Real Clear Markets
May 21, 2012
The tragedy that is Greek democracy has entered its final act. Nothing can save the Greek government. Nothing can save the Greek banks. Nothing can keep Greece on the euro. But the Greek people still have the power to save themselves.
Last summer, I penned a column in Forbes titled "Give Greece What It Deserves: Communism." It generated an outpouring of bile from offended Greeks, many of whom blamed everyone but themselves for their troubles. The most recent Greek elections ignited another round of hateful accusations, along with the question, "What would you do to solve the problem?" Here is my answer.
1) Do not look to the government for solutions. As a certain wise president once said, government is the problem. Your best hope is for it to remain hobbled, impotent, and divided. Your worst nightmares will come true if angry Greek voters hand power to extremists of either the left or right.
2) Get your money out of Greek banks NOW. Don't be the last fool whose euro life savings are decimated as they are forcibly converted into drachmas.
3) Stick with the euro after the government brings back the drachma. Let them pay civil servants with drachmas. Let them pay government pensions with drachmas. Let government owned companies pay employees with drachmas. Let them collect taxes in drachmas, and pay bondholders the same way. But as much as possible, run your lives and businesses with euros, dollars, or sterling, which will continue to circulate. When it comes time to pay your taxes, any genuine reserve currency will buy drachmas by the bushel basket.
More
No comments:
Post a Comment