People Living in Greece are Doing it Right

The Greek economy is in the toilet and things aren’t looking to improve anytime soon. Fortunately the people living there are doing the right thing:

Bankers said up to 800 million euros ($1 billion) were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods, as fears of returning to the drachma were fanned by rumors that a radical leftist leader may win the election.

This is the most proper response. Get your fiat currency away from those thieving bankers and convert it into tangible goods. A fiat note has no actual value because it has no actual use. Commodities on the other hand are useful and thus have actual value. As people living in the Weimar Republic learned, times of hyperinflation require one to resort to barter. Nobody wants to accept a wheelbarrow full of fiat currency because that currency is constantly becoming less valuable. Sure, they may be able to buy a loaf of bread with it today, but by tomorrow they won’t be able to buy a slice of bread with it. Instead they will ask for the thing they actually want, bread.

On the other hand canned goods will give you purchasing power. Even if you don’t want to eat canned beans somebody else will, and you can ask for something in exchange. The beans will last for ages and, if nothing else, you can eat them. In economic terms the can of beans is said to have intrinsic value, that is to say the value of an item is contained within itself. This is why gold backed currencies have worked, gold has actual uses and therefore is has intrinsic value.

It’s good to see the people of Greece waking up to the reality that’s been inflicted upon them. I hope the people of my country are as smart when the dollar starts to topple down.