Greece would be better off under the drachma

J. Keith Johnson Senior Writer, The Gold Informant
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Would a “Grexit” — a Greek exit from the euro — benefit all parties involved? There is much discussion over this, and just as much disagreement. But, perhaps the fact that it’s being discussed openly now is a sign of things to come. Just a few weeks ago, any mention of Greece possibly leaving the euro was met with utter denial.

Though we tend to think of these things on a European level, right now Greece is the country bleeding to death. It’s not that Greece’s debt is worse than other countries’ debts. It’s that Greece’s standard of living is deteriorating to the point that people there are losing their will to live. When this happens, people either fall into despair or fight. And that’s exactly what we’re seeing in Greece today.

Suicides are on the rise in Greece, especially in the urban centers. Recently a son joined his ailing mother, jumping off the sixth floor of a building, as the pressures of simply living became too much to bear. Last September a 55-year-old man, worn out by incessant debt and no end in sight, lit himself on fire in Thessaloniki.

Before the euro, Greece had the drachma. It wasn’t a strong currency. But its weakness made Greece a very attractive vacation destination. And the Greek people played it up, opening restaurants, hotels, tourism services and other businesses that fed off the boons of tourism.

When Greece joined the euro circus, it was promised greater wealth and prosperity. At first, it seemed their dreams were coming true. The Greeks were able to charge higher prices, just like every other country that’s joined the euro.
Before long, they were enjoying the luxuries that greater affluence can bring. But soon they started enjoying more luxuries than their pockets could afford. Rather than tightening their purse strings, they did what Westerners have become accustomed to doing: they borrowed.

As prices increased in Greece, tourism began to decrease. But by that point the Greeks had become accustomed to certain standards, and those standards had to be maintained. So they borrowed more. However, to pay off debt, they needed to charge more. But the higher prices were reducing the number of customers. I recently heard of one man who said he was met on the street by restaurant owners vying for his patronage. So forceful were their efforts that he was buffeted and a fight broke out between two of the owners.

It’s true that the euro would probably be better off without Greece. At this point Greece is in a sort of debtors’ prison, needing to borrow more each time in order to pay off the previous debt, plus expenses. The ECB simply prints the euros, continuing to offer austerity like a pusher offers morphine to an addict. Just one more and we’ll be fine … until next time.

This should be about people rather than politics. The people of Greece are suffering under the thumb of European Central Bankers. They need out. If the pressure isn’t relieved soon, the violence and self-destruction will get worse. This isn’t about the euro. It’s not about Angela Merkel. It’s not about Brussels. Ultimately, it’s not about economics. This is about real people with real lives and real families, some of them barely living hand to mouth, striving to feed children and maintain dignity. The cronies continue driving their luxury cars, flying back and forth and pushing buttons, crunching numbers and jockeying for position while the real target of their efforts should be to ease the suffering of the people of Greece.

If Greece can gather the muster to leave the euro, they’ll come out the real winners. It will take time. It will take hard work. But, in a twist of irony, the economy of Greece will most likely strengthen under the weaker drachma.

J. Keith Johnson’s Austrian and libertarian perspectives on current socioeconomic and geopolitical affairs are fueled by his insatiable desire to both discover and share the truth. A Goldco Direct affiliate, you’ll find his commentary on The Gold Informant website, as well as various Internet financial and news sites.