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Originally Posted by Beingist  Thanks for this elaboration, Snerp. I couldn't help but chuckle at the idea of Greece using possible default as a threat against Germany and France as "entertainment value." Classic.
Otherwise, I can't help but be curious about how Greece's adoption of the Euro is called a "hard money policy." I presume it's called such, because Greece has no means to inflate or deflate it, but I find it ironic, in that the Euro, which is not a metals-based currency, can hardly be called "hard money." |
In this case by "hard money" I mean simply a money supply that is not manipulated with the economic cycle. Historically that has usually meant metals-based money, but in this case it's the political situation (namely, Greece's small size and lack of control relative to the rest of the Eurozone) that is making the money supply "hard". Which is why I mentioned that they're headed for a 19th century style bank panic (one of the two major weaknesses of metallic money systems) despite being on a fiat currency. It is indeed ironic, but it's also an interesting case study because it separates issues of money supply from issues of money composition. Such examples are rare in history.