How to leave a currency union
Since the launch of Delayed Gratification in January 2011, a Machiavellian doodle known as Evil Stick Man has shared his devious get-rich-quick schemes with readers each issue. Here’s his plot to cash in on leaving a currency union.
We’ve pulled together Evil Stick Man’s adventures in our first ever book, How to be evil. You can buy it for £10 including shipping in our online shop.
Become prime minister. Meet in secret with the head of your national bank and identify an upcoming bank holiday on which to leave your joint currency A and revert to your former national currency B.
Do not tell anyone else. If word got out, your countrymen would immediately rush to take out their life savings in currency A, creating a huge run on the banks and leading to the collapse of civil society.
Get your finance minister consistently and publicly to ridicule the notion that your country might leave the currency union, and to emphasise how vital the union and your currency partners are.
Order hundreds of millions of bank notes denominated in currency B from government printers in friendly and discreet dictatorship D. Call the currency ‘New Currency B’ and illustrate the notes with patriotic scenes.
Liquidate your personal assets and transfer the funds to an offshore bank account denominated in stable currency C. Place 80 percent of your savings into an inverse exchange-traded fund that bets against the value of join currency A.
On the chosen bank holiday, have all bank accounts re-denominated in New Currency B, and all cash machines filled with New Currency B bank notes.
Appear on TV to announce the switchover, the repudiation of all national debts and the lowering of nominal interest rates to zero percent. Blame your currency partners and imply a conspiracy between them and your finance minister. Sack your finance minister live on air.
Reopen the banks and float New Currency B. Its value will drop like a stone, giving a huge boost to your export market. Currency A will undergo a huge dip too: cash in your inverse exchange-traded fund at its low point. You are now rich.
If your country is not destroyed by hyperinflation, growth should pick up within a few months. If it does, stay on as PM and, in a few years, renegotiate entry to financial markets by paying back some of the repudiated debt. If it doesn’t, leave and start a new life in dictatorship D.
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