't make any sense for the ones who bought at $800; they'd be upset because they LOST 75% of their money! The only Cypriots who should be happy right now are the ones who bought in at around March 2013, before the late 2013 bitcoin bubble, because the price is still a lot higher now than it was before the Cypriot crisis.
The country can't pay its debts, and the upcoming referendum will decide whether they face increased austerity measures or start the process of exiting the Euro and face even worse austerity.
FTFY.
Leaving the Euro will mean that the country has defaulted, and whatever currency they put in place will have no value at all. The government will be bankrupt and will not be able to pay civil servants or pensioners. There are only 3 ways this goes:
- Creditors accept to write-off some of the debt. They cut their losses and allow Grece to survive, in a situation which is actually bearable.
- More austerity, from inside the euro. Hard times ahead.
- Default. Chaos, Civil War.
Humanity and Finance don't go together very well...
It should read. "Is the Greek financial crisis an opportunity for Bitcoin?"
And thus, the answer is "NO!"
I'm a good cook. I'm a fantastic eater. - Steven Brust
"capital controls..." "Exactly like Cyprus."
Right! Except they left the London branches open so the Russian mob could get their money out real quick. Ah, well... austerity or war, take your pick
“He’s not deformed, he’s just drunk!”
They vote is too late, they will default. Yves Smith over at NakedCapitalism lays it out nicely.
"We described in detail how the referendum scheduled in Greece for next Sunday, July 5, is a cynical exercise in democracy theater. The Greek people are being asked to vote on a (draft) proposal by Greece’s lenders to unlock €7.2 billion in funds, the last portion of the so-called “second bailout” agreed by the Greek government in 2012. Tsipras knew at the time he announced the referendum that the proposal expired on June 30; that was the known-well-in-advance final date for the bailout terms to be agreed if each and every one of the 18 Eurozone countries agreed. We said it was a no-brainer that they would not agree; in Germany as with some of the other countries, it would require parliamentary approval to accommodate Greece’s too-late request, and there was no reason for any of them to cut Greece slack when the government has plenty of opportunity to schedule the vote in time, so it actually would inform the government’s actions.
Instead, Tsipras has already taken the decision to miss the €1.6 billion IMF payment due June 30 and the €3.5 billion ECB payment that falls on July 20, while falsely telling Greek citizens that they have a say in this momentous choice."
http://www.nakedcapitalism.com...
I came to the datacenter drunk with a fake ID, don't you want to be just like me?
Aww, it's cute that you think you can play crypto-economist!
What he doesn't get is that the more Tsipras delayed the referendum the more time he gave for people to get their money out of their bank accounts.
That's why it took so long.
An interesting article in Forbes (http://www.forbes.com/sites/timworstall/2015/06/28/so-greece-has-imposed-capital-controls-too-bad-its-just-for-the-normal-people/) makes the point that the rich and the smart money left Greek a few months ago, and it is Joe Sixpack that is trapped and going to get shafted.
The only solution offered for this problem is to insist in future that politicians and bankers behave. Bitcoin is not mentioned. Take your pick, who do you trust? - political behavior modification or the blockchain? Alexis Tsipras or Satoshi Nakamoto?
Prove anything by multiplying Huge Number times Tiny Number
Just 2 years ago the legal retirement age in Greece was 57. I think it's been changed to 61 now and there was talk of moving it to 63, but generations of Greeks have been coddled and given so many handouts by the government that they are going to riot if they have to face reality. As you point out, bit coin can't solve the problem of an entire nation so addicted to entitlements that it can't accept any way out of the crisis that doesn't involve no changes or hardships at all.
You forgot stability.
Sorry, teleporters just kill you and then make a copy. A perfect, soul-less copy.
No matter how bad the Greek crisis gets, no matter how much of a haircut people get on their savings from any currency swap, it will still be less risk than bitcoin.
One side effect of the crisis is that alternative currencies like Bitcoin suddenly look much more attractive as the "normal" currencies become unstable.
Bitcoin will not be more stable or attractive than other currencies including the dollar or probably even the euro except in some weird corner cases. If someone is putting money into bitcoin because they think it is even relatively stable then they are an idiot. If someone wants to use bitcoin to transfer money then there is a relatively small risk there but you'd have to be pretty dumb to just buy and hold bitcoins for any substantial length of time. Even if Greece does exit the Euro it isn't going to make bitcoin meaningfully more sensible than it already is. If someone wants to swap currencies to hedge against currency fluctuations I can think of a huge number of options I'd consider long before bitcoin for that purpose.
Tony Gallippi, the co-founder of bitcoin payment processor Bitpay, tweeted on Sunday night that he expected the price of bitcoin to rise to between $610 and $1,250 if Greece exits the Euro. The currency is currently worth $250.
I rest my case. If it can go up that fast then it can (and probably will) go down just as fast. Bitcoin is not a place anyone should be comfortable keeping their money for long unless they are speculating.
Tony Gallippi had no idea about economics or the real world. Inflation is already high in Greece which prevents people from buying bitcoin and with yesterday's news the people certainly cannot afford to buy bitcoin.
Besides what good is bitcoin if you cannot buy food or pay bills? You exchange your bitcoin at a bank? A bank with no money? A smart person would have purchased gold, silver, or some other commodity that will sustain it's value.
Bitcoin is nothing but a tax on stupid people.
As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties:
– boring grey in colour
– not a good conductor of electricity
– not particularly strong, but not ductile or easily malleable either
– not useful for any practical or ornamental purpose
and one special, magical property:
– can be transported over a communications channel
If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it.
Maybe it could get an initial value circularly as you’ve suggested, by people foreseeing its potential usefulness for exchange. (I would definitely want some) Maybe collectors, any random reason could spark it.
Don't forget Ransomware (Cryptowall and the like)
Yeah. Actually Bitcoin is a terrible idea. To replace one deflationary currency they can't print (Euro) for another (Bitcoin).
No my dear friend. It's fiat currency they need right now.
Follow my links for free bitcoins and dogecoins!
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Correction about the referendum topic: There is only one question. "Do you agree with the proposed program of the troika?".
((NO != "we want to exit the euro") && (NO != government will push for euro exit))
PS: Greek here.
Since we aren't thinking for ourselves on technical or economic matters, maybe we should just redirect all bitcoin stories to the Federal Reserve homepage and be done with it.
The problem most Greeks suddenly face is that their money is now locked up as electronic balances in banks that have shut down for a week and won't let them have more than 60 euros at a time.
They'd have a LOT bigger problem if there was a bank run. Then a lot of them would have access to none of their money. Of course they could keep their money outside of the banks but that's got its own set of problems.
After crises like this (even America's own "great recession"), people tend to prefer forms of money are more than just bits or fiat paper, such as gold and silver.
Really? Go take a few ounces of gold bullion to McDonalds and try to buy a burger with it and let me know what happens. Furthermore whether you have gold or fiat currency does not affect whether a bank run can occur. Bank runs happened long before the gold standard was eliminated. While it's not a bad idea to have some amount of gold as an asset it doesn't solve problems like the ones facing Greece and Greek citizens right now.
This sort of garbage just proves how financially inept anyone who thinks BitCoin et al have any sort of long term future is. Sure, it appeals on a nerdy/privacy/stick it to da man level but most of us are in the real world. This is not how it works, this is not how countries work, this is not how global financial processes work.
And whose ass did those numbers get pulled from?
I want a list of atrocities done in your name - Recoil
If the success of an asset or currency is predicated on a doomsday scenario then that asset/currency is doomed itself.
What would happen to the value of the Yen or the Dollar (within Greece) if they left the Euro? Almost nothing.
So why would the Euro suddenly become worthless? All the remaining countries like Germany will happily accept it in return for goods and services.
It's like when a stereotypical virgin geek gives relationship advice.
I realize that any instance of fiat currencies looking foolish is a happy day for the goldbugs, physical and virtual; but I'm not sure I follow:
Greece has been part of the euro zone for a while now, any remaining pre-euro currency is just a collector's item, and has no value now and no expectation of gaining value as the basis of a post-euro greek currency.
The euro itself will presumably do some fluctuating based on whether people are more nervous about the fact that the euro zone basically can't pull together when things look vaguely bad; or more enthusiastic about the fact that a weak member of the euro zone dropped out, leaving a stronger survivor group and establishing a precedent for (relatively) orderly drumming-out of any future weaklings.
In any case, greeks who currently have cash holdings either don't need bitcoins(if they just put the euros under their pillow they'll still be able to drive into the nearest euro zone country and spend them) or won't be helped by bitcoins(their euros are just numbers in the ledger of some deeply fucked bank that is imposing withdrawal limits or freezes, so they can't get them to hide under their pillow or to buy bitcoins).
A 'grexit' is actually more or less the opposite of the classic 'my holdings are in the dysfunctional currency of inflationistan; but capital controls are keeping me from expatriating them or buying dollars!' problem that bitcoin might actually be useful for addressing. If Greece drops out, all the greeks holding euros still have relatively hard currency, probably superior to whatever is introduced as a local replacement. They gain no obvious advantage from shifting euros into bitcoins, unless Greece bumps up their border controls into a veritable Berlin wall to prevent physical transport of currency; but continues to ignore online activity.
This story just seems orthogonal to bitcoins.
Bitcoin works by convincing others to buy into the game for the promise of returns, thus pushing up the price. So take any 'expert' who claims the value of bitcoin is going to boom, or "can only go up" with a bag of salt as its more likely that they are following their own interests and not yours.
Commodity-backed money, such as actual precious metals or precious-metal-backed-depository-receipts (or even gold-backed bank notes) from an institution that people trust, can be functional currencies in places where the currency is unstable and local laws or customs don't prevent it.
Heck, even in the Untied States of America, the US Constitution specifically allows states to mind gold and silver coins and declare them legal tender. In practice, this is not needed because relative to the cost of most goods and services, the US dollar is at least as stable as gold and silver, and declaring gold and silver as "legal tender" while maintaining a floating exchange rate with the US dollar would mean merchants who took both would have to re-price things in real time to prevent arbitrage-buyers from disrupting the system. However, it the US Dollar ever has runaway inflation, the option for states to declare gold and silver legal tender would make the option of having "stable" prices in gold or silver and "adjusted-by-the-minute" prices in US Dollars attractive.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
What is happening in Greece now will inevitably happen to every country who allow the central banks to provide their currency.
The basic concept of central banking is that a country borrows it's currency from the central banks - and is required to pay back the principal + interest. However, it is mathematically impossible to pay back the principal + interest from a pool of money containing only the principal. As a result, the banks will eventually own all real property and assets (collateral) of every country that they "do business" in.
This is where income tax comes in. Contrary to popular belief, income tax dollars do not go toward roads, schools and hospitals. Income tax (YOUR hard earned money) goes to pay the interest on the money the government borrowed from the banksters (instead of the government printing their currency debt-free) in an effort to keep the banksters from taking real-world commodities. For example, Canada lost its national railroad - Canadian National Railway - to the banksters in the 1970's. CNR is now a private corporation, and of all people, Bill Gates is a large shareholder.
The CRA/IRS are little more than glorified collection agencies for the banksters, supported by the federal government.
The practice of "fractional reserve banking" - that is, creating money (out of thin air) and lending it out at interest - is one of the biggest ponzi schemes ever developed; and is practiced by every commercial bank in the modern world.
Nearly every country on the planet has been swept into this scam. The few exceptions, interestingly enough, are (alleged terrorist/axis of evil) countries such as Iran and North Korea.
The only country that I am aware of that has rejected the central banksters and taken control of their own banking system is Iceland. Instead of getting a 'bailout' or 'stimulus package' (borrowing more money to pay the interest and delay the inevitable collapse), Iceland threw the crooked banksters in jail and disconnected from the central banking system. The rest of world really needs to follow suit.
For further information on the central banking ponzi scheme, I strongly encourage everyone to watch Money as Debt and read The Creature from Jekyll Island by G. Edward Griffin.
Political correctness is really just herd psychology pushed by insecure people who desperately seek social conformity.
If he were listing things Bitcoin doesn't have, that would be a good addition. Do try to follow along.
When the first country leaves the Eurozone, then it will make it easier for the next country in crisis to do the same.
This will cause those in weaker countries to look to something other than the Euro to store their long-term savings in. Bitcoin will be one of many options, as will metals, other major world currencies, land, art, collectables, and other items that are likely to keep their "real value" in the event this person's country exits the Euro and all bank accounts are re-denominated into a weaker-than-the-Euro currency.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Go on then mate, you put your money in fiat currency. Me personally I trust algorithms not politicians.
It sure will be attractive compared to the new drachma.
Considering you have no idea what currency Greece would go to post-euro that's a highly premature statement. Re-instituting the drachma might not be a great idea and might not even be practically possible. (It's not a trivial problem to switch over and it's not clear the greeks have a plan in place to do that) They could switch to the dollar, or the yen if they wanted to. In fact countries in financial crises with their currencies often do use a foreign currency instead of their own. In fact Greece could decide to use the Euro even if they weren't in the Eurozone. Not saying they will or should but they could.
In any case I disagree that bitcoin will be an attractive alternative to anything for most Greek citizens. There are much better options for most of them for any particular use case you care to mention.
Trying to push bitcoin only shows that the author has a poor understanding and an agenda. While you could, potentially, argue bitcoin in cases where a country's currency has collapsed, or is unable to be used to buy things from other countries. Bitcoin is highly volatile, a very poor store of wealth, but it is something you can spend and transfer, in some places at least, and at present it has value.
Well, that isn't an issue with the Euro. It is an extremely important and widely used currency, second only to the US Dollar. All Eurozone countries use it (by definition) which is quite a few major economies. As such it is also widely sought after in international currency exchanges. Euros are very easy to spend on the international scale. Many places will take them directly, and any bank will convert them.
Also the Euro is pretty stable. When you look at it compared to other major currencies like the Dollar, Pound, and the Yen it compares very well. All fluctuate, of course, but not very quickly. So it is a good store of value, you don't have to worry about losing your money. Works long term too, as many nations with good credit will sell debt instruments in Euros.
So there is nothing bitcoin solves here, because bitcoin is a currency and currency isn't the problem in Greece. This isn't Zimbawbe where the currency was worth nothing.
The only way it could "help" is to move money out in the event of capital controls on Greek banks. But of course:
1) You have to get the money out of the bank first, which a capital control can slow down.
2) The only way it facilitates that would be being less traceable. As I said, Euros are taken everywhere, you can convert them to Dollars or anything else.
3) Most importantly that wouldn't help the situation at all, it'd make it work. Might help an individual save money, but it would only worsen the situation.
Bitcoin swings but has historically bubbled and crashed with each bubble peaking over the previous. Smooth our those peaks and valleys and you have a constant upward progression.
Even if true that is utterly useless information as far as most greeks will be concerned. Long term trends don't matter at all when you have to buy in today to avoid a catastrophe.
Anyone who uses something as volatile as Bitcoin as a long-term store of value only has themselves to blame when things go south.
For me, personally, Bitcoin's primary utility is as a medium of exchange, not as a store of value. Thanks to Bitcoin-based and similar low-friction (read: low transaction fee) means of exchange, I can buy stuff from merchants that accept BC without dealing with typical currency-conversion fees. If I'm a seller, I can sell without dealing with the typical merchant fees associated with credit cards. Then again, I have the advantage that my nation uses a currency that is, for the time being at least, considered one of the world's major stable currencies.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Part of the issue in the Eurozone is that countries have control of fiscal policy, as in how money is spent and taxes collected, but not monetary policy, as in how much money is supplied and to where.
While monetary policy doesn't let you magic your way out of any situation (see Zimbawbe for an example) it can be useful. Have a currency that is weak or strong isn't inherently good and bad, but rather useful in different ways. So one country might wish to have a weaker currency, another a stronger one. Also it can allow for things such as higher inflation, which can be a problem, but can also be useful in some situations.
It wouldn't solve Greece's problem, to be sure, but there are ways it could potentially help.
You should trust trustworthy algorithms, not just all algorithms. Bitcoin in particular is a pyramid scheme algorithm.
The history of Greece as one of the cradles of "Western civilization" and as destination for those interested in religious history makes it a natural market for tourists.
Whether Greece makes a "little" money on tourism or a "lot" of money on tourism is a function of how hospitable it is to visitors. If the country as a whole makes it a priority to be very nice and welcoming to foreigners, they stand to reap a lot more in tourist spending than if they take tourism for granted or, worse, go out of their way to make tourists feel unwelcome.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
you can't conjure extra gold and silver out of thin air
There are two relatively "easy" ways to conjure gold and silver "out of thin air".
1) Steal it. The difficulty is comparable to stealing currency or base-metal coins.
2) Counterfeit it. If your country uses precious-metal coins, make counterfeits that contain slightly less precious metal. If it doesn't use coins, make bars or whatever that are adulterated so when you spend them, you instantly make a small profit on the adulteration (less the cost of counterfeiting). Of course you'll only be able to spend them at places that don't have the equipment to detect a slightly-adulterated bar or high-quality-fake coins, but that's part of the cost of doing business.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Using Bitcoin to trade doesn't make any more sense than using Google or Apple stocks to trade (with the difference that Google and Apple stocks fluctuate less rapidly in value). Oh, and the state-controlled water companies and the mostly state-controlled electricity company of Greece () accept payment only in Euros. And the special tax on all fuels (heating diesel, vehicle diesel, gasoline, LPG and CNG), which is seperate from VAT, is paid in Euro only, so gas stations have to charge in Euro. Even in if everyone else decides to sell you stuff Bitcoin, you still have to use Euros to live. BTW, if a country's currency become worthless (like a new Drachma will be), people typically use US dollars (see Zimbabwe), not obscure libertarian cryptocurrencies. Sorry.
LOL - Exactly! :)
Bare-metal gold is a very inconvenient currency, but it is reasonably good as a long-term store of value.
Counterfeit-resistant gold-backed paper money or counterfeit-resistant gold coins - where there is no doubt of the amount of gold in the coin - are much more convenient but I don't see many countries making reasonably-sized gold coins or currencies that, on any given day, have a market value in the $0.10-$20 range that most people need when they go buy groceries.
As a long-term (20+ years) store of value, most people should have a mix of asset types including at least a few weeks of easily-accessible spending money and several months of "I can get to it within a few days" spending money. In a time of crisis, the "few weeks of spending money" is probably going to be the actual national currency or coin or it will be a commodity that is easily carried in your pocket and bartered, such as unopened packs of cigarettes in the battlefields of WWII.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Even in if everyone else decides to sell you stuff Bitcoin = Even if everyone else decides to sell you stuff in Bitcoin
... as long as the life expectancy of 57-year-olds is short enough that it doesn't bankrupt the economy.
They key for a "generational-tax" or "government-paid" retirement system is that the money coming into the system is at least as much as the money going out, at least for the long haul. If 57-year-olds die so quickly that the working population can easily meet all of their retirement expenses, then retiring at 57 isn't an issue.
Wait, this just in: The life expectancy of a 57 year old in Greece is a lot longer than 1 year, so long, in fact, that allowing healthy people to retire and draw a pension at 57 is not economically feasible.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
It's a completely arbitrary distinction in many ways. Forget the money: the problem is about stuff (goods, services, etc). The Greek government has been borrowing so that its people can have more stuff, and at this point It's not even about paying what they've borrowed so far, there's a substantial ongoing deficit that they need to deal with. As such, the people are poorer than they thought, and they're going to have to cope with it somehow. They can do that by accepting the poverty and choosing austerity: cutting benefits, raising taxes. Or they can respond to that with reforms in the labor market and other markets (working harder/smarter).
All you get by replacing the currency and then paying people in the new currency that's worth less is austerity by stealth, with a side of chaos and disruption. Which is what the leftists in charge of Greece will pick, since they ideologically reject the reforms and can blame evil outside influences for the chaos and disruption.
The World Wide Web is dying. Soon, we shall have only the Internet.
Fiat currency is based on faith. I'm pretty sure any paper money produced by Greece right now would garner no faith from anyone. It wouldn't be worth the paper it was printed on.
SJW's don't eliminate discrimination. They just expropriate it for themselves.
We heard the same during the Cyprus banking crisis.
At the time, a startup named Neo & Bee with a certain Mr. Danny Brewster as CEO, touted itself more or less the first bitcoin bank.
Anyway, turns out the guy left the country in a hurry amidst allegations of bitcoin fraud, never to be seen or heard of from again. All that's left is empty buildings with the Neo & Bee's logo outside, and (if you trust the media), unpaid advertising companies and unpaid employees.
So I say beware of people proclaiming they have magical solutions.
Trust them at your own peril...
Strange definition of "free" you have there. It seems like they want some personal data and for me to labour away at some game in exchange for Bitcoins. Not what I'd call free.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Interestingly, the National Bank of Greece is one of the eurozone institutions that has the facilities to print Euro bank notes.
Since November they have printed more than 13 billion euros of bank notes (against ELA funds) which Greeks are now storing under their mattresses.
One wonders what sorts of contingency the EU has for this. It would be the ultimate middle finger to the EU if Syriza decided to solve the ECB imposed liquidity crunch by literally firing up the printing presses, yet a uniquely convenient thing to do when stuck in a currency union. Normally, the ECB could punish them by cutting of access to the TARGET2 settlement system, but this is basically already the situation now with the ELA funds running dry and capital controls in place.
What a circus this could become.
WTF is that? How do you make money off that? Why would anyone give away free bitcoins? Nothing is free, after all.
"First they came for the slanderers and i said nothing."
In short they have no money now and nobody is willing to lend them more, so it's either cut spending or print more cash.
The problem isn't that they have no money now. They do. They have lots of Euros that have already been lent to them. The problem is that they owe much of it to creditors. They have the option (not a good one) of defaulting and keeping what cash they do have. Then they are de-facto still using the Euro even if they aren't in the Eurozone. It's going to be ugly if it comes to that though.
Of course as you very rightly point out, nobody will be willing to lend them more at that point so they are not in a good place no matter what they do going forward.
I keep asking this question and no one seems to have a good answer. How can an economy as small as Greece's; or for that matter Italy's and Spain's; send global markets and economies as big as Germany and the US into a tailspin? There is somethings very wrong with our financial and economic policies. All this tight binding of economies and fifnacial systems seems to be a recipe for disaster.
putting the 'B' in LGBTQ+
Not long ago, value of Bitcoin was around $1200. Now it is around $250.
Anyone buying Bitcoin for stability is too stupid. Anyone suggesting that the value of Bitcoin is about to rise to $600 or $1200 is attempting to pump the price in order to dump their holdings.
If a Greek citizen can buy a bitcoin, the same person can buy Euros, Dollars, or stock index funds, all of which are more stable. The author of this must be either financially ignorant or hyping bitcoins.
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It looks dangerous lol
"First they came for the slanderers and i said nothing."
I'm all over FIAT's website but can't find any reference to currencies, I think I'll ask my local car dealer
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That right there succinctly shows the mentality of those who support Bitcoin better than anything else.
It is just a way of trying to shirk his responsibility. Push it off on to the voters and then wring your hands as though there was nothing to be done. He knows, even if there was time, the voters would say no.
Whether Greece makes a "little" money on tourism or a "lot" of money on tourism is a function of how hospitable it is to visitors. If the country as a whole makes it a priority to be very nice and welcoming to foreigners, they stand to reap a lot more in tourist spending than if they take tourism for granted or, worse, go out of their way to make tourists feel unwelcome.
You can make the country hospitable up the wazoo, all it takes is ONE dickhead with an AK to fuck it all up.
Or one missing child.
Or a drowned one.
Or a rainy season.
Or a global economic crisis.
Or simply a fashion trend.
Tourism is a nice bonus and a source of foreign currency, but you can't run a country on tertiary sector alone - unless you are willing to be permanently in debt or permanently poor OR to end up exactly where Greece is now. Both poor and in debt.
Cause there is hardly a more literal way of signing off one's own economic security on "hope and prayer" than resting it on good graces of fickle foreigners bored with their everyday existence back home.
On top of it, to a small country, tourism is toxic.
It artificially raises the property value to unrealistic levels, prices skyrocket and it overflows the local services with people who don't pay for those services.
And you can't just tax them cause you don't want to scare them off or simply cause you can't properly charge for things like an increased burden on the environment or water supply.
Or police - which will inevitably become corrupt first time that either local or governmental coffers go empty and they either get told to "skin" the foreigners or to let them slide.
And corruption is again something that spreads across the entire society.
On top of that, it creates conditions where country's youth will spend their most productive years SERVING instead of studying.
And since the prices are up, when they age out of serving drinks to fat tourists, they won't have a home of their own, they won't have an education - so they end up unemployed.
Which is where Greece was going with their long term unemployment rising (with youth unemployment always staying lower while following a more jagged, seasonal, curve) until the introduction of the Euro brought it down - through heavy borrowing which provided money for make-work jobs.
People who were unemployed for decades got jobs. Yay!
Just before the shit hit the fan they were running the lowest long term unemployment in last two decades, while the wages kept going up.
As the debt kept climbing up as well.
Mit der Dummheit kämpfen Götter selbst vergebens
"Do Electronic Carpetbaggers Dream of Sheep (to Fleece)?"
They have industrial and decorative uses and a widespread base of people willing to own them. In the absence of large-scale deep-space asteroid mining technology flooding the market with excess supplies, they're going to remain fairly valuable.
Define "valuable", because in the last ten years the price has gone from US$400, up to over US$1800, and currently sits at about $1200:
* http://www.nasdaq.com/markets/gold.aspx?timeframe=10y
Even with inflation, I think most currencies of OECD countries have less turmoil than that.
While it's easy to ridicule some of the more fringe elements of "prepping", it is prudent to have the equivalent of $1000 in cash at your domicile, and about $200 in your wallet on top of that. During the giant black out of 2003 a lot of people were caught off guard when their cards wouldn't work because of lack of power. In 2012 Royal Bank of Scotland had huge issues with their system as well. So is your credit/debit card being locked because of the banks' internal fraud monitoring flagging it.
Having some paper lying about in an envelope is relatively cheap 'insurance' for these types of situations. And you're more likely to be able to exchange the paper for goods compared to shiny metals. It's also less likely to fluctuate as much (at least it's "internal" purchasing power).
If I had modpoints I'd give you all of them. I've been screaming this for years but for some reason people are obsessed with horrible, ineffective, dangerous deflationary currencies.
ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn
The historical evidence shows that Austerity causes demand contraction and often demand spiral, it has never in global history solved a budget crisis. The Euro eliminated currency barriers to unequal trade relationships which substantially hurt the Greece economy. Debts on a national level will only rise as long as there is demand for that debt and confidence in it, or banks out to make money by selling people shit and betting against it.
ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn
There isn't really anything else to discuss.
It's a giant ponzi scheme:
In a Ponzi Scheme, the founders persuade investors that they'll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.
A Ponzi scheme is a zero sum game. In a ponzi scheme, early adopters can only profit at the expense of late adopters, and the late adopters always lose. Bitcoin can have a win-win outcome. Earlier adopters profit from the rise in value as Bitcoin becomes better understood and in turn demanded by the public at large. All adopters benefit from the usefulness of a reliable and widely-accepted decentralized peer-to-peer currency.
It is also important to note that Satoshi Nakamoto, creator of bitcoin, has never spent a bitcoin (other than giving them away when they were worthless) which we can verify by checking the blockchain.
You should trust trustworthy algorithms, not just all algorithms. Bitcoin in particular is a pyramid scheme algorithm.
Yes- but you can trust it to be a pyramid scheme algorithm.
Greek people are set in their ways. Unfortunately many problems in Greece are caused by it's own Government not going after tax evaders. The International Monetary Fund and Greece’s other creditors have argued for years that the country’s debt crisis could be largely resolved if the government just cracked down on tax evasion. Changing Currency? Nah not in Greece. You don't want your currency mixed up in this unless you can afford to take a loss. Greeks are so set in their ways and the Government knows it. The Government also knows to mess with it's citizens you better know what you are doing or you could have mass riots.
If you need a good base to set up Bitcoins then consider setting it up in Puerto Rico. People abused for years. Many very poor but ready/eager for change. Many want a hand up instead of a hand out. Yes it's poor but think of the possibilities. Start from scratch.
Yeah... researching the stories of MtGox and Silk Road alone should be enough to keep most sane people from touching Bitcoin with a 50 meter pole.
As another commenter put it, trading one currency they can't control with another? And somebody decides to use some large clusters, or large cloud, to generate money and devalue it, or another what-was-it that just collapsed, with a hundred million or so Bitcoin money *missing"?
Fiat money that is *completely* under the control of the elected government seems to work for most nations.
mark "oh, and how many fiat USD is that Bitcoin worth?"
Austerity does cause demand contraction, but Greece is going to have to deal with it one way or another: there's no resources available for everyone to retire on a nice fat pension at age 55 anymore. It doesn't matter whether that comes out as a cut in euro-denominated pensions, or if that happens when people get drachma-denominated pensions: Greeks reliant on government funds must rely on less, because they're spending more than they take in, and it's pretty clear that lending money to Greece is less like lending and more like donating.
Now put a truckload of economic disruption on top of that mess.
The real way out for Greece was always securing a modicum of debt forgiveness and debt forbearance, plus enacting some economic reforms. The Greek economy is well-known as a sclerotic, over-regulated disaster area where you need to bribe corrupt bureaucrats to do anything and small-time rent-seeking plutocrats effectively own not just businesses but the right to operate important sectors of the economy. And the reforms were even going okay for a short while - real economic growth! - but the economic reforms proved unpopular with the leftists, and so this is what we get instead.
Glad it's not my country going through this.
The World Wide Web is dying. Soon, we shall have only the Internet.
That's because it doesn't have much stability.
Such nonsense. Austerity is not 'reform'. It is larceny.
“He’s not deformed, he’s just drunk!”
Using Bitcoin to trade doesn't make any more sense than using Google or Apple stocks to trade
Actually it might make sense. The problem is that there are government capital controls on all the standard financial channels to get money out of the Greek banks. While BitCoin is terrible as a store of value it excels at being easy to transfer whether or not a government says that you can. If there is some mechanism to get your Greek bank balance converted into BitCoins then you can transfer these to a foreign exchange and convert them back to another currency - or even back into Euros but outside Greece.
Yet another "Situation X makes the Bitcoin Scam look good!" article!
Bitcoin is a goddamn money pit. Sure, you can invest, and you can follow it and get glowing feels from a website telling you what your investment is worth.
Then, try to cash out... I dare you! I double dog dare you!
OOPS! NO MONEY FOR YOU!
Chas - The one, the only.
THANK GOD!!!
Bitcoin is not actually deflationary. Its supply grows constantly until it eventually stabilises. The fact that Bitcoin prices have fallen a lot is more because lots of new people have discovered the project and decided they want some, but that effect will eventually peter out as Bitcoin becomes boring and everyone finalises their opinions of it.
Greece doesn't need fiat currency. What Greece needs is hard money – like the Euro (which is hard-ish, though not as hard as Bitcoin). This is because the Greek government is notoriously corrupt and the fact that they couldn't just print the pensions of their civil servants was one of the few things creating pressure to reform, and preventing outright pillaging of the savings of Greeks who do actually work in the private sector. Seeing Greece as one monolithic entity isn't right: there are different factions, not all of whom want the government to suddenly be able to spend whatever it wants. Hence the Greek people apparently voting for both keeping the Euro and not enacting any spending cutbacks, a contradictory position.
Ultimately Greece is going to get a lot poorer, no matter what. In many ways it's practically a third world country, one that was simply kept afloat by huge injections of foreign cash. But it never really stopped being third world in the way that it was run.
Bitcoin could, theoretically, benefit some Greek people now in the heat of the crisis because the Greek government wouldn't be able to impose capital controls on it. Thus preventing the outright theft of whatever little cash Greek's have left in the bank (sorry, I mean, solidarity tax/haircut/pick euphemism of choice). It is no magical cure for Greece's problems but it could tip the balance away from a government that discovered it was paying salaries and pensions for entirely non-existent departments, and towards people who are just trying to make a living.
> Greek Financial Crisis Is an Opportunity For Bitcoin
Bovine manure. The greek who still have money to preserve are buying and hoarding gold and only gold, more specifically the british 1 pound coins (weights app.7,8 gramms and has 22 carats = 916/1000 purity).
Meanwhile, bitcoin is the fools' gold and the fraudsters' gold mine.
He forgot "deflation".
> One wonders what sorts of contingency the EU has for this. It would be the ultimate middle finger to the EU if Syriza decided to solve the ECB imposed liquidity crunch by literally firing up the printing presses.
Germany would order and assist Italy to militarily occupy Greece overnight, just like they did during WW2. The greek's fake Euro printing presses would be bombed to cinders by Eurofighters and any remains crushed under tracks by Leopard2 battle tanks.
Greece is a failed country and they should be partitioned. The mainland best goes to Italy (the Peloponessos used to belong to the Venetian Republic's colonial sphere for centuries, anyhow) and the Aegean islands should be sold to Turkey for top dollar to regain money to pay the lenders.
Greece is getting poorer and the debt is becoming unpayable. If they lower salaries to become more "competitive" in an open market with free circulation of people all it means is people will move to work elsewhere. And make the pension system even less viable.
So the Euro is "unstable" because most economists think a grexit will have some, but minor consequences on the other countries. .. oh, and "other currencies" are "unstable" too. .. but bitcoin which will apparently rise 3x in value during the next weeks, is not "unstable".
Yay for logic!
A month a go some businessman called Tony owed me $300k. Then I had a meeting with one of his 'advisors'. He offered to loan me $900k, deducted the $300k and now I owe him $600k - it's inexplicable !
The historical evidence shows that Austerity causes demand contraction and often demand spiral, it has never in global history solved a budget crisis.
That's like claiming emergency rooms are responsible for vehicular deaths just because so many people die there. No one goes through a crash bout of austerity because they're doing well just as no one goes to an emergency room unless they have substantial problems.
The Euro eliminated currency barriers to unequal trade relationships which substantially hurt the Greece economy.
In other words, Greece fucked around for a couple of decades rather than deal with the above problem. Now they're paying the consequences.
The time to implement austerity and similar measures would have been two decades ago. It's not like the "unequal trade relationship" showed up yesterday.
And austerity does work. The Scandinavian countries successfully practice austerity right now. When you control spending over generations rather than only when your creditors force you to, you can have a much better society.
Debts on a national level will only rise as long as there is demand for that debt and confidence in it, or banks out to make money by selling people shit and betting against it.
It's worth noting here that Greece lied about its financial health for a time (and may still be lying, not like I care). So some of that debt was picked up under false pretenses.
A Ponzi scheme is a zero sum game.
All economies are zero sum.
The whole Universe is zero sum.
"Geek Financial Crisis Is an Opportunity For Bitcoin" :P
Ant(Dude) @ Quality Foraged Links (AQFL.net) & The Ant Farm (antfarm.ma.cx / antfarm.home.dhs.org).
Not being able to print Euros may of called for the collapse of Greece but under the Drachma Greece was already broken. Goldman Sachs committed fraud/trickery to get Greece into the EU in the first place. Therefore this has nothing to do with printing money or not printing money it has to do with "the real economy".
Printing money only camouflages the damage for a later day which is what they'll do to bail out Deutsche Bank to stave off an 09 type collapse this time around. Because at the end of the day someone somewhere will print money somehow to solve the problem.
Fiat has always resulted in these types of issues because they create debt based economies dictated by central banks. This is the very problem. One day people will see through the lie and all hell will break loose. This is enviable.
A gold standard may not be feasible but it is practical. Bitcoin has the same practicality but the question is, is it feasible? A tip, look into the actual mining process, learn about the sub types of bitcoin, then you'll see its value.
"The currency is currently worth $250. ..... which began the year at less than $20 and peaked at ten times that by early April – before it all came crashing down."
So it started 2013 at less than $20 and went up ten times. That would put it around $200. Now it is $250, and you call that "crashing down"?
Well said. Sieg heil!
Bitcoin is deflationary in the long term. It produces coins at a constant rate that declines over time and when it reaches a specific number of coins no more will be generated. It was designed to be and structured to be deflationary, the point of finality being in a couple decades. Any inflation within bitcoin is temporary and fleeting. Any good currency normally has inflation at 2-5% annually to encourage spending of currency, discourage hoarding, and make debts less valuable over time to prevent a buildup of crippling debt within economic sectors. Bitcoin's gradual increase in price over time is part of that deflation, and what makes it an investment product like gold. Unless production is tied to demand for the currency, you have a deflationary currency. Austerity has *always* hurt more than it helps, as causing demand crisis/spiral lowers gov't revenues substantially and the increased poverty puts more pressure on it. The Euro eliminated currency market barriers to trade deficits (in order to import more than you export with fair currency markets between countries without prices growing exponentially on imports is to have a negative import like investment, similar to the US), and Germany capitalized on this with enormous trade imbalances that helped create and expand poverty in Greece. Yes the country was corrupt and deep in debt beforehand, yes it had made a great many mistakes, but you don't understand currency, bitcoin, or the effects of deflation.
ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn
Because the Euro is not "THEIR" currency to do with as they please. And the drachma no longer exists at all, so there's no parity as you had with your peso. ...
The thing is, if Greece exits the EURO, then all bets are off, because there are a few other countries would jump the Euro shortly after, and then the Euro is worthless as shit. Which would be GREAT for the USA, since the USA has shown EXTREME animosity to any country attempting to undermine the petrodollar, and eliminating the Euro as a competitor is a brilliant move.
So, follow the money. In whose interest is it for Greece to exit the Euro? Answer: the USA.
So that's what will happen
Just be patient.
Balls. What is larceny is taking my taxes to subsidize other peoples lifestyle choices. For example, here in the UK we're having "austerity". I use the quotation marks because the cuts so far have been more in the "not increasing spending" column rather than "spending less". One of the things they did actually cut was housing benefit to those who have a house that is bigger than they need. So if you were on housing benefit and you had two kids each with their own bedroom and then the kids move out and get a place of your own, you'd get the benefit cut since you didnt need a bigger house. Those that opposed this dubbed it "The Bedroom Tax" as though the government were charging people money rather than not paying people money that they did not need.
Earlier adopters profit from the rise in value as Bitcoin becomes better understood and in turn demanded by the public at large.
So it's a pyramid scheme.
All adopters benefit from the usefulness of a reliable and widely-accepted decentralized peer-to-peer currency.
Right, so they benefit but not in a way that actually makes them any money, they're basically unpaid marketers who draw in more mug punters.
It's a pyramid scheme.
Satoshi Nakamoto, creator of bitcoin, has never spent a bitcoin
He may be a selfless humanitarian, who cares? I'm sure other early adopters have made money off this scam.
To have a right to do a thing is not at all the same as to be right in doing it
Yes, we are familiar with your 'vacation' house story. Just stop allowing rich people and your politicians to abuse the system. Stop the rest of the skimming at the top, and you'll come out alright. And just demand a raise if your taxes are too damned high, instead of complaining about people in need. The thing is, you are still under the Thatcher/Reagan influence, and it clouds your judgement.
“He’s not deformed, he’s just drunk!”
Greece has run for the last 200 years by borrowing large sums of money and defaulting on the debt, then devaluing the local currency.
The national religion is tax evasion. (One example: Those bits of rusty metal you see sticking out of the roof of almost every greek house? That's because you don't pay property tax on an unfinished building, so the buildings are never quite finished.)
The mistake they made was joining the Euro via an outrageous act of fraud (the EU and banks looked the other way for that one) and expecting to keep going like they'd done in the past. Unlike USA states which may get federal top-up funding, individual EU countries are expected to run their own financial policies and keep the books balanced.
They'd be just as fucked now if they'd decided to use the US$ as their currency. The greek people have been relying on a constant influx of foreign money to allow people to retire at 50 (or younger), whilst young greeks have been leaving in droves (no income tax base to pay those pensions) and those left have been systematically defrauding the taxman whilst politicians enriched themselves too.
Short of unilaterally declaring that pensionable age is now 68 and anyone younger than that has to go back to work, along with reforming the tax system and going hard against political and civil service corruption, anything that greece does to get more money is simply staving off the inevitable.
Economies are not zero sum. Since it is possible to take some resources and make something of greater value out of it, it's possible to increase the total value in the economy.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Austerity, in the form of reducing government spending and increasing taxes, reduces the stimulation of the economy. If the economy is going good, this is an excellent time to do it and cut national debt, but if it isn't doing well an austerity regime will hurt the economy, so there's more of a demand for government services and less income to tax, and so sticking to austerity will put the economy into something of a death spiral. It just plain doesn't work.
Devaluing currency works much better. It lets the economy function naturally. It automatically raises the cost of imports and lowers the cost of exports, helping balance trade. It allows the government to spend money on those who need it. The money will be worth less, but it will be worth something. Nobody gets arbitrarily screwed.
Think of it as the economic version of Daylight Saving Time. Asking individual businesses and government agencies to change their hours in the summer would create chaos, but just shifting the time zone has the same effect fairly smoothly.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
This article disagrees with you that the Scandinavian countries practice austerity. http://www.counterpunch.org/20...
So what? Expecting idiots to agree with me would be like expecting it to rain only on Tuesdays. I see, for example, that the author completely ignores the most important factor in why these countries are able to keep their social programs intact. Namely, their governments don't have extremely high levels of public debt.
The difference between Finland and Greece, for example, is that Finland owes a factor of four less as a fraction of its GDP. The other Scandinavian countries do even better.
Bottom line is that if you want pretty social programs or anything else on the public dollar, you need to control spending and borrowing. That's austerity in a nutshell. I find it bizarre that the countries which best exemplify this maxim are the ones being presented as a demonstration of why austerity supposedly doesn't work.
Uh, no.
The value of Widget A reflects its potential use as a component in Widget B.
The value of something is never anything more than the sum of the value of the raw materials and labor required to make it. The price is another matter.
Voodoo economics like the shit you just spewed are exactly why we're fucked deep into an abyss of debt while doing an inflationary spiral.
http://fee.org/freeman/detail/...
Somehow you've managed to miss the austere in austerity. The trait of great self-denial (especially refraining from worldly pleasures). Not only that, you've manage to ignore the role of income.
Income is a hard problem to control. Spending is an easy problem to control. If spending were the most important part of income, then Greece would have never gotten into trouble in the first place.
And "austerity" is not being used in the meaning above. It's painfully obvious that Greece isn't embracing any sort of self-denial, but is rather being subject to fiscal discipline by external pressure.
Now! It's finally succeeding! Just wait a liiiiitle longer!