# Greek default seems to be inevitable...what's the fallout? **URL:** \ **Category:** Great Debates\ **Created:** [June 29, 2015, 8:24pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811 "2015-06-29T20:24:18Z")\ **Posts on this page:** 20\ **Page:** 7
**Author:** ![up\_the\_junction](https://avatars.discourse-cdn.com/v4/letter/u/f1d935/32.png) [@up\_the\_junction](https://boards.straightdope.com/u/up_the_junction)\ **Post date:** [July 4, 2015, 12:38pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/121 "2015-07-04T12:38:22Z")
> [@Uzi](#): > > So, what you are saying is that the Greeks aren’t responsible enough to manage their own affairs? In that case, it would make sense that Greece ceases to exist and becomes a territory of whatever country is willing to buy up the most debt. Unfortunate cognitive error after the first four words. ---
**Author:** ![up\_the\_junction](https://avatars.discourse-cdn.com/v4/letter/u/f1d935/32.png) [@up\_the\_junction](https://boards.straightdope.com/u/up_the_junction)\ **Post date:** [July 4, 2015, 12:41pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/122 "2015-07-04T12:41:38Z")
Reange of views on yes or no from a range of excellent Nobel-winning commentators. Example: > [@](#): > > Paul Krugman - NO > Nobel prize-winning US economist > > “I would vote no, for two reasons,” Krugman wrote in the New York Times. > > Firstly, thinks Krugman, the troika of international lenders – the entity consisting of the European commission, the European Central Bank and the International Monetary Fund – is effectively demanding that the policy regime of the past five years be continued indefinitely: “Where is the hope in that?” > > Secondly, the political implications of a yes vote would be “deeply troubling”, he says. > > ``` > The troika clearly did a reverse Corleone – they made Tsipras an offer he can’t accept, and presumably did this knowingly. So the ultimatum was, in effect, a move to replace the Greek government. And even if you don’t like Syriza, that has to be disturbing for anyone who believes in European ideals. > > ``` > **[Greek referendum: how would top economists vote?](https://www.theguardian.com/world/2015/jul/03/greek-referendum-what-the-experts-say)** > > The Greek government is urging a no vote in Sunday’s bailout referendum. Eurozone leaders say vote yes ---
**Author:** ![Uzi](https://avatars.discourse-cdn.com/v4/letter/u/91b2a8/32.png) [@Uzi](https://boards.straightdope.com/u/Uzi)\ **Post date:** [July 4, 2015, 2:29pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/123 "2015-07-04T14:29:26Z")
> [@up\_the\_junction](#): > > Unfortunate cognitive error after the first four words. Your the one who said it was the lenders taking advantage of the Greek people by lending their duly elected leaders money. I’m sure it was done at gunpoint as well. I do agree that when the debt reached a certain level anyone giving more money to Greece deserves everything they are going to lose by having done so. ---
**Author:** ![up\_the\_junction](https://avatars.discourse-cdn.com/v4/letter/u/f1d935/32.png) [@up\_the\_junction](https://boards.straightdope.com/u/up_the_junction)\ **Post date:** [July 4, 2015, 3:59pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/124 "2015-07-04T15:59:16Z")
They do but, of course, the aim was to keep Greece in the euro game even at an unusually high risk to capital - because doing so benefits the economies of the north, Germany way above all others. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [July 4, 2015, 4:31pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/125 "2015-07-04T16:31:21Z")
> [@Shodan](#): > > I have no confidence in my ability to explain economics to you. Thus I will only point out that the suggestion was to inflate the currency to eliminate debt, and that the US national debt more than doubled during the period you mention. So increasing the money supply did not do for the US what you think it would do for Greece. > It is indeed, and that’s why your previous example is other than illustrative. > Inflation reduces purchasing power. Do you at least understand that? And inflating the currency does not increase the amount of stuff for sale. At least tell us that you understand _that._ > Apparently not. > > Inflating the currency does not free up purchasing power; it reduces it. > > I will take a shot at explaining this to you, and if/when it doesn’t help, leave it to someone else if they feel moved to help. > > I owe you a debt. I am obligated to pay you $100 a month to service that debt. My monthly income is $200. So I spend $100 a month on debt payments, and $100 a month on food and rent. But I can’t afford to spend half my income on debt. So I rub my Magic Economics Genie Lamp, and he grants me a wish. > > Now we inflate the currency, so that $1 buys as much as $100 used to do. I now pay you $100 a month to service the debt. (It’s only worth a dollar, but that doesn’t matter to me.) Great - now I have the same $100 a month left over to buy food and rent. Unfortunately, my leftover $100 is only worth a dollar, so I can only buy a dollar’s worth of food and rent, and that does matter to me. > > So I have to rub the Magic Genie Lamp again, and get another wish. So everyone’s salary is increased by a hundred times (in nominal dollars). Great - now the debt is still only a dollar a month in constant dollars, so I can cover that with a nominal payment of $100 (worth one constant dollar) and still have all that money left over. Unfortunately, everyone else who uses the currency is in the same boat. They can’t afford to sell for less than the value of their goods and service in constant dollars. So they jack prices up 100 times to get to the same value as they did before the inflation. And everyone is pretty much back in the same position as before, except for the person to whom I owed the debt. He is bankrupt, since all his debts were repaid in nominal terms that lost almost all their real value. > > That’s what happened in Weimar Germany, which is why I posted the link. > > Purchasing power is a function of constant currency, not inflated currency. Making a currency worthless to avoid paying a debt makes the currency worthless for purposes other than paying debts as well. > > As mentioned, your grasp of economics seems to be one with Ninevah and Tyre, so if this doesn’t sink in, I won’t worry about it too much. But in the interest of fighting ignorance, at least I threw a few punches before seeing that I was beating my fists against a brick wall. > > Regards, > Shodan **Shodan,** your analysis is completely wrong. I’m not going to spend a lot of time on this, for various reasons, but I’ll point out the most basic problem, and leave it at that. Suppose you owe me $100 a month, and you have an income of $200. You’re spending half your income servicing debt. That means you have half your income to spend on everything else. Inflation Happens. When inflation happens, everyone’s nominal income goes up. For the purpose of this example, we’ll say that your income doubles, to $400. Your debt, however, is still $100/mo. So instead of paying 1/2 your income to me, you’re paying 1/4. That means you have 3/4 of your income to spend on everything else. Now the real value of every dollar is half of what it was before. So I’m really only getting the same $200 I was previously getting. But the real value of the money you’re paying me is also half of what it was before. So now you’re paying me $50/mo. in real dollars. The outcome is the same as it was before: instead of paying half your real income to me as debt payments (interest) you’re now paying one-quarter. That means you now have 3/4 of your income to spend on goods and services, rather than debt. This is a real and substantial advantage to you - the debtor; and a real and substantial disadvantage to me - the creditor. Try it again, and see if you can reach the same conclusion. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [July 4, 2015, 5:38pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/126 "2015-07-04T17:38:15Z")
> [@Measure\_for\_Measure](#): > > …This currency union was nuts from the get-go. _It is still nuts. The problems will go away and come back until they are fixed_. Germany can either fiscally integrate with Greece (ha!) or Greece can take back control of their monetary policy. Though admittedly, I have no idea what happens to all those Euro deposits in Greek banks when the Greek government announces that Wonkabars are now legal tender. Since Germany will never fiscally integrate with Greece, the alternative is for Greece to take back control of their monetary policy. As for what happens to “all those Euro deposits in Greek banks” that’s an interesting question. I think the starting point is this: most of those deposits are not there. If Greek banks work like all other banks - and I think they do - their reserves are only a fraction of their deposits. I don’t know what the reserve requirement is for Greek banks - or if they even have one - but let’s pretend it’s 10%. That means the actual Euros they have on hand is only 10% of what they owe the public, in the form of deposits. Meaning they could pay out only 1 euro for every 10 euros on deposit. (Thus the Greek bank controls.) But it gets worse from there. Some amount of those euros - and probably a substantial amount - are not paper currency in the vaults of Greek banks. They’re in reserve accounts at the European Central Bank. Now maybe I’m wrong about this, but if Greece defaults, or leaves the EU, it seems unlikely the ECB is going to release Greek bank reserves to Greek banks. That means the only real euro reserves in Greek banks will be the actual paper notes they have on hand or in their vaults. Which, in turn, will be only a fraction of their official reserves. My guess is that, if Greece leaves the EU, they will simply convert euros to drachmas (or whatever their new currency is called). They will also establish a Greek central bank, which (like all central banks) will have unlimited power to create currency. If for example, Greece switched from the euro to the drachma, and established (for the sake of argument) a 1:1 conversion rate, all Greek banks could immediately open, and every depositor could withdraw all his deposits - only they’d get drachmas, not euros. The problem, of course, is that drachmas are going to end up being worth _a lot less_ than euros on the international market. Greece could simultaneously begin borrowing (directly or indirectly) from its own central bank, and could begin running deficits again. Meaning all the people who are owed money from the government would get their checks. Greece could then begin the process of putting Greeks back to work, and increasing its real national wealth. The big problem is going to be, that while Greek exporters (and people in the tourism industry) would suddenly find that business is booming, imports would become prohibitively expensive. The magnitude of the problem then, would depend on Greece’s ability to provide for itself. If it’s not (for example) able to grow enough food to feed its population, or produce enough energy to keep the lights on, it will be a devastating problem. If it is able to provide for itself, at least long enough for the drachma to regain some strength against other currencies, the problem will be much more manageable, and the Greeks will eventually come out ahead: meaning, in a better position than they would have been, had they stayed on the euro. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [July 4, 2015, 6:57pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/127 "2015-07-04T18:57:23Z")
Sorry, but if Greece escapes paying their debt, what prevents Portugal, Spain, italy , Ireland…from getting the same deal? ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [July 4, 2015, 7:02pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/128 "2015-07-04T19:02:44Z")
> [@ralph124c](#): > > Sorry, but if Greece escapes paying their debt, what prevents Portugal, Spain, italy , Ireland…from getting the same deal? I think that’s what Germany and the rest of the EU are most worried about. At this point, they may be more interested in punishing Greece - making an example out of them - than about solving the problem. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [July 4, 2015, 7:08pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/129 "2015-07-04T19:08:47Z")
> [@LinusK](#): > > **Shodan,** your analysis is completely wrong. I’m not going to spend a lot of time on this, for various reasons, but I’ll point out the most basic problem, and leave it at that. > > Suppose you owe me $100 a month, and you have an income of $200. You’re spending half your income servicing debt. That means you have half your income to spend on everything else. > > Inflation Happens. > > When inflation happens, everyone’s nominal income goes up. For the purpose of this example, we’ll say that your income doubles, to $400. Your debt, however, is still $100/mo. So instead of paying 1/2 your income to me, you’re paying 1/4. That means you have 3/4 of your income to spend on everything else. > > Now the real value of every dollar is half of what it was before. So I’m really only getting the same $200 I was previously getting. But the real value of the money you’re paying me is also half of what it was before. So now you’re paying me $50/mo. in real dollars. The outcome is the same as it was before: instead of paying half your real income to me as debt payments (interest) you’re now paying one-quarter. > > That means you now have 3/4 of your income to spend on goods and services, rather than debt. This is a real and substantial advantage to you - the debtor; and a real and substantial disadvantage to me - the creditor. > > Try it again, and see if you can reach the same conclusion. Yes, I come to the same conclusion. You don’t seem to grasp the difference between nominal money, and constant money. Oh well. Regards, Shodan ---
**Author:** ![up\_the\_junction](https://avatars.discourse-cdn.com/v4/letter/u/f1d935/32.png) [@up\_the\_junction](https://boards.straightdope.com/u/up_the_junction)\ **Post date:** [July 4, 2015, 7:33pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/130 "2015-07-04T19:33:50Z")
> [@ralph124c](#): > > Sorry, but if Greece escapes paying their debt, what prevents Portugal, Spain, italy , Ireland…from getting the same deal? They don’t need more money. It would seem they have workable deals. ---
**Author:** ![up\_the\_junction](https://avatars.discourse-cdn.com/v4/letter/u/f1d935/32.png) [@up\_the\_junction](https://boards.straightdope.com/u/up_the_junction)\ **Post date:** [July 4, 2015, 8:27pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/131 "2015-07-04T20:27:34Z")
Loving the hysterical propaganda in the capitalist media: [EU warns of Armageddon if Greek voters reject terms](http://www.telegraph.co.uk/finance/economics/11718296/EU-warns-of-Armageddon-if-Greek-voters-reject-terms.html) Fantastic! ---
**Author:** ![Velocity](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/velocity/32/18006_2.png) [@Velocity](https://boards.straightdope.com/u/Velocity)\ **Post date:** [July 4, 2015, 9:40pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/132 "2015-07-04T21:40:29Z")
> [@LinusK](#): > > As for the creditors, I’d just say that creditors lend, not out of generosity, but out of greed. If creditors make a mistake by lending too much, that’s a risk the creditor was paid to take (in the form of interest) and one it voluntarily took on in the first place. Without the incentive of the possibility of default, there’s no reason for creditors to learn to wise risks, rather than stupid ones. Tell us this again if you ever lend a thousand bucks to someone and they don’t repay you back. ---
**Author:** ![CarnalK](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/carnalk/32/486_2.png) [@CarnalK](https://boards.straightdope.com/u/CarnalK)\ **Post date:** [July 4, 2015, 9:57pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/133 "2015-07-04T21:57:50Z")
> [@up\_the\_junction](#): > > Loving the hysterical propaganda in the capitalist media: > > [EU warns of Armageddon if Greek voters reject terms](http://www.telegraph.co.uk/finance/economics/11718296/EU-warns-of-Armageddon-if-Greek-voters-reject-terms.html) > > Fantastic! :rolleyes: The capitalist media is pretty accurately reporting what the EU president said and described it as “alarmist warnings”. Gee, only a capitilist politician would resort to being alarmist. ---
**Author:** ![up\_the\_junction](https://avatars.discourse-cdn.com/v4/letter/u/f1d935/32.png) [@up\_the\_junction](https://boards.straightdope.com/u/up_the_junction)\ **Post date:** [July 4, 2015, 10:22pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/134 "2015-07-04T22:22:50Z")
Gee - I think the clue is in his job title. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [July 4, 2015, 11:31pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/135 "2015-07-04T23:31:17Z")
> [@up\_the\_junction](#): > > Plenty of ways for a solvent economy to raise money. The IMF isn’t on most lists. > > Lending is about risk vs. return - I know they managed it it in 07-08,but it sounds like Goldman Sachs still have you guys believing lenders should be indemnified. The basic idea is to make money by making loans, regardless of the risk. Then, when it appears the risk might hit the fan, you get somebody else to bail you out. Then, rinse & repeat. In the case of Greece, the banks that made the original loans have already been bailed out. They transferred the risk to their respective governments. Anyway, regardless of who you want to blame, the underlying fact is that Greece cannot pay back the loans. [The IMF itself has said so.](http://www.newyorker.com/news/john-cassidy/greeces-debt-burden-the-truth-finally-emerges) No amount of punishing the Greek people will change that fact. Both sides have decisions to make. The EU has to decide whether it wants to fix the problem, or make an example of Greece. Greece has to figure out what is the best route for getting its economy back on track, and getting its people back to work. This is, sadly, a political problem, not a financial one. Greece owes around 300 billion euros. That is a lot of money. But it must be put in perspective. The US Federal Reserve has funded the US economy by producing (“printing”) $3.2 trillion dollars of new money. The result has been historically low inflation, combined with a fall in unemployment from around 10% to around 5%. Anyway, the point is that, while lack of money can cripple an economy, lack of money is always an artificially created problem. Money, if you’re a central bank, is practically free to make. The European Central Bank is not the Fed, and it has not followed the Fed’s example. But if it had, all of Europe would be better off, including Greece. ---
**Author:** ![carnivorousplant](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/carnivorousplant/32/3563_2.png) [@carnivorousplant](https://boards.straightdope.com/u/carnivorousplant)\ **Post date:** [July 4, 2015, 11:38pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/136 "2015-07-04T23:38:47Z")
Aren’t these just fellows who borrowed money and don’t want to pay it back? ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [July 4, 2015, 11:45pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/137 "2015-07-04T23:45:25Z")
> [@up\_the\_junction](#): > > They don’t need more money. It would seem they have workable deals. They don’t need more money. Really? The banks have closed and the ATM’s are only dispensing small amounts of money. Somehow you think that the debt run up by duly elected past administrations don’t count ? If Greece doesn’t pay it’s debts their bond ratings will collapse and they will pay much higher interest rates. There is no escaping this. There are no “do-overs”. And as far as Krugman is concerned he literally doesn’t have a clue what will happen and posted as such: “Or to put it a bit differently, it’s reasonable to fear the consequences of a “no” vote, because nobody knows what would come next. But you should be even more afraid of the consequences of a “yes,” because in that case we do know what comes next — more austerity, more disasters and eventually a crisis much worse than anything we’ve seen so far.” ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [July 4, 2015, 11:52pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/138 "2015-07-04T23:52:40Z")
> [@Shodan](#): > > I have no confidence in my ability to explain economics to you. You might want to consider a range of causes for that ability or inability. Seriously Sho, you made a fundamental error by introducing family style budgeting in a discussion of macroeconomics. That’s ok: not all of us have taken such coursework. But if this was an exam, you would receive points off: this is something learned at the introductory level. Countries can do things that agents within an economy can’t. And aggregate prices act in fundamentally different ways than market prices. I’m speaking generally rather than digging into your post. Also, a lot of Latin American countries defaulted during the 1930s. They found that they were shut off from international capital markets _for an hilariously short period of time._ There is often a lender who will agree to take on new secured debt, especially for financing exports. We’d like to believe they are unforgiving, but that’s simply not the case. (No cite: damn, I couldn’t locate it.) This is not to say that LinusK is correct. I’m just saying that he isn’t obviously wrong: his errors, should they exist, are knottier than average. > [@LinusK](#): > > Since Germany will never fiscally integrate with Greece, the alternative is for Greece to take back control of their monetary policy. Well, more likely the alternative is to suffer extended depression/recession, until Europe’s economy is roaring. Which won’t happen soon. > [@](#): > > As for what happens to “all those Euro deposits in Greek banks” that’s an interesting question. > > I think the starting point is this: most of those deposits are not there. If Greek banks work like all other banks - and I think they do - their reserves are only a fraction of their deposits. I don’t know what the reserve requirement is for Greek banks - or if they even have one - but let’s pretend it’s 10%. That means the actual Euros they have on hand is only 10% of what they owe the public, in the form of deposits. Meaning they could pay out only 1 euro for every 10 euros on deposit. (Thus the Greek bank controls.) But it gets worse from there. Some amount of those euros - and probably a substantial amount - are not paper currency in the vaults of Greek banks. They’re in reserve accounts at the European Central Bank. Now maybe I’m wrong about this, but if Greece defaults, or leaves the EU, it seems unlikely the ECB is going to release Greek bank reserves to Greek banks. Would that even be legal? I’m guessing not. Also at least in the US reserve requirements no longer bind that much: it’s capital requirements that matter. In other words Greek banks hold lots of assets in the form of Euro-bonds. Presumably the Greek government could also capitalize them by having their new central bank loan them Wonkabars, at which point they turn around and buy Greek Government bonds denominated in Wonkabars. > [@](#): > > If it is able to provide for itself, at least long enough for the drachma to regain some strength against other currencies, the problem will be much more manageable, and the Greeks will eventually come out ahead: meaning, in a better position than they would have been, had they stayed on the euro. Maybe the question is whether the drachma (to use a more dignified label) has a 20% or 70% discount to the Euro. Would the Greek government attempt to convert (ha!) its Euro debt into the new currency? If the Drachma crashes that could make meeting interest payments a challenge both at the national and company level. How much does the ECB really want to punish Greece anyway? Would they settle for malign neglect? > [@carniverousplant](#): > > Aren’t these just fellows who borrowed money and don’t want to pay it back? The Greeks spent like drunken sailors before 2007 and the Germans were happy to loan them funds without applying too much due diligence. Once the worst recession since WWII hit, the Greeks were fucked. They could not depreciate their currency, because they were locked into the Euro. They couldn’t loosen monetary policy, because they didn’t control that and the ECB was reluctant to apply unconventional methods as much as the US did. They couldn’t stimulate their economy with fiscal spending (spend more, tax less) because the government couldn’t borrow the funds. The Greek government spending is 80% of what it was in 2007, a much bigger drop than any other European country AFAIK. That’s part of their problem actually: higher spending and lower taxes during recession can be a good thing. A year ago Greek unemployment was 27%. It’s now 25.5%. That’s pretty high. “Fuck those Germans!” If analysis fails, there’s always scapegoating. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [July 5, 2015, 12:04am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/139 "2015-07-05T00:04:25Z")
Heard in the lobby of a Greek bank: “Nikos…your money isn’t here… its in the mortgages your neighbors have”. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [July 5, 2015, 12:13am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/140 "2015-07-05T00:13:53Z")
> [@Velocity](#): > > Tell us this again if you ever lend a thousand bucks to someone and they don’t repay you back. I’ve never lent a thousand dollars to anyone, but if I did, I’d do it with the realization they might not pay me back. In my line of work, FWIW, I often extend credit, in the sense that I put people on payment plans, rather than demanding to be paid up front. Sometimes some of those people default. Nevertheless, I continue offering payment plans, because the additional money I bring in by doing it is worth more than the risk. [Previous page](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811.md?page=6) [Next page](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811.md?page=8)