Greece, welcome to the absurd!
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The miles/points world is boring me to piece lately. I have not seen it less exciting in a long time!
Just a few thoughts about Greece. Sorry I just don’t have time to write more.
Greeks voted NO in huge numbers in the Sunday July 5 referendum. Never mind the referendum wording was about a proposal that was already withdrawn. I wanted YES to send a strong message to the Europeans that Greece REALLY wants to stay with them. Instead, in typical Greek suicidal pseudo rebel fashion, voters decided to send a strong NO. And now what? Nobody told them what this will mean for their life afterwards instead of blatant lies that it will bring a deal within 48 hours lol!
So much crap written about Greece lately, it’s all over the news. It’s starting to get comical. Most don’t know what they are talking about.
Please read this rant about Greece I wrote on December 2013.
To sum up the vote:
The country needs reforms to shed the state apparatus that is drowning everything. Instead, Greeks voted for a government that does not believe in so needed reforms. Their idea of reforms is hiring all they can IN the government! In other words, free money for all. Sorry dudes, the free ride is over. They are on to you now, no more pretending reforms in exchange for more loans to keep your crap going.
The money in the banks is running out. Amazing they voted NO when they are lining up in the bank ATM lines to withdraw 60 euros per day from their accounts. The game was over when the inevitable decision was made to close the banks and instill capital controls. Euros will not last for a few more days. It is now all up to Draghi of the European Central Bank…
I am a very optimistic person by nature. But I don’t see how things will improve for the people of Greece. They must change but the hold of the state apparatus is so phucking strong it continues to destroy everything! The private businesses have been decimated and so many more will close and more will lose their jobs. But the government workers will keep their jobs. Heck, the few hundred that the previous Conservative government was finally pressured to fire were ALL hired back by this Syriza government. Yeah, WTF non stop with this freak show!
To give you an idea what we are dealing with, here is the President of the Parliament. An amazingly narcissistic combative megalomaniac embarrassment who made a movie (with state money) about their struggle to bring social justice to Europe and then wasted more time to investigate how previous administrations signed the “shameful” agreements for the loans. Sad thing is if they had made a deal right away it would have to bring in about 1 billion euros in measures. The agreement (withdrawn) of June 25 was for 8 billion euros. Every day since the banks closed the country loses 0.7 billion…so the next deal would have to be 16 billions in harsh measures to try to get everything back in control. And these guys promised so much crap and lied so blatantly and….idiots believed and voted for them. Like I said, this is an absurd country where delusion reigns!
Folks, these Syriza dudes are a bunch of dangerous buffoons who could not run a kiosk, let alone a whole country so much in need of good governance. It’s a selection of a bunch of extreme leftists with a few mild European minded leftists thrown in. What is even more sad, it is the other political parties have been so discredited and after the NO vote Syriza is pretty much the only game in town….God help us all!
Here is a Syriza member who represents, please sit down, the Trotskyite Fourth International. WTF non-stop, all together now!
Like I said, Greece is absurd, a country of the extremes. There is a saying we have “Greece never dies” along with “This country is impossible to save”. There was one very positive development coming out of the NO vote. The Finance Minister Yanis Varufakis resigned and I am beyond ecstatic. I think this guy will go down in history as the one with the worst record ever of a Finance minister in the world, sorry the whole galaxy I mean. He basically received an economy that had stopped sinking, a small surplus and even a good growth indicator and proceeded to destroy annihilate it with a moronic negotiating strategy and continuous tragic missteps to the point of closing the banks and capital controls and running out of money after raiding any stash of money he can find. Oh, also missed a payment to the IMF which had not happened since last time…which was Zimbabwe! And also proceeded to piss of EVERYONE he negotiated with his delusional and moronic beliefs. How can you call your colleagues terrorists is beyond me! I get way too angry talking about this guy!
Please stop talking about the debt, the debt is NOT the issue! The issue is getting the budget deficits under control. Just when we all thought the bottom had been reached and we could only go up after 5 years of sacrifices…Syriza forced an election and it has been downhill ever since. The damage is so BIG that the game is over. Even if there is a deal (which I doubt) it will bring huge pain as the businesses have been decimated with the banks closed. And the game is called when the government can no longer pay pension and government staff salaries. I mean, it has stopped paying EVERYTHING else so it can continue to pay pensions and salaries. And money is running out….Greece is a failed state inside Europe and Greeks always blamed others instead of taking responsibility and truly get their act together and build something solid instead of…destroying. Oh, they also like to think of themselves as the ones fighting the good fight and teaching democracy and sticking it to the man…whatever. Anyway you look at it, it is tragic as many people are suffering and will suffer even more now.
Solutions after the free money stopped were bad, very bad, worse and catastrophic. We are down to the worse and catastrophic now…Tic, tac. Never underestimate the power of the average Greek voter to vote wrong and be proud for it! At the end, societies reflect the governments they elect. Hey, Greeks invented tragedy too!
Remember the Greek economy has always been a basket case and it only represents 2% of the European Union economy. In other words, Greece gets way too much play in the media than it deserves! The sad truth is the country never really belonged in Europe and continues to shoot itself in the foot to remain there…
This is what drachmas look like.
Pray for Greece. Things may turn very ugly next. And hey, “Greece never dies”. Not sure about the Greeks…
TBB
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2 questions G.
– is it time to buy a nice cliff house with a great sunset view on Santorini for 50K Euros?
– why isn’t Euro crashing today?
The bureaucratic crap you need to go through to own real estate in Greece is insane. And then you have to deal with the utilities and taxing authorities. Stay away, use points or airbnb 🙂
I think the markets have the Greece fiasco factored in, I mean, it has been going on for so long now…
Second! Thanks for the Greek post.
You are welcome.
No doubt well thought-out and completely compliant to one school of macroeconomics theory or another. But this is a travel blog, and I make it 8 to 5 a return to the Drachma will likely make Greece the world’s best travel bargain for the next couple years.
Mike, readers asked me to write about Greece so I did. The country survives on tourism so I think it is very relevant for a travel blog 🙂
This summer things felt very cheap for me! I think they will get cheaper!
Martin Armstrong disagrees with you on pretty much everything.
http://www.armstrongeconomics.com/archives/34502
He is not a man whose views should be dismissed. He has been writing about Greece for years and has had his predictions on record for at least decades.
Bob,
I respect your opinion and fully disagree with it! I suggest you don’t listen to this Martin Armstrong anymore because believing what he believes about Varufakis is beyond ludicrous imho.
No disrespect was intended. My personal knowledge of Greece is pretty much saying “OPA!” at Athena Greek Restaurant in Greektown. I posted only to show an opposing view.
To Anonymous: No problem at all. Sad thing is this Varufakis clown is considered a hero by the ones who voted…No. There are videos of people hugging him “you will save us”. WTF to infinity!
TBB – my boy Martin has written extensively on this over the last few days, it’s well worth your time to read all of it!
A free floating Drachma will do wonders to impose fiscal discipline. Let the market price GGBs without the ECB bid and there may be some real motivation for change.
Just got back from my soccer game and my head received a shot in such force I think I am still seeing stars…Which Martin do you mean?
Bottom line is, the guys in charge couldn’t manage a kiosk, let alone transition to a different currency…it will have to be done for them instead 🙂
To understand a bit better what we are dealing with and to not think I am a free market extremist…you should read this, it is RIGHT (pun intended) ON:
http://www.telegraph.co.uk/news/worldnews/europe/greece/11720641/Greece-has-been-taken-hostage-by-a-government-disguising-its-incompetence-as-heroism.html
Thanks for posting this. I haven’t followed all the intricacies of the situation but I have read some about it; I am glad to read your explanation of how you see it. Much appreciated as I try to sort out what I think!
Yeah, there is so much media coverage is insane. While the Chinese are having a mega freak out bubble bursting and wondering “omg, I borrowed to buy more stocks and I am so much down?”…
Hey Buzz-
I didn’t know who Martin Armstring was so I went to Wikipedia:
https://en.wikipedia.org/wiki/Martin_A._Armstrong
How was he able to write about Greece while he was in prison? Maybe longhand, though the troll would really be on him for lousy page views on the blog.
Or is this the same guy? It’s all Greek to me.
Buzz – came back just to read about this, so sorry for all the beautiful people there…the government seems content putting out a fire with lighter fluid.
According to same Wikipedia page cited by Sam, “Armstrong is the developer of the Economic Confidence Model based on business cycles and pi.[3] He is known for claiming to have predicted the crash of 1987 to the very day.[5] Using his theory that boom-bust cycles occur once every 3,141 days (the number pi multiplied by 1000), Armstrong claimed in 1999 to have predicted the Nikkei’s collapse in 1989 and Russia’s financial collapse in 1998.”
Hey, Miss Cleo has nothing on this guy!
So many experts everywhere 🙂
But what gets me is them writing about Greece and trying to push their own agenda. Like Krugman, Sachs, etc.
You can’t understand Greece unless you have lived there…many of these people just think differently. Sometimes i think they live in a different planet!
Buzz-
Thanks for the analysis. It helps me understand more of the story as I’m currently deciding whether or not to scrap 5 days in the Greek Islands as part of a larger Europe trip later this month. I accept that there will be some risks that will accompany a visit to Greece right now but my main concern is having our flights disrupted and screw up our award tickets home. If we ultimately decide to go I think we’ll just have to accept the fact that we’re rolling the dice, and things could get messy.
Another thought that I did have, if everyone is encouraging visitors to bring wads of cash, does that not make you a target for pick pockets, muggings, etc?
Things will become clearer within a week.
My concern is a health event…you do NOT want to enter a Greek hospital! They are out of so many supplies, they are unpaid and tired, the facilities are not being cleaned…it is just awful!(of course varies by location).
I feat thing may turn really ugly.
On your last question, the answer is Yes. But no reports yet of mugging tourists. Greeks treat tourists well as they are a lifeline for so many.
By the way, guess who has congratulated this govt for the win: Venezuela’s Maduro, the Argentinian President, of course Putin, and the Castro brothers. I think the North Korean wanted to call but their lines are down lol.
Glad you’re back, and thanks for the Greece write-up.
I agree with you on almost everything about Greece and their current, self inflicted wounds.
BUT, the EU/ECB know no bounds in kicking problems down the road, with no real solution to the main issues. It would not surprise me in the least if what happened next was an gradual unfreezing of emergency aid, followed by a brief extension of ECB/IMF loans. This brief extension would just continue on and on (sort of like a rolling mechanical delay on United), followed by a tiny amount of debt forgiveness, tiny slashes in spending by Greece, etc.
In a year or two you wake up and realize nothing has materially changed. But, Greece is still using the EURO, the macroeconomic conditions are different, and you have another cast of characters to re-hash the whole problem.
I don’t think this is the right way to handle the situation, but EU problems always seem to linger. Just my 2 cents.
Yeah, no doubt EU/ECB are experts in can kicking! They make the US politicians look like amateurs in this sport haha. But I think they are dealing with very fanatic ideological dudes who deep down want a break so they can build their utopian society and show the world how they can do social justice, revolution blah blah blah. I am not joking. My friend contacted me in Facebook, the factory he works in as a supervisor closed today because they can’t get parts for some of their big machines….The real economy is being destroyed….It is a phucking Greek tragedy unfolding….and of course they will blame the Germans the ECB and the criminal IMF (which REALLY is bucking the trend and wants the Euros to provide some debt relief now)…
Not sure if I am making sense….I get angry with what is going on and I am not even leaving there…but my mom will run of cash soon…and her medicine….
Thanks for the illuminating post.
Now I would like to hear more about how this might affect the cost of being a tourist.
When you say it felt cheap to you, are you talking about hotels, restaurants, etc. ? (Or were you mostly using points for accommodations?)
OK very interested in hearing more !
🙂
I don’t pay for hotels, I use points, come on!
I used Airbnb for the first time, only 36 euros per night in late June. This is a very low price which was probably double several years ago.
Yes, the restaurant prices have come down and with the favorable USD exchange rate eating out is affordable to very affordable. I treated a friend’s family and us, 10 of us, in a decent restaurant with the local grilling dishes and salads for 100 euros. There is so much competition now that they even give water bottles with coffees to go, sometimes as low as 1 euro!
For two weeks I had a Mercedes from Avis for $650. This was my highest purchase while in Greece.OK, gas is not cheap of course, it never was. Other than that things are just way more affordable than they were!
Thanks George. I really appreciate a perspective from someone who has family in the country and has recently been on the ground there.
I speak my mind 🙂
Pre-Euro Greece was a middle income country with lousy fiscal discipline, and paid 9-12% on their 10 year bond. (Basically junk rates) Once the Euro came banks and creditors were letting them borrow at the same rates as France and Germany. (3-4%) Post-Euro the rates will be junk again. Until the Greeks stop resisting tax compliance like they resisted the Ottomans, those rates will stay.
Yes, historically the government has been very little but a patronage/clientalisitic machine, but it was not this government that lied it’s way into the Euro in the first place Sorry, a good amount of the blame lies some very deep seated cultural norms that accept tax evasion, patronage, and lousy governance.
Jettisoning the Euro and going to a New Drachma will be extremely painful, but when a patient is bleeding to death sometimes you have to staunch the wound and hope that they will recover from the trauma.
Yeah, like I said there are many reasons that got Greece to this place…
Current govt was indeed handed a painful ultimatum today, the jig is up it appears.
For those who want more analysis, here’s Stratfor’s take on it:
https://www.stratfor.com/weekly/greek-vote-and-eu-miscalculation?utm_source=freelist-f&utm_medium=email&utm_term=Gweekly&utm_campaign=20150707&utm_content=readmoretext&mc_cid=fe84a80645&mc_eid=64a580e60c
I like Stratfor in general. But in regards to Greece they are lacking…a lot! They need to hire a few analysts on the ground. They are as relevant about Greece as…Paul Krugman 🙂