Greeks on spending spree .....

Generali

wotsthat wrote: »

The only Euros with any value are those you can spend. A Euro in cash is worth more than one you can't get out of the bank

I assume Greeks are hoarding as much cash as possible and using debit cards to spend.

Carphone Warehouse aren't complaining although they might be if they can't ship the money out of the Greek banking system quick enough.



http://www.theguardian.com/business/2015/jul/16/dixons-carphone-profits-rise-21-per-cent-amid-greek-panic-buying

Surely they could buy something which was a better store of wealth than a big telly.

I don't think you are allowed to use a debit card while the banking system is partially closed.

Here's a graph showing bank notes in circulation and bank deposits in Greece:



NB the Bank of Greece, the Greek printer of Euro notes, is only allowed to print 5 and 10 Euro notes so all those EUR100 notes being used as a store of value have to be imported.

antrobus

Generali wrote: »

I don't think you are allowed to use a debit card while the banking system is partially closed....

The Greeks tend not to use debit cards anyway.

I looked up some data from Eurostat on payment transactions on some other thread recently. The numbers for Greece are shockingly low; it's economy appears very much cash driven.

Generali wrote: »

...NB the Bank of Greece, the Greek printer of Euro notes, is only allowed to print 5 and 10 Euro notes so all those EUR100 notes being used as a store of value have to be imported.

The Bank of Greece printing works at Holargos basically prints what the ECB tells it to print. In the recent past, it has only been €10 notes. I believe that most other denominations are printed in err, Germany.

wotsthat

Generali wrote: »

I don't think you are allowed to use a debit card while the banking system is partially closed.

If that's correct then the Greek public are verging on the mentally ill or the commentary is wrong. No one in their right mind would use Euro notes and buy a big telly to store wealth.

Then again, if you're going to watch the end of the world you may as well watch it in HD.

antrobus

wotsthat wrote: »

If that's correct then the Greek public are verging on the mentally ill or the commentary is wrong. No one in their right mind would use Euro notes and buy a big telly to store wealth.

Then again, if you're going to watch the end of the world you may as well watch it in HD.

The motivation may not necessarily be the desire to store wealth as such.

What do you think would happen in the UK if there was a widespread belief that the the government was about to introduce a 100% tax on TVs? I think the result would be that people would decide to bring forward their purchases of TVs, and rush down the shops to get one quick before the tax was imposed.

Same difference in Greece. They are buying TVs now, because they fear that they will cost twice as much in the event of a Grexit and a devalued drachma.

wotsthat

antrobus wrote: »

Same difference in Greece. They are buying TVs now, because they fear that they will cost twice as much in the event of a Grexit and a devalued drachma.

They're working with flawed logic then. A €500 telly today will still cost €500 tomorrow so it only makes sense if they are spending money they think will be devalued. Cash in hand isn't going to be devalued.

It's only money in the bank that'll buy half a telly in the event of Grexit.

wotsthat

Inside Greece, account holders are limited to daily withdrawals from ATMs capped at €60 (£42) and are prohibited from sending money to accounts abroad, but debit and credit card transactions – such as paying for food in supermarkets or buying petrol – are operating as usual.

A bit from the Guardian - don't know if it's correct and it's a couple of weeks old. Maybe in a cash economy where cash is being hoarded you lose your inhibitions about using debit cards.

http://www.theguardian.com/money/2015/jun/30/greece-capital-controls-confusion-foreign-transactions-credit-cards

I'd be buying rice, pasta, candles and red wine plus a couple of baseball bats.

mwpt

antrobus wrote: »

The motivation may not necessarily be the desire to store wealth as such.

What do you think would happen in the UK if there was a widespread belief that the the government was about to introduce a 100% tax on TVs? I think the result would be that people would decide to bring forward their purchases of TVs, and rush down the shops to get one quick before the tax was imposed.

Same difference in Greece. They are buying TVs now, because they fear that they will cost twice as much in the event of a Grexit and a devalued drachma.

Could be, but of course it's irrational since the TVs will still cost the same in Euros.

antrobus

mwpt wrote: »

Could be, but of course it's irrational since the TVs will still cost the same in Euros.

Irrational, perhaps. It depends on what you think might happen to those pretty pieces of paper with that € symbol on it.

Fear and greed are the twin gods.:)

System

It's all very well having valuable Euros in your account in the bank, but if your bank crashes you will lose them.

antrobus

wotsthat wrote: »

....I'd be buying rice, pasta, candles and red wine plus a couple of baseball bats.

Baseball bats?

What are gun control laws like in Greece? I was always under the impression that Greece was one of those countries where they shoot almost everything that flies and eat it. So it can't be that difficult to get hold of a rifle.