In Spanish and Portuguese, ito and inho can be tacked onto the end of any noun as a diminutive. It can be a term of endearment or of belittlement.

Or it can just mean smaller or shorter, much as the Chinese use xiǎo péng yǒu (little friend) to say child.

Un momentito, I’ll be right with you.

Right now the word has been borrowed from the financial history of Latin America and applied directly to Europe. I avoid consecutive texts about the same issue, and Greece appears in today’s chronicle only as an example—this is a story about money.

As usual, history is where we must look for guidance—making mistakes is natural, not learning from them is unacceptable.

Argentina is Latin America’s Greece. It’s not the first or last country to default on debt, and given its size, connection to the land, and natural resources—the name itself is an adjectival noun meaning silver—it’s amazing that things went so wrong.

An article in La Nacion draws seven parallels between Argentina and Greece.

1.Public spending increased rapidly.

2. The overspend was not compensated through income, i.e. taxes, and by definition not by public spending cuts, so the debt burden rocketed.

3. As the shit hit the fan, both countries received external support in the form of financial injections and economic restructuring plans.

4. The Argentinian peg to the dollar, and the Greek ‘peg’ to the Euro, didn’t let either nation turn on the printing press to finance its debt with new money, to make a little more platita. Stark choices: budget cuts, or increased debt.

5. People understood that the debt problem threatened their savings, and ran on the banks—Bloomberg estimates at least eleven billion euros were withdrawn in January 2015, when the extreme-left Syriza came to power.

6. Since neither central bank could act as a lender of last resort without borrowing (Argentina couldn’t print dollars and Greece can’t print euros), in came the little corral, capital controls on the banks.

7. In both countries, political demagogues declared the end of the debt servicing, to popular applause.

Here ends the common ground. In Greece, Tsipras is fighting tooth and nail for the No vote, so that if it wins and the country collapses financially, the decades of hardship that follow will have been legitimized by the Greeks—that alone would be a good reason to vote Yes.

The Greek prime minister is easily recognized in Portugal—he is a stereotype known in Lisbon since the 1974 revolution, which saw the emergence of a host of extreme-left parties, identified with Chinese, Albanians, and Cubans.

These parties share a hate for each other, and for the mainstream party closest to them politically. On the left that would typically be the communist party, generally seen as a traitor to genuine communist ideology. The leaders of these fringe parties are almost without exception presentable and articulate. They are vitriolic in accusation and masterful in public political confrontation. And they are tireless and devoted.

They embody the concerns of the common man, who in turn is smart enough not to vote them into power.

It should be obvious that the Greek referendum tomorrow is a total sham for a couple of reasons, and I’m amazed the Greeks are not rallying against such an example of demagoguery—then again, they invented the word.

It’s shocking because it appears to solve nothing. The vote is clearly split down the middle, and a difference of five percent at best is meaningless. If it is Ne, the Greeks continue to negotiate. Whoopeedoo! If it’s Oxi, the Greeks continue to negotiate. Even if it was 100% yes or no, er… the Greeks would continue to negotiate. Or so it seems.

The question is contemptible in the way it’s phrased. This has been discussed ad nauseam, and it should be enough to oust the government. Nevertheless the Greeks will process the gobbledygook.

If the country votes no, Tsipras legitimizes a return to the Drac. This is the Varoufakis game theory play, i.e. the EU will then fold, the Greek euro endures, we won’t have to take those funny letters off the banknotes, and all will be well—the Germans don’t want to destroy Europe thrice in a century, and after all, we’re talking two percent of Europe’s economy, the equivalent of bailing out Maryland.

But the corralito doesn’t end now. The rich have pulled their cash out of the country, the middle class have stashed it under the mattress. There are far more euros buried in the ground than in the bank vaults.

The head of the Hellenic Chambers of Commerce said yesterday that Greece has only five hundred million in cash reserves—that’s banknotes to you and me. Sounds a lot, but when you divide by a population of eleven million, that’s 45 euros apiece, or about fifty dollars.

The daily ATM limit is sixty euros, but the country is running out of twenty euro notes, so the machines are now regurgitating fifty euros, two twenties and a ten.

Greece pays little tax, so cash is king. Right now there’s a lot more cash circulating outside the system because as soon as it enters the fold, for instance through a bank deposit, it becomes part of the ATM drama—Greek cash depositors must be as scarce as the Yeti.

Nevertheless, the non-cash channels drive public sector wages, hospitals, education, bulk import and export, and oil.

All those systems form the backbone of an economy, and they are all collapsing rapidly. In the wake of abject poverty and desperation comes war.

Of course people can still use ATM cards to shop, because here we’re talking about digital money, not the physical stuff you can stack or stash—if the digital magician says you’re good for it, then all is well.

But the guy who sells fresh fish to my restaurant gets paid in cash. If my customers pay by credit card and I can’t get the money out of the hole in the wall, how do I buy fish? Ultimately the bank notes are the tradable commodity—Philip Coggan defines money as the belief that someone will pay you back.

And the only reason the Greeks hoard euros is because they know Angela Merkel underwrites the currency.

Atmos Fear and The India Road. Quick links for smartphones and tablets.

Atmos Fear and The India Road. Quick links for smartphones and tablets.


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