New 100 Drachmer

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jet
Posts: 355
Joined: Sun Aug 01, 2010 11:06 pm

New 100 Drachmer

Postby jet » Fri Feb 20, 2015 4:08 pm

the new 100 Drachmer

Image


http://en.protothema.gr/the-new-drachma-currency-showcased-on-twitter-see-new-drachmas/

Kilkis
Posts: 8776
Joined: Sat Apr 21, 2007 3:58 pm
Location: Near Chania

Re: New 100 Drachmer

Postby Kilkis » Fri Feb 20, 2015 4:43 pm

I wonder what the Δρ1,000,000,000,000,000,000,000,000 note will look like?

Warwick

norton57
Posts: 43
Joined: Wed Apr 04, 2012 1:10 pm

Re: New 100 Drachmer

Postby norton57 » Fri Feb 20, 2015 10:37 pm

Your post shows no faith whatsoever in Greece/Crete surviving economically beyond the Euro. Let me remind you that Greece has been here for at least 3thousand years and will most certainly be here long after we are gone!

Kilkis
Posts: 8776
Joined: Sat Apr 21, 2007 3:58 pm
Location: Near Chania

Re: New 100 Drachmer

Postby Kilkis » Sat Feb 21, 2015 12:14 am

I make no comment about whether Greece/Crete would survive. What would your prediction be for the value of the new Drachma if Greece were to exit the Euro, Norton57? Say 1 year from now and 5 years from now. If Greece reverts to the Drachma at 1 new Drachma = 1 Euro do you really think it will stay at that exchange rate? The fundamental facts are:

1 Everybody needs energy to survive. Greece imports nearly all its energy.
2 Everybody needs food to survive. Greece imports a huge percentage of its food.
3 Greece exports bugger all except tourism.

How is it going to pay for these items? What would happen is that the people who have had their incomes cut by 40 % would still have their incomes cut by 40 % but now they will face inflation of 100 % or more as well. Do you think that is going to make them better off?

Warwick

Retired in Crete

Re: New 100 Drachmer

Postby Retired in Crete » Sat Feb 21, 2015 1:53 am

Kilkis wrote: The fundamental facts are:
1 Everybody needs energy to survive. Greece imports nearly all its energy.

Actually refined petroleum is Greece's biggest export worth 11.8 Billion US Dollars!
Kilkis wrote: 2 Everybody needs food to survive. Greece imports a huge percentage of its food.

It also exports nearly half a billion dollars worth of fruit and nuts and Over half a billion dollars worth of fresh fish
Kilkis wrote: 3 Greece exports bugger all except tourism.

In addition to refined petroleum, fruit, nuts & fish Greece also exports (in decending order):
A billion dollars worth of medicaments
Over half a billion dollars worth of Aluminium plating.
Over half a billion dollars worth of raw cotton.
Just under half a billion dollars worth of copper pipes
Just under half a billion dollars worth of olive oil (Number 7 in value of exports)
411 million dollars worth of insulated wire.
In addition:
Greece is the EU’s largest producer of bauxite, magnesium, nickel, and perlite. It also mines lignite, bentonite, Chromite and zinc.
Greece is one of the worlds largest exporters of marble.
It has the largest merchant navy in the world.
If these are not hi-tec enough Greece also manufactures the fuselage for the Dessault fighter plane

Me thinks you belittle our adopted homeland somewhat!

John

Ref: http://atlas.media.mit.edu/profile/country/grc/

norton57
Posts: 43
Joined: Wed Apr 04, 2012 1:10 pm

Re: New 100 Drachmer

Postby norton57 » Sat Feb 21, 2015 8:24 am

Thanks to John for those facts, helps to balance the gloom and pessimism of the earlier post. Greece needs friends and hope for the future at the present time not cheap laughs !

celt0
Posts: 52
Joined: Mon Oct 11, 2010 9:41 am
Location: West of Chania

Re: New 100 Drachmer

Postby celt0 » Sat Feb 21, 2015 11:27 am

The link Retired In Crete referred to shows that Greece exports amount to $33.8bn but imports are almost double at $60.5bn. A massive imbalance.

Should the worst happen and Greece leaves the Euro and reverts back to the Drachma, most of the so called 'experts' say that currency devaluation would inevitably follow. This would devalue their exports in real terms whilst increasing the cost of their imports - compounding the imbalance. It would, however, make it a cheap holiday destination and with the tourist industry already well developed, they could capitalise on that. But would it be enough to balance the books? I think not.
Whatdoesthebigbaratthebottomofthekeyboarddo?

Kilkis
Posts: 8776
Joined: Sat Apr 21, 2007 3:58 pm
Location: Near Chania

Re: New 100 Drachmer

Postby Kilkis » Sat Feb 21, 2015 11:50 am

All countries both import and export, John. By simply looking at export figures you totally distort the picture. It is the NET figure that is important. For example the following quote from Wikipedia:

"Greece has 10 million barrels of proved oil reserves as of 1 January 2011.[8] Hellenic Petroleum is the country's largest oil company, followed by Motor Oil Hellas. Greece's oil production stands at 7,946 barrels per day (bbl/d),[8] ranked 90th, while it exports 181,600 bbl/d (57th)[8] and imports 496,600 bbl/d (25th)"

Although this is a little out of date I don't believe the situation has changed. Clearly Greece is a NET importer of oil. When you add in natural gas it is a massive NET importer of energy. I suspect the situation might have changed because there has been a trend to move away from lignite burning to produce electricity because of its pollution impact.

Overall Greece constantly runs a trade deficit with the rest of the world. See for example http://www.tradingeconomics.com/greece/balance-of-trade which shows that for 2014 the deficit was between €1 billion and €2 billion per month and a total of almost €21 billion for the year. That is about 10 % of GDP. You don't have to be a genius to work out what that will do to inflation with a falling Drachma.

If Greece leaves the Euro and uses the Drachma, in the short term at least, you will simply take the present depressed economy and add massive inflation on top. Simply dropping austerity and adopting the Drachma will not reverse the effects that austerity has already caused. Eventually the increased competitiveness should allow the economy to grow and ordinary people might start to benefit. How long that will take I have no idea but I am certain it will not be fast. Perhaps five years? If Greece had defaulted on its debt at the start of the crisis and withdrawn from the Euro then, that would have initially caused a depression similar to that caused by austerity but the increased competitiveness would have already started to have an effect and Greece would at least be starting to recover. Doing it now would be a disaster.

Warwick


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