Category Archives: it's the economy

May 14, 2012, 1:07 pm

Are there any drachmas?

As everyone knows, money is a medium of exchange as well as a store of value. Suppose Greece leaves the Euro: are there any drachmas around to serve as a medium of exchange? As of January, apparently, no. (Though rumors say otherwise.) Have some been printed or minted meanwhile? Probably not; it would create a panic.

“I don’t think you could do it much faster than four months,” says Mark Crickett, one of De La Rue’s consultants.

But a government could not commission and take delivery of a new currency without word leaking out and panic spreading.

It is much more likely that a withdrawal for the euro would be announced suddenly, and then there would be an interim period – those four months, say – during which a temporary national currency would be used.

Euro notes previously in circulation in a withdrawing country might be overprinted, or have special stickers added.

(I…

June 30, 2010, 8:29 am

The Same Thing Over and Over Again Expecting Different Results

By David Silbey

I tread warily on Eric’s turf, but this is too much to resist. David Leonhardt lays out, in today’s Times, the gamble which most of the world is about to undertake:

The world’s rich countries are now conducting a dangerous experiment. They are repeating an economic policy out of the 1930s — starting to cut spending and raise taxes before a recovery is assured — and hoping today’s situation is different enough to assure a different outcome.

The risk, of course, is that the same thing will happen that happened in the period 1936-1938. Then, premature fiscal tightening put a bullet in the head of the still shaky recovery, and the world economy collapsed back into depression. There is, now that you mention it, a book about this.

But now Things Are Different. For example, “Back then, however, European governments were raising their spending in the run-up to World War II. This…