Since Americans are headed toward the same fate, a collapsing country like Greece can provide a hint of what’s to come.
The Greeks want to buy stuff. They are scrambling to do so.
The reason is rather simple: they trust the right of possession more than they trust the banks. As the New York Times headline put it, “Greeks Spend in Droves, Afraid of Losing Savings to a Bailout.”
Business has been so brisk in the giant Kotsovolos appliance and electronics store in this upper-middle-class suburb of Athens that you might think a sale was on.
But, no. It is panic buying, those who work here say. Increasingly concerned that greater economic trouble lies ahead of them, and limited in how much cash they can take out of banks, Greeks have been using their debit cards to buy ovens, refrigerators, dishwashers — anything tangible that can hold its value in troubled times.
“We have sold so much,” said Despina Drisi, who has worked in the store for 12 years. “We even sold display models. People have been pulling at my sleeves. We’re spacing things out now to cover the holes on the shelves.”
There seem to be twin concerns. One is what is going to happen to the money and the other is what is going to happen to any money held in a bank. After Cyprus, the Greeks have little basis for confidence that money held at the bank won’t be taken by the bank to bail it out. Holding Euros might also be a problem though if Greece requires transactions to be made in a new drachma and uses a fictional fixed exchange rate for euros. The government would essentially be stealing money by getting the Euros for the much more questionable drachmas.
So the other alternative is to buy stuff. Lots and lots of stuff.
Electronic equipment is not going to store much value very long. The best thing to buy would be liquor assuming one had a place to store it. As a uniform liquid it would be highly divisible with each part maintaining its proper ratio of value to the whole.
In prisons, cigarettes become currency and, when your country collapses, you learn that your state is a prison and you have to make up new currencies based on what’s available.
A Greek jeweler, George Papalexis, said a customer had approached him on Wednesday wanting to buy a million euros’ — about $1.1 million — worth of merchandise. But Mr. Papalexis, the chief operating officer of Zolotas, said he had refused because he was more comfortable holding on to the jewels than having money in Greek banks.
“I can’t believe that there I was, turning away a million-dollar offer,” he said. “But I had to turn down the deal. It’s a measure of the risk we face.”
There are many more descriptions of how people are fighting panic, getting all the cash they can outside of banks, and making sure they have as little in their bank deposits as possible.
It is a time of terror for the average Greek citizens. Already businesses have been ended due to the currency restrictions and people go scouring for ATM machines that are not already out of cash.
And what do our leaders do? They assure us of how great our economy is doing. They think when they “prevent panic” they are keeping the U.S. from becoming a “collapsing country.” But that is exactly how the Greeks walked into this. It is how we will do it too.