{"id":6298,"date":"2012-08-05T21:17:06","date_gmt":"2012-08-05T19:17:06","guid":{"rendered":"http:\/\/boilingfrogs.stanislasjourdan.fr\/?p=932"},"modified":"2019-12-16T00:52:54","modified_gmt":"2019-12-15T23:52:54","slug":"monetary-carnage-greece","status":"publish","type":"post","link":"https:\/\/stanislasjourdan.fr\/en\/2012\/08\/05\/monetary-carnage-greece\/","title":{"rendered":"A monetary carnage in Greece"},"content":{"rendered":"<div id=\"attachment_934\" style=\"width: 310px\" class=\"wp-caption alignleft\"><a href=\"http:\/\/stanislasjourdan.fr\/wp-content\/blogs.dir\/2\/files\/2012\/08\/cops-pigs-murderers.jpeg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-934\" class=\"size-medium wp-image-934\" title=\"cops-pigs-murderers\" src=\"http:\/\/stanislasjourdan.fr\/wp-content\/blogs.dir\/2\/files\/2012\/08\/cops-pigs-murderers-300x200.jpg\" alt=\"\" width=\"300\" height=\"200\"><\/a><p id=\"caption-attachment-934\" class=\"wp-caption-text\">&#8220;cops, pigs, murderers&#8221;<\/p><\/div>\n<p>Just a quick update on this blog in order to highlight one very worrisome (and little discussed) fact about the Greek crisis: the plunge of the money supply.<!--more--><\/p>\n<p>How bad is it? You can have a look on this chart from the central Bank of Greece&#8217;s data:<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/docs.google.com\/spreadsheet\/oimg?key=0AvNBsreQUovAdFg3Y3ZVeU81MlYwc1NMdWpmR2V0OFE&amp;oid=6&amp;zx=i48yo346x9p3\" alt=\"\"><\/p>\n<p>As one can easily see, the money supply has dramatically shrunk since the beggining of the crisis in 2009. Several explanations can be brought here:<\/p>\n<ul>\n<li>The evolution of M1 can be divided into two parts. First, a significant increase in 2009 as <strong>people withdrawed their savings to compensate their purchase power losses<\/strong>. Then the decrease can be particularly attributed to the <a title=\"The squeaky problem of the greek silent bank run\" href=\"http:\/\/boilingfrogs.stanislasjourdan.fr\/2012\/05\/16\/greek-banks-deposit-bankrun\/\">deposit flight<\/a> from the greek banks to the swiss, germans and other &#8216;safer&#8217; foreign banks.<\/li>\n<li>The sharp fall of M2 and M3 since the crisis is obviously attributed to the <strong>absence of any issuance of new&nbsp;credits<\/strong> by the greek banks, as a consequence of the very <strong>bad outlooks<\/strong> of the local economy, not to mention the <strong>structural insolvency of the greek banking system<\/strong>.<\/li>\n<li>The progressive&nbsp;extinction of M3 from 2005 to 2009 (ie. <strong><span style=\"text-decoration: underline;\">before<\/span> the &#8220;greek crisis&#8221;<\/strong>) reveals an <strong>historical lack of credit-driven investment in the domestic economy<\/strong>. With 640 million euros at end-june, we can say that M3 has totally vanished.<\/li>\n<\/ul>\n<h2>Welcome to the moneyless economy<\/h2>\n<p>What these figures mean is very clear:<strong> there is less and less money in the greek economy. <\/strong>No wonder why people are struggling, unemployed and homeless. No wonder either why they are not paying their taxes: they simply can&#8217;t.<\/p>\n<p>Such a shrink of the money supply is a pure carnage for any economy whose money is based on debt. Clearly, how can anyone expect a recovery if&nbsp;companies cannot access to banks fundings? How can anyone expect people to find a job (or create jobs) in a <strong>moneyless economy<\/strong>?<\/p>\n<p>From a monetary point of view, there is absolutely no hope for Greece <strong>unless a strong monetary stimulus is put in place<\/strong>&nbsp;(ie. money injection in the economy). Which of course, is <strong>impossible<\/strong> due to the ECB&#8217;s statuse and most of all, the dictatorship of the Germans&#8217; orthodox views on money&#8230;<\/p>\n<p><strong>In these circumstances, would it be such an absurd idea to consider leaving the eurozone and thus being able to mobilize money printers to <a title=\"How Greece might have a shinier future outside euro\u2019s straitjacket\" href=\"http:\/\/boilingfrogs.info\/2012\/05\/13\/greece-exit-eurozone\/\">reintroduce a real currency for the people in this country?<\/a><\/strong><\/p>\n<p>Again, I refer my readers to these two earlier posts which include proposals and explanations:<\/p>\n<ul>\n<li><a href=\"http:\/\/boilingfrogs.info\/2012\/05\/18\/wrong-arguments-against-greece-exit\/\">Five fallacious arguments against a greek exit<\/a><\/li>\n<li><a href=\"http:\/\/boilingfrogs.info\/2012\/05\/13\/greece-exit-eurozone\/\">How greece might have a shinier future outside of the eurozone<\/a><\/li>\n<\/ul>\n<hr>\n<p>Illustration&nbsp;<a href=\"http:\/\/creativecommons.org\/licenses\/by-sa\/2.0\/\"><img decoding=\"async\" title=\"Paternit\u00e9\" src=\"http:\/\/l.yimg.com\/g\/images\/cc_icon_attribution_small.gif\" alt=\"Paternit\u00e9\" border=\"0\"><img decoding=\"async\" title=\"Partage selon les Conditions Initiales\" src=\"http:\/\/l.yimg.com\/g\/images\/cc_icon_sharealike_small.gif\" alt=\"Partage selon les Conditions Initiales\" border=\"0\"><\/a>&nbsp;<a href=\"http:\/\/www.flickr.com\/photos\/murplejane\/3097926463\/\">how will i ever<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Just a quick update on this blog in order to highlight one very worrisome (and little discussed) fact about the Greek crisis: the plunge of the money supply.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_links_to":"","_links_to_target":""},"categories":[1],"tags":[350,14,341],"class_list":["post-6298","post","type-post","status-publish","format-standard","hentry","category-blog","tag-eurozone-crisis","tag-greece","tag-monetary-policy"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p2om4O-1DA","_links":{"self":[{"href":"https:\/\/stanislasjourdan.fr\/en\/wp-json\/wp\/v2\/posts\/6298","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stanislasjourdan.fr\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stanislasjourdan.fr\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stanislasjourdan.fr\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stanislasjourdan.fr\/en\/wp-json\/wp\/v2\/comments?post=6298"}],"version-history":[{"count":3,"href":"https:\/\/stanislasjourdan.fr\/en\/wp-json\/wp\/v2\/posts\/6298\/revisions"}],"predecessor-version":[{"id":6838,"href":"https:\/\/stanislasjourdan.fr\/en\/wp-json\/wp\/v2\/posts\/6298\/revisions\/6838"}],"wp:attachment":[{"href":"https:\/\/stanislasjourdan.fr\/en\/wp-json\/wp\/v2\/media?parent=6298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stanislasjourdan.fr\/en\/wp-json\/wp\/v2\/categories?post=6298"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stanislasjourdan.fr\/en\/wp-json\/wp\/v2\/tags?post=6298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}