If you have been following the global news at all for the last few weeks, you’re probably aware of the growing Greece debt crisis currently going on in the country right now. Things for the Greeks started look especially grim once the country agreed to some tight budgeting that would, hopefully, move Greece from crisis to non-crisis mode. There’s plenty to be said about the topic, especially from a financial standpoint, and is something this AZ gemologist will attempt to tackle from a jewelry perspective.
As can be expected, spending in Greece is down in general and the country as a whole has been placed on a restricted spending budget while taxes are increased on most goods. Known as capital control, this has also affected the spending of Greek citizens but, as this AZ gemologist has recently learned, it hasn’t been all bad news for the country. Although Greeks are limited in the amount of cash they can withdraw daily from their accounts to 60 euros (the equivalent of $66), there has been little regulation over the amount of spending Greeks can do from their debit and credit cards, leading many to spend more than they probably should.
This has resulted in many Greeks assuming that capital control limitations may eventually become worse and a growing fear that they may lose their savings completely. Rather than suddenly becoming penny pinchers, as this AZ gemologist knows many Americans would do in similar circumstances, it instead has led many Greeks in the opposite direction: they have actually increased their spending budgets. The more surprising aspect of this information is they are spending more on luxury goods paid through electronic means since there is no cap on this.
This AZ gemologist assumes that part of the reasoning may stem from potential resale values once the economy begins to improve, if it ever does. Creating an investment with jewelry, for example, is something people have been doing for decades and can be an easy way to gain a limited form of income when jewelry resale prices are good. Apparently, this is something some Greeks have adopted on a larger scale during their economic crisis and some are hoping their large investments turn into a future sale or at least something valuable they can hold onto for the immediate future.
Unfortunately, this AZ gemologist learned that some economists say this may not be a wise idea in an unstable economy like Greece’s. While making an investment with jewelry could lead to a future sale, it may not lead to the sale price many would expect. Selling anything at all also may not necessarily be the case with plenty of other high-priced goods. Some Greeks have actually spent a large amount of their money on other luxury goods, like television sets, cars, and smartphones, perhaps in hopes of similar outcomes. However, these items have notoriously low resale prices as the overall value depreciates after one day of use, making them a poor purchasing choice for limited budgets.
Despite all of this, it seems like luxury spending is still a major draw for Greek residents and doesn’t seem to be dying down anytime soon especially as banks reopen.