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Greece’s Olive Oil Industry Is Starting to Feel the Effects of the Debt Crisis

Greece’s Olive Oil Industry Is Starting to Feel the Effects of the Debt Crisis


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Olive growers are struggling to keep up with payments to olive oil producers

There might be an olive oil shortage from Greece if the economy doesn't improve.

As Greece deals with its economic bailout deal, the country’s olive oil industry might be compromised.

Greece’s banks have been closing as the country’s economy struggles to stay afloat, and the crisis is affecting everyone, including olive growers, according to Reuters. There are half a million olive farms, and most of them helm small family businesses.

The farmers are demanding for cash for supplies that the distributors cannot pay, and many olive growers are afraid that the banks will take over their accounts. As a result, farmers will not accept large payment transfers, opting for cash payment instead.

Chris Dimizas, managing director of extra virgin olive oil producer Greekpol in the northwestern Peloponnese, told Reuters: "They want it in cash or they prefer to keep their olive oil in their tanks."

Dimizas said that Greekpol does not have enough bank notes to keep paying for farmers and “deliveries will stop immediately” if they cannot find a raw material supplier.

Greece is the third-largest producer of olive oil in the world and has been cultivating olives for thousands of years.


The Great Con-ola

Canola oil is “widely recognized as the healthiest salad and cooking oil available to consumers.” It was developed through hybridization of rape seed. Rape seed oil is toxic because it contains significant amounts of a poisonous substance called erucic acid. Canola oil contains only trace amounts of erucic acid and its unique fatty acid profile, rich in oleic acid and low in saturated fats, makes it particularly beneficial for the prevention of heart disease. It also contains significant amounts of omega-3 fatty acids, also shown to have health benefits. This is what the food industry says about canola oil.

Canola oil is a poisonous substance, an industrial oil that does not belong in the body. It contains “the infamous chemical warfare agent mustard gas,” hemagglutinins and toxic cyanide-containing glycocides it causes mad cow disease, blindness, nervous disorders, clumping of blood cells and depression of the immune system. This is what detractors say about canola oil.

How is the consumer to sort out the conflicting claims about canola oil? Is canola oil a dream come true or a deadly poison? And why has canola captured so large a share of the oils used in processed foods?


'It's a powder keg ready to explode': In Greek village, tensions simmer between refugees and locals

LESVOS, Greece Those looking from the windows of the Drop Center, a popular school and cafe for refugees in the Greek village of Moria, could tell the mood had turned on a warm morning in early February. Afghan mothers pushing strollers were heading back to the refugee camp, while young men were rushing in the other direction.

A morning protest by around 300 asylum seekers over their squalid living conditions had begun peacefully enough inside the camp, home to some 20,000 people from 64 different countries, including Afghanistan, Syria, Iraq and Angola. But clashes soon erupted with riot police after the group tried marching to Mytilini, the main port and capital of Lesvos. Now protesters were coming toward this small village, and its residents were mobilizing.

After a truck filled with locals stopped outside the center, continually blasting its horn through the usually serene town, workers inside hit the lights and pulled down the blinds. There was a message over loudspeakers calling for villagers to gather at the church. And it provided an opportunity for the staff to evacuate those inside two at a time.

After that day, the Drop Center was closed and staff moved elsewhere on the island. For the organization that ran the school, A Drop in the Ocean, it seemed their welcome had run out. Another NGO had rocks thrown through their windows. Later a group of local vigilantes went door-to-door looking for aid workers or refugees. "I understand that [the villagers] are tense. They live in an extreme situation. But it doesn't excuse their behavior toward us," said Ida Sorbye, a worker at the Drop Center.

If the Greek island of Lesvos is the frontline of Europe's refugee crisis, Moria is a no-man's land. The small village's population of around 2,000 is now dwarfed by the camp of the same name up the road. As many as possible are crammed into the main facility, designed to hold only 2,800, with the rest spilling out in tents and hastily-built structures on the slopes of ancient olive groves. Numbers have exploded over the last year as new regulations require refugees to apply for asylum at their first landing place in Europe. For many that means Lesvos.

Turkey said on Thursday it would no longer restrain hundreds of thousands of asylum seekers in its territory from reaching Europe despite a deal to do so reached with the EU in 2016. That means islanders are things to rapidly worsen. Thousands of refugees are now on the border of Northern Greece. The crisis poses the toughest test for Greece since a 2015 financial crisis.

The situation is worsening as crime escalates. There's been at least two murders at the camp, and reports of daily fights and stabbings between refugees. Doctors Without Borders said that rape is also common inside the camp, as high as one rape reported a week.


Latest Updates

Private equity funds are also investing in Greek real estate investment trusts. And some are starting to buy mortgage- or property-backed securities sold by Greek banks that are looking to unload piles of troubled mortgage loans accumulated during the crisis.

Greece’s reliance on a bailout of over €320 billion, or about $360 billion, from the International Monetary Fund ended in 2018, and real estate prices rose by nearly 2 percent, the first increase in nine years, according to the Bank of Greece. Building permits jumped more than 10 percent, reversing a seven-year slump.

Real estate investment grew in 2018 by around 20 percent from a year earlier.

Investors have tried to cash in partly by converting properties to lucrative short-term tourist rentals, which have quadrupled in five years, reducing the supply of affordable rental housing for average Greeks. A growing number of tourist rentals are listed on Airbnb, prompting the government to mull restrictions.

Argiro Fouraci, 29, recently began renting five apartments that have been in her family for years. A teacher who lost her job during the crisis, she had struggled to get by until offering the apartments, in the popular Koukaki neighborhood near the Acropolis, as Airbnbs. She said she now clears about €400 per month on each apartment, after taxes and management fees.

The earnings help her care for her parents, who are in their 60s and whose pensions were slashed. They, in turn, support her brother, who has opened a vaping store. “Most of my friends are still unemployed,” she said. “Now I can have a life and help my family.”

Such business has lifted fortunes for Stavros Siempos, 53, the owner of Pantopolion, a grocery in Koukaki that sells feta cheese, olives and other traditional Greek products. The rise of Airbnb rentals has driven many Greeks from the neighborhood, he acknowledged. “We don’t have Greek neighbors anymore, we have Airbnb neighbors,” he said. But it is good for business, he added. “We’re better off now, because tourists have money.”

As Airbnb makes inroads into the country’s real estate, Greece’s golden visa program has opened its housing market — and reshaped its pricing structure. A scan of property listings show many mid-sized apartments in Athens, Thessaloniki and on Greek islands are priced at exactly €250,000, the minimum needed for buyers to qualify for the visa program.

The program has drawn about 10,000 investors from China, Russia and other non-European Union countries, channeling around €1.5 billion into Greek real estate in the last five years, according to Enterprise Greece. Chinese investors account for more than 40 percent of visa buyers.

Developers say that Chinese investment companies have bought apartment buildings throughout Athens, including in low-cost immigrant neighborhoods and once-rough areas like Exarchia, a graffiti-filled district populated mostly by university students.

Yannis Anastassiadis, chief executive of Anastassiadis Group, a real estate company that works with many Chinese investors, said companies typically renovate an apartment and then sell directly to clients seeking visas.

Real estate agents arrange to meet groups of Chinese visitors at the Athens airport, drive them to view properties and wine and dine them. Lawyers work with the agents to help buyers acquire tax numbers and bank accounts. A buyer does not have to live in the property to qualify for a visa, so after the deal is done, Mr. Anastassiadis’s firm also manages the apartment as a rental.

Lefteris Potamianos, president of the Athens-Attica Real Estate Association, said the visas have helped revive the market and, in turn, pushed up rental costs in some areas by as much as 30 percent.

Activists have warned that, when combined with the proliferation of Airbnb, a housing crisis is threatening entire communities.

Ms. Dolores, the artist who had to find a new home, said a foreign investor also bought a building that housed her employer, a nongovernmental organization. The group, AMOQA, conducts research and promotion of arts and studies on sexuality and gender. The building was also home to a martial arts school and a children’s activity center, she said.

“Now, the investment company will turn the building into apartments,” Ms. Dolores said. “Aside from people and families, collective spaces and neighborhood networks are also getting displaced and vanishing from the map.”

“It’s like a domino effect,” she said. “And the most vulnerable are losing out.”


Road to Perdition

Knowing nothing else about the Vatopaidi monastery except that, in a perfectly corrupt society, it had somehow been identified as the soul of corruption, I made my way up to the north of Greece, in search of a bunch of monks who had found new, improved ways to work the Greek economy. The first stage was fairly easy: the plane to Greece’s second city of Thessaloniki, the car being driven along narrow roads at nerve-racking speeds, and a night with a lot of Bulgarian tourists at a surprisingly delightful hotel in the middle of nowhere, called the Eagles Palace. There the single most helpful hotel employee I have ever met (ask for Olga) handed me a stack of books and said wistfully how lucky I was to be able to visit the place. The Vatopaidi monastery, along with 19 others, was built in the 10th century on a 37-mile-long-by-6-mile-wide peninsula in northeast Greece, called Mount Athos. Mount Athos now is severed from the mainland by a long fence, and so the only way onto it is by boat, which gives the peninsula the flavor of an island. And on this island no women are allowed—no female animals of any kind, in fact, except for cats. The official history ascribes the ban to the desire of the church to honor the Virgin the unofficial one to the problem of monks hitting on female visitors. The ban has stood for 1,000 years.

This explains the high-pitched shrieks the next morning, as the ancient ferry packed with monks and pilgrims pulls away from the docks. Dozens of women gather there to holler at the tops of their lungs, but with such good cheer that it is unclear whether they are lamenting or celebrating the fact that they cannot accompany their men. Olga has told me that she was pretty sure I was going to need to hike some part of the way to Vatopaidi, and that the people she has seen off to the holy mountain don’t usually carry with them anything so redolent of the modern material world as a wheelie bag. As a result, all I have is an Eagles Palace plastic laundry bag with spare underwear, a toothbrush, and a bottle of Ambien.

The ferry chugs for three hours along a rocky, wooded, but otherwise barren coastline, stopping along the way to drop monks and pilgrims and guest workers at other monasteries. The sight of the first one just takes my breath away. It’s not a building but a spectacle: it’s as if someone had taken Assisi or Todi or one of the other old central-Italian hill towns and plopped it down on the beach, in the middle of nowhere. Unless you know what to expect on Mount Athos—it has been regarded by the Eastern Orthodox Church for more than a millennium as the holiest place on earth, and it enjoyed for much of that time a symbiotic relationship with Byzantine emperors—these places come as a shock. There’s nothing modest about them they are grand and complicated and ornate and obviously in some sort of competition with one another. In the old days, pirates routinely plundered them, and you can see why: it would be almost shameful not to, for a pirate.

There are many places in the world where you can get away with not speaking Greek. Athens is one of them the Mount Athos ferryboat is not. I am saved by an English-speaking young man who, to my untrained eye, looks like any other monk: long dark robes, long dark shaggy beard, fog of unfriendliness which, once penetrated, evaporates. He spots me using a map with thumbnail sketches of the monasteries and trying to determine where the hell I am meant to get off the boat: he introduces himself. His name is Cesar he’s Romanian, the son of a counter-espionage secret-policeman in the nightmarish regime of Nicolae Ceauşescu. Somehow he has retained his sense of humor, which counts as some kind of miracle. He explains that if I knew anything about anything I would know that he was no monk, merely another Romanian priest on holiday. He’s traveled from Bucharest, with two enormous trunks on wheelies, to spend his summer vacation in one of the monasteries. Three months living on bread and water with no women in sight is his idea of a vacation. The world outside Mount Athos he finds somehow lacking.

“The Greek newspapers, they call us a corporation, but I ask you, Michael, what company has lasted for 1,000 years?” says Father Arsenios.

Cesar draws me a little map to use to get to Vatopaidi and gives me a more general lay of the land. The mere fact that I don’t have a beard will expose me as a not terribly holy man, he explains, if my mauve Brooks Brothers shirt doesn’t do it first. “But they are used to having visitors,” he said, “so it shouldn’t be a problem.” Then he pauses and asks, “But what is your religion?”

“Then I’m pretty sure they can’t let you in.”

He lets the thought sink in, then says. “On the other hand, how much worse could it get for you?” he says, and chuckles.

An hour later I’m walking off the ferry holding nothing but the Eagles Palace hotel laundry bag and Cesar’s little map, and he’s still repeating his own punch line—“How much worse could it get for you?”—and laughing more loudly each time.

The monk who meets me at Vatopaidi’s front gate glances at the laundry bag and hands me a form to fill in. An hour later, having pretended to settle into my surprisingly comfortable cell, I’m carried by a river of bearded monks through the church door. Fearing that I might be tossed out of the monastery before I got a sense of the place, I do what I can to fit in. I follow the monks into their church I light candles and jam them into a tiny sandpit I cross myself incessantly I air-kiss the icons. No one seems to care one way or the other about the obviously not Greek guy in the mauve Brooks Brothers shirt, though right through the service a fat young monk who looks a bit like Jack Black glares at me, as if I was neglecting some critical piece of instruction.

Otherwise the experience was sensational, to be recommended to anyone looking for a taste of 10th-century life. Beneath titanic polished golden chandeliers, and surrounded by freshly cleaned icons, the monks sang the monks chanted the monks vanished behind screens to utter strange incantations the monks shook what sounded like sleigh bells the monks floated by waving thuribles, leaving in their wake smoke and the ancient odor of incense. Every word that was said and sung and chanted was Biblical Greek (it seemed to have something to do with Jesus Christ), but I nodded right along anyway. I stood when they stood, and sat when they sat: up and down we went like pogos, for hours. The effect of the whole thing was heightened by the monks’ magnificently wild beards. Even when left to nature, beards do not all grow in the same way. There are types: the hopelessly porous mass of fuzz the Osama bin Laden/Assyrian-king trowel the Karl Marx bird’s nest. A surprising number of the monks resembled the Most Interesting Man in the World from the Dos Equis commercial. (“His beard alone has experienced more than a lesser man’s entire body.”)

The Vatopaidi monks have a reputation for knowing a lot more about you than you imagine they do, and for sensing what they do not know. A woman who runs one of the big Greek shipping firms told me over dinner in Athens that she had found herself seated on a flight not long ago beside Father Ephraim, the abbot of Vatopaidi (business class). “It was a very strange experience,” she said. “He knew nothing about me, but he guessed everything. My marriage. How I felt about my work. I felt that he completely knew me.” Inside their church I doubted their powers—in the middle of a great national scandal they have allowed a writer from VANITY FAIR, albeit one who has not formally announced himself, to show up, bunk down, and poke around their monastery without asking the first question.

But coming out of the church I finally get seized: a roundish monk with a salt-and-pepper beard and skin the color of a brown olive corners me. He introduces himself as Father Arsenios.


Cooking With Extra Virgin Olive Oil

The bottom line is that it is very, very good for you. Says Nutritionist Dr. Francesco Steiner in Rome,

&aposIf you eat extra virgin olive oil &aposraw&apos it maintains all its health properties. If you cook with it, it stimulates the digestive apparatus, especially helping the liver to work better - as a defense system&apos.

In this article, I&aposm showing many of the ways we use it in our foods (apart from on pasta!):

In Italy, in our house and everyone else&aposs home, we use extra virgin olive oil liberally every time we eat

  • because Italy has a &aposfood&apos culture which is oiled with olive oil!
  • because we love it,
  • it&aposs where olives come from and
  • where the traditions have been passed down for centuries.


Contents

Greek cuisine is part of the culture of Greece and is recorded in images and texts from ancient times. Its influence spread to ancient Rome and then throughout Europe and beyond. [4]

Ancient Greek cuisine was characterized by its frugality and was founded on the "Mediterranean triad": wheat, olive oil, and wine, with meat being rarely eaten and fish being more common. [5] This trend in Greek diet continued in Roman and Ottoman times and changed only fairly recently when technological progress has made meat more available. Wine and olive oil have always been a central part of it and the spread of grapes and olive trees in the Mediterranean and further afield is correlated with Greek colonization. [6] [7]

The Spartan diet was also marked by its frugality and unique nature, a notorious staple of the Spartan diet was 'melas zomos' (black soup), made by boiling the blood of pigs with vinegar to prevent emulsification. This dish was noted by the Spartan's fellow Greek contemporaries of the time, particularly Athenians and Corinthians as proof of their different way of living.

Byzantine cuisine was similar to ancient cuisine, with the addition of new ingredients, such as caviar, nutmeg and basil. Lemons, prominent in Greek cuisine and introduced in the second century, were used medicinally before being incorporated into the diet. Fish continued to be an integral part of the diet for coastal dwellers. Culinary advice was influenced by the theory of humors, first put forth by the ancient Greek doctor Claudius Aelius Galenus. [8] Byzantine cuisine benefited from Constantinople's position as a global hub of the spice trade. [9]

The most characteristic and ancient element of Greek cuisine is olive oil, which is used in most dishes. It is produced from the olive trees prominent throughout the region, and adds to the distinctive taste of Greek food. The olives themselves are also widely eaten. The basic grain in Greece is wheat, though barley is also grown. Important vegetables include tomato, aubergine (eggplant), potato, green beans, okra, green peppers (capsicum), and onions. Honey in Greece is mainly honey from the nectar of fruit trees and citrus trees: lemon, orange, bigarade (bitter orange) trees, thyme honey, and pine honey. Mastic (aromatic, ivory-coloured resin) is grown on the Aegean island of Chios.

Greek cuisine uses some flavorings more often than other Mediterranean cuisines do, namely oregano, mint, garlic, onion, dill and bay laurel leaves. Other common herbs and spices include basil, thyme and fennel seed. Parsley is also used as a garnish on some dishes. Many Greek recipes, especially in the northern parts of the country, use "sweet" spices in combination with meat, for example cinnamon, allspice and cloves in stews.

The climate and terrain has tended to favour the breeding of goats and sheep over cattle, and thus beef dishes are uncommon. Fish dishes are common in coastal regions and on the islands. A great variety of cheese types are used in Greek cuisine, including Feta, Kasseri, Kefalotyri, Graviera, Anthotyros, Manouri, Metsovone, Ladotyri (cheese with olive oil), Kalathaki (a specialty from the island of Limnos), Katiki Domokou (creamy cheese, suitable for spreads), Mizithra and many more.

Dining out is common in Greece. The taverna and estiatorio are widespread, serving home cooking at affordable prices to both locals and tourists. Locals still largely eat Greek cuisine. [10]

Common street foods include souvlaki, gyros, various pitas and roast corn.

Fast food became popular in the 1970s, some chains, such as Goody's and McDonald's serving international food like hamburgers, [11] and others serving Greek foods such as souvlaki, gyros, tyropita, and spanakopita.

Some dishes can be traced back to ancient Greece: lentil soup, fasolada (though the modern version is made with white beans and tomatoes, both New World plants), tiganites, retsina (white or rosé wine flavored with pine resin) and pasteli (candy bar with sesame seeds baked with honey) some to the Hellenistic and Roman periods: loukaniko (dried pork sausage) and Byzantium: feta cheese, avgotaraho (cured fish roe), moustalevria and paximadi (traditional hard bread baked from wheat, barley and rye). There are also many ancient and Byzantine dishes which are no longer consumed: porridge (chilós in Greek) as the main staple, fish sauce (garos), and salt water mixed into wine.

Many dishes show Italian influence, due to Venetian and Genoese rule of many parts of Greece from the 13th to the 18th century. [12] Such dishes include pastitsio, pastitsada, stifado, salami, macaronia, mandolato and more.

Some Greek dishes are inherited from Ottoman cuisine, which combined influences from Persian, Levantine, Turkish and Byzantine cuisines: tzatziki, yuvarlakia, dolma, boureki, baklava and more.

In the 20th century, French cuisine had a major influence on Greek cooking, largely due to the French-trained chef Nikolaos Tselementes, who, for example, created the modern Greek pastitsio, such as moussaka by combining the pre-existing eggplant dish with a French-style gratin topping.

Distinct from the mainstream regional cuisines are:

  • Cuisine of the Aegean islands (including Kykladítiki from Kyklades, Rhodítiki from Rhodes and other Dodecanese islands, and the cuisine of Lesbos island)
  • Cuisine of Argolis, cuisine of Patras, Arcadian and Maniot cuisines, parts of the Peloponnesean cuisine (Heptanisiakí), a lot of Italian influence
  • Ipirótiki (Epirotic cuisine)
  • Kritikí (Cretan cuisine)
  • Kypriakí (Cypriot cuisine)
  • Makedonikí (Macedonian cuisine)
  • Mikrasiatikí, from the Greeks of Asia Minor descent, including Polítiki, from the tradition of the Greeks from Constantinople, a cuisine with a lot of Anatolian/Ottoman influence
  • Pontiakí, found anywhere there are Pontic Greeks (Greeks from the Black Sea region)
  • Thrakiótiki (Thracian cuisine)

Many food items are wrapped in filo pastry, either in bite-size triangles or in large sheets: kotopita (chicken pie), spanakotyropita (spinach and cheese pie), hortopita (greens pie), kreatopita (meat pie, using minced meat), kolokythopita (zucchini pie) etc. In general, the Greeks do with filo what the Italians do with pizza They have countless variations of pitas (savory pies).

Apart from the Greek dishes that can be found all over Greece, there are also many regional dishes.

North-Western and Central Greece (Epirus, Thessaly and Roumeli/Central Greece) have a strong tradition of filo-based dishes, such as some special regional pitas.

Greek cuisine uses seeds and nuts in everything from pastry to main dishes. [13]

The list of Greek dishes includes dishes found in all of Greece as well as some regional ones.


Quartz

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Here’s what you need to know

Israel’s opposition is uniting to eject Benjamin Netanyahu. A potential deal could see far-right millionaire Naftali Bennett rotating the prime ministership with a more centrist leader. Meanwhile, Israel is working with Egypt to solidify its cease-fire in Gaza.

China will allow couples to have three children. But top-down diktats won’t shore up a shrinking birth rate caused by a combination of affordability issues, skewed childcare responsibilities for women, and attitudes about family size shaped by decades of the one-child policy.

Denmark allegedly helped the US spy on Europe. Its Defence Intelligence Service collaborated with the National Security Agency to gather data on top officials in Germany, France, Sweden, and Norway, according to a joint investigation by European news outlets.

Vietnam found a worrisome new Covid-19 hybrid. The southeast Asian nation uncovered a “very dangerous” variant that combines the characteristics of two existing variants first found in India and the UK.

Naomi Osaka boycotted the media at the French Open. The Japanese tennis star was fined $15,000 dollars for refusing to fulfill her media commitments and now faces expulsion from the tournament. Osaka has cited mental health reasons for her decision.

Nepal is on the brink of a health emergency. Migrant workers returning from India during the latter’s ferocious second wave have driven a surge of Covid-19—40% of tests are returning positive.

What to watch for

After a ferocious second wave of Covid-19, India’s capital will slowly emerge from a six-week lockdown starting today (May 31). In the first phase, construction sites and factories will be permitted to resume operations, to help daily wage workers whose livelihoods were devastated by the pandemic. But Delhi chief minister Arvind Kejriwal urged others to stay home, warning that Delhi would lock down again if cases rise.

A suffering capital: Through April, Delhi provided some of the most wrenching news of India’s second wave: hospitals running out of oxygen, patients begging doctors for treatment, cremation grounds so full that parks and parking lots had to be repurposed to burn dead bodies. Between April 1 and May 30, at least 13,000 people died in the city, likely an underestimate of the full toll.

Vaccines needed: Delhi has administered only around 5.3 million vaccine doses, so there’s a long way to go to reach all the 31 million or so people who live in the greater metropolitan area.

A test case: Much of the rest of India is still locked down, so Indians will keenly watch Delhi’s tentative foray into the open. From June 7, Delhi’s residents can move around the city for non-essential activities, but the Metro will remain suspended. The government hasn’t indicated when restaurants and non-essential shops will reopen. Delhi will thus become a test case for India’s dire dilemma: balancing the need to save lives with the need to restart a struggling economy. “It shouldn’t be the case,” Kejriwal said, “that people survive the coronavirus but die of starvation.”

Charting US inflation

The talking point from the latest US government report on consumer spending will be the increase in prices paid by Americans for what they’re buying. Prices increased 3.6% in April 2021, compared to the same time last year.

But this increase is due to the unusual situation of the economy recovering from the shock of the pandemic, which shut down businesses and disrupted supply lines in arbitrary ways. When people want to buy goods and services that haven’t been available, they are going to find that some of the businesses that provided them closed, others need to raise prices to recover, and that supply chains have been disrupted and need to be reconstituted. These factors will drive higher prices.

This kind of inflation is not taking the Federal Reserve by surprise: It is the intentional result of its policy stance. Since last summer, the Fed has said it will sometimes aim for inflation “moderately above 2%” to ensure that it hits its goal of an average of 2% inflation over time.

Making VC more inclusive

There’s no question that there’s lots of money in venture capital (VC) these days—spending soared to a record $131 billion in 2018. But barely 1% of VC funding that year went toward Black or brown entrepreneurs.

Anthony Oni, managing partner and CEO of Elevate Future Initiative at investment firm Energy Impact Partners, has some suggestions for how VCs can approach opportunities to fund Black founders:

  • Provide space for ideation and access to world-class technology
  • Provide access to mentors and a supportive community
  • Hear and empathize with Black founders’ stories, demonstrating success against all odds

Surprising discoveries

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A Bitcoin mine was hiding in a marijauana farm. In Birmingham, UK, police raided a cannabis farm and found a Bitcoin mine that was stealing electricity from the grid.

Boris Johnson got married in secret. The British prime minister and his partner Carrie Symonds tied the knot in front of 30 guests at Westminster Cathedral.

Germs are cleaning Michelangelo’s sculptures. In the Medici Chapel in Florence, scientists and restorers are deploying bacteria to eat away at stains on marble sculptures.

Mice overrun eastern Australia. In “the worst mouse plague in living memory,” the rodents are eating their way through stores of grain, nibbling at people as they sleep, and biting the toes off chickens.


The Grumpy Economist

A few salient points that don't seem to be on the top of the outpouring of Greece commentary.

1. Greece seems to be coming to a standstill. Kerin Hope at FT (HT Marginal Revolution):

2. If a Greek goes to the ATM and takes out a load of cash, where does that cash come from? The answer is, basically, that the Greek central bank prints up the cash. Then, the Greek central bank owes the amount to the ECB. The ECB treats this as a loan, with the Greek central bank taking the credit risk. If the Greek government defaults, the Greek central bank is supposed to make the ECB good on all the ECB's lending to Greece. It's pretty clear what that promise is worth.

Some observations on what these stories mean.

1. The argument is not about "lending" to Greece, i.e. covering this year's primary surplus. The argument is whether the IMF, ECB, and rest of Europe will lend Greece money to. pay back the IMF, ECB, and the rest of Europe. This is a roll over negotiation, not a lending negotiation.

The loans were not intended to be paid back now. The loans were intended to go on for decades. But with conditions. The negotiation is about enforcing or modifying the conditions for a roll-over.

Rolling over short term debt with periodic reviews is a nice incentive mechanism. Foreign policy should try it.

2. The latest proposed agreement includes sharp increases in tax rates. Now? Are you kidding?

Source: theguardian.com
I am reminded of the story of a town, that had a bridge, that had a 50 mph speed limit. A drunk driver, going 85, caused horrific crash. The town lowered the speed limit to 25.

What Greece needs is to get going again. That is, to persuade anyone that this is a good country to start a business, invest, hire people, and so forth. In particular, if Greece is to pay back debts, it has to become an export-oriented growth economy, and run trade surpluses Higher VAT, higher corporate taxes, and higher taxes on successful entrepreneurs are hardly the way to go about attracting investment.

I think of taxes in terms of incentives. Keynesians look at aggregate demand. Either way, raising tax rates, now, in an economy where nobody is paying much of anything because they see the big explosion ahead seems destined, pragmatically, to raise no revenue. And, incidentally and humanely, to further crater the economy.

Despite cuts, the Greek government is still spending north of 50% of GDP. If you want to get primary surpluses, that seems the place to cut.

But with an economy at a standstill, major structural reform (like, go back and put back in the structural reforms that Syriza scuttled on arrival) seems like a more promising short-term set of conditions. And we'll see you on the next big roll-over.

3. Rolling over post-dated checks is a fascinating story to a monetary economist. Money is created when needed, apparently.

4. The bank run, or "jog." Remember, the big Greek bailout already happened. Private investors, largely European banks, who held Greek government debt got to sell their debt to government and IMF. Bailouts are creditor bailouts.

One way of viewing the current slow motion crisis is an invitation for ordinary Greeks to join these investors. Take euros out of the bank. The government default will happen, possibly with bank closures, capital controls, currency exit, and expropriation. But lending to Greek banks is now bailed out, with the losses sent to Europe via the ECB, just as German bank's lending to Greek banks was bailed out in the first round. Too clever, maybe, but that is the effect.

Too clever, really, to describe the situation. It only works if the government actually does exit, and soon. Getting money out of the banks and then defaulting is one thing. But a frozen economy can't go on long.

I repeat: the run and non-payment, freezing the economy, happen largely because people see capital controls, bank account expropriation, grand all-around default (your mortgage might get redenominated to Drachmas too, and forgiven once the bank goes under, so why pay now) and Grexit in the future. The simplest way to stop the run and economic cratering would be a solid commitment from both sides that government default will not mean Grexit, capital controls, etc.

5. Without the banks, this would all be simple. Greece could default, stay in the Euro (unilaterally if need be) and Euro zone. One government defaulting on debts to other governments is not a crisis.
All along though, the involvement of the Greek banking system makes it much harder.

Greece has 11 million people, $242 billion GDP and 51,000 square miles. That's as many people as Ohio, the GDP and land area of Louisiana. Why does Greece need its own banking system in a common currency and free market zone?

Think how much easier this would all be if Europe had gotten around to integrating its banking system. In any city in the US, the major banks are all national. If California defaults on state bonds, your Chase bank account is safe, and not because of Federal deposit insurance. Because the bank has no exposure to California bonds.

Imagine if Greeks deposited money in a local branch of a large pan-European bank, backed by assets spread throughout Europe. Imagine if Greeks borrowed money from the same bank, funded by deposits spread throughout Europe. Imagine if, when a remaining Greek bank defaults, the European equivalent of Chase could sweep in, and take over loans and deposits seamlessly. A default by the Greek government on its bonds would be inconsequential to Greek banking.

Why not? Well, such banks would not hold vast amounts of Greek government debt. Such banks would not have Greek ownership, or be controlled by the Greek regulatory system. Such banks would not be available targets of Greek capital controls, or a currency change.

Greece needs an independent, national, banking system about as much as Ohio or Louisiana need independent, state banking systems.

6. And currency. Many economists keep saying how wonderful it is for tiny countries to have their own monetary policy, so they can devalue their way out of crises like these. They advocate "capital controls" (English translation: expropriation of savings). That's how Argentina, say, is such a success story. We may be about to see.


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Comments:

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  3. Selwyn

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