It’s Friday afternoon and I have been mulling over this post
all day. Okay, that’s an exaggeration. But I have been mulling for the last
five hours, since I woke up. I still don’t have any clue what to write, or what
to write about. I'll just start and see where it goes...
Thinking it over and watching the news, reading about it, Greece
will do what Greece is going to do tomorrow. The EU will then have to decide
for itself what to do about whatever Greece does. Either way a whole lot of
people are going to see a whole lot of their personal wealth disappear in a
cloud of dust.
Will Portugal, Spain and Italy, all equally iffy risks,
follow Greece’s lead? Either way, one way or the other, they’re going to have a
day of reckoning, too. It’s inevitable.
Barron’s has a good article on this mess:
This all means that the bond market will suffer. Along with
people who have invested in them through their retirement savings accounts. The
pain will be widespread and, if the others go – the rest of the PIGS – as expected,
it’ll happen again. When is the only question awaiting an answer.
That’s a primary reason I don’t invest in my company’s 401k.
I don’t trust governments and I don't trust the investment markets. It's a Ponzi scheme and a shell game. Which means that I’m strictly a sideline observer
in all of this kerfuffle.
Yesterday, I was looking at economic statistics on Iceland because of a discussion I
was in. I had gotten into something of a debate about Iceland’s economy since
they walked away from the EU and re-established their own currency.
Along the way I had a pretty hard comeuppance moment. It was because I,
looking at what I was seeing from the outside, was shocked by the state of
their economy.
Iceland has a median annual salary of 3.5 million after taxes? That's the average annual income? It costs an average
of 260 Krona for a loaf of bread? Horrifying!
Then, after I was virtually slapped upside the head, I
stopped and thought about it. Those are average
prices. That is what the average
person earns and pays. So the fish swimming in that pool, sharing that water,
are all seeing the same thing. So it’s okay. It really isn’t that bad,
particularly since the majority of Icelanders are working. They have relatively
low unemployment and their quality of life is pretty good.
Following through, rubbing salt into the wound of my
ignorance and arrogance, I ran some numbers and discovered that, despite its
outward appearance, it really isn’t that bad.
If you take the Icelandic median annual after tax income of
3,543,935.16 Kr and divide that to the monthly after-tax income you arrive at
295,327.93 Kr. If you convert that to Euros, it results in a monthly after tax
income of €2,007.87. That’s not too bad.
Maybe that’s the answer for Greece. Swallow the bitter pill.
Walk away from dependency on the rest of Europe. Hit rock bottom and start to
climb up again. Maybe study Iceland and what they’ve done to get things back on
track.
Greece does have a problem that Iceland doesn't. It's an aging society but, with some serious effort, they still might be able to turn things around and, who knows, maybe they could become a magnet for younger people. Maybe after a few years, with the right restructuring, young people who are finding it hard to make ends meet in France or Spain or Italy might be attracted to a thriving economy and a chance to earn a decent living.
Who knows but it remains to be seen. But wouldn't that be a kick in the head if Greece, as it did several thousand years ago, became the model for future civilization, future economies?
In any case, no matter what happens with Greece and the EU tomorrow and into the future, I certainly learned a salutary lesson: Just because you
think you know something, don’t assume you do. Check your facts, be careful to make sure they’re
accurate and then talk about it. Otherwise the maxim ‘better to remain silent
and be thought a fool, than to speak and remove all doubt’ is likely to come
into play. As it did for me, yesterday.
Oh well. Humility is good. It builds character. So I’ve had
some character building.
Oh – and look at that. This just about wrote itself.
Have a lovely (non-humbling) day!
Best~
Philippa
Follow me on Twitter: https://twitter.com/PhilippaStories
No comments:
Post a Comment