The catastrophic attachment to the Gold Standard in the UK with the illogical worship of the Euro in Greece

By Anastassios Retzios

Those who have lived in the UK as well as those interested in the Labor movement in Europe would have heard of Ramsay McDonald.  He was the person which managed to bring the Labour Party in power in the UK.  However, having been elected with a strong Labor majority in 1929, he cast his party aside, embracing the conservatives in an attempt to impose unpopular policies for the maintenance of the gold standard.  The result was the humiliation and discrediting of the Labour party and movement.  Some conservative historians are now trying to “restore” the image of Ramsay McDonald (rather ineptly in my opinion) but the fact remains that his name is equivalent for the term “turncoat” in the UK. If one ventures to compare the attachment to the Gold Standard in the UK with the illogical worship of the Euro in Greece, one would not be too far off base.

  In both cases, there is a strong conservative appeal and a virtually infantile idea of how money works in the modern world.  I hopefully do not have to mention that the Gold Standard was soon abandoned in the 1930’s (and the same fate will eventually befall the Euro).  So, currencies come and go, but unique turncoats remain as examples for avoidance in the history of nations.  The UK has Ramsay McDonald and now Greece has its own native turncoat, Alexis Tsipras. 

Yesterday, Alexis Tsipras passed fast-track legislation through the Greek parliament.  The 1000-page bill was examined by the Parliament for only 24 hours.  Of course, the Parliament right now is only for rubber-stamping purposes (it may well dissolve, so that we can save some money).  In any case, this legislation now allows the banks to auction people’s residence after default for their market value (not “nominal”, 2007-assigned valued).  Considering the number of homes that will end up being auctioned, there will be great opportunity for those outside Greece to pick up Greek properties for virtually next to nothing.  

Of course, the “nominal” values will now disappear from the market; they will only be retained for tax purposes only!!!  Thus, let me tell you all home owners and strong Euro supporters one thing that you need to take to heart:  You have just lost about 75% of the value of your home, much more than you would have lost upon the change to the drachma!!!  How about them apples????  Enjoy the hosing???  We, the drachma “vultures” outside Greece have now the fantastic opportunity of picking up Greek properties for about 10 cents to the Euro (while a maximum drachma devaluation would have reached, at worse, 50%).

I love to hear how you feel right now.  Because, even if you are not in line to be evicted and you are current in your payments for your home, it would soon be valueless (considering the flood of properties in the market) and, for those who have an ongoing mortgage, you would owe far more than the real market value of your home (an upside-down mortgage).

Oh,…all the joys of the Euro.  Enjoy it in good health….provided you have some change to buy medication.

Best regards,

Anastassios Retzios, PhD

San Ramon, California