Credit keeps zombies alive - The Daily Reckoning

Credit keeps zombies alive

Jul 13, 2015

- By Bill Bonner

Bill Bonner
Athens, Greece

Dear Diary,

"It finished. Euro finished. Greece finished."

With this apocalyptic shorthand, our taxi driver described the situation in Athens.

The banks have been closed for two weeks. Greek citizens - but not tourists with foreign credit cards - have been restricted to 60 euros per day, the limit on what they could take out of an ATM. And when Friday came to a close, it looked like the end was at hand. Tsipiras was caving in to Europe's beer drinkers; he would accept their terms, said the papers.

Trouble was, his own countrymen had just voted to reject almost the same deal. Then, as the weekend progressed, the terms got worse. By this morning, word in the press is that he will have to surrender completely...or be forced out of the euro.

Like a storm chaser, we hopped on a plane to Athens to study the tornado moving through downtown Athens. It would be fun to see so many vanities and pretensions fly high, we thought. At the very least, it would be instructive, useful training for the storms coming elsewhere.

--- Advertisement ---
You Too Could See Potentially Big Returns from this Special Segment...

There are stocks from a special segment of the market that have a huge potential for profit.

And today we want to show you a way to plug into this opportunity.

You see we have picked out and recommended such companies in the past.

And some of our picks went on to deliver returns such as 250% in 2 years, 123% in just 3 months, 288% in 2 years 5 months, and more...

Yes, this approach is proven as the track record shows.

Now we are sure you are interested in finding out more about this opportunity.

So click here for full details...


But nothing happened. No accident. No twister. No train wreck. No panic in the streets.

In fact, from our explorations in the Plaka area, we have found only tourists...and they seem to have no idea that there even is a financial crisis.

Last night, for example, we went over to the Syntagma Square to look for mayhem and chaos. All we found was a squad of police, dozing in an armored bus. ATMs were working; no lines in front of them. Restaurants were about half full.

Nor did we see signs of extravagant spending or reckless investment. This is a city about the size of Paris. But it has no Arc de Triomphe, no Eiffel Tour, no Louvre. No fancy apartments, no gleaming offices. At least, none that we saw.

Its main achievements were completed more than 2,000 years ago. And you wonder how these people did it. The Parthenon required huge investment and meticulous organization. It is breathtaking...a masterpiece. There is no sign of such capability here today. Instead, Athens is a washed-out, slightly trashy Mediterranean burg.

"Hey, can I help you?"

A seedy-looking man approached. We didn't know what he was offering, but we didn't want any.


We turned to walk in the other direction. He followed.

"Hey...what are you looking for...I can help you find it..."

"Well, I'm looking for signs of financial breakdown."

"Oh, I can help you find drugs...women...gambling... But I don't know anything about financial breakdowns."

We gave the man another 'thank you' and went off.

As you know, Greece is just another front in the Zombie War. The real issue here is the same as all the other fronts - how to keep the credit flowing.

Honest people make. Zombies take. They take what they can from earnings and savings, but it is not enough. It is credit that keeps them alive.

Zombie businesses borrow more and more to keep the lights on. They pay out big bonuses, and their stock goes up!

Cheap credit keeps the feds in business too. Practically every government in the world is operating in the red. Take away the red and zombie programs would have to be curtailed.

Cheap credit funds the layabouts, the chiselers, the lobbyists and lawyers, foolish wars and foolish investments, and all the many millions of people who live at the expense of others, many of them pretending to do useful work.

The test is simple in theory: if no one were forced to support them, would they still have the same income? If this answer is 'no,' they have been zombified.

But in practice, it can be hard to tell a zombie from an honest living, breathing, homo sapiens. Often they don't even know themselves. Some honest professions, for example, have been almost entirely zombified. So have entire countries. Greece, for example, has been able to live beyond its means - on credit provided by Northern Europeans. Many of its people - especially those who work for the government - have gotten used to earning more than they're worth.

There were very few zombies in the world of Pericles, Aristotle and Euclid. The economy could not support many parasites. Now, the world is full of them.

It was all quiet on the Greek front over the weekend. As of this morning, the can was still in the middle of the street - waiting either to be kicked further down the street...or to blow up. But it's been in the street for so long, both the locals and the tourists seem to have forgotten about it.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

Disclaimer: The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Recent Articles

How to Build Affordable Homes in India July 19, 2018
Rajiv Talwar, the CEO of DLF, makes a few interesting points in a recent interview.
Deep State Turns on Trump July 19, 2018
In the last half-century, no president has ever seriously challenged the Deep State. Bill discusses the repercussions of same in today's issue...
A Sense of Melancholy July 18, 2018
Donald Trump: Traitor? July 18, 2018
Is Trump undermining the foundations of the Warfare State and the Police State? Is this a challenge to the power of the Deep State itself? Bill Bonner offers insights into the same.

Equitymaster requests your view! Post a comment on "Credit keeps zombies alive". Click here!

1 Responses to "Credit keeps zombies alive"

Guy Jones

Jul 14, 2015

Robert A Heinlein once wrote: When the monkeys realize that they can vote themselves bananas, they will never climb another tree".

But this perhaps was sourced from a quote attributed to Alexander Tytler (1747 - 1813). The full text follows...

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.
Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage."

Equitymaster requests your view! Post a comment on "Credit keeps zombies alive". Click here!