What Happens if Greece Defaults?

[Obsidian 10]

I wonder if Papandreou will be elected again...

[zdo 20]

sneaking an It's Not Just Another Release post in over here

... it would fit in The Whole World is Next thread too...

 

In a sane system, when the collateral vanishes, so too does the debt (writedowns, write-offs, bankruptcy, take your pick). In an insane system, … phantom collateral supports ever greater mountains of debt.

 

How long do you reckon the insane system we have now will last? The collateral is phantom, but the interest payments are very, very real.

 

charles hugh smith-Where's the Collateral?

[Obsidian 10]

as the things are getting worse, time to change the question...will Greece leave the eurozone willingly or will be kicked out?

[Landser 10]

Well, if Greece leave the EU, then Spain, Portugal, Ireland or even Italy will follow, and the EU eventually is going to fall like a house of cards.

 

I think EU authorities don't want to force Greece to quit since it would cost them a lot.

 

BTW, here is another great article stating that Spain should leave EU before the Greece.

[Obsidian 10]

as the things are getting worse, time to change the question...will Greece leave the eurozone willingly or will be kicked out?

 

the next question is what will happen when the EZ collapse?

[SunTrader 10]

So you know that it will?

[MightyMouse 12]

It was doomed in the 90's when they dreamt it up. Smoke and mirrors pushed off the inevitable and it remains doomed until they form a federal government with centralized taxing authority.

[Mysticforex 13]

A while back I asked a seasoned, old time pit trader "what happens if you are short the Euro and the Euro ceases to exist"?

 

He did not know.

[Obsidian 10]

Guess each country would get back to their original currency as you can convert TPR to your own currency at banks (TPR= Toilet paper, a.k.a EUR) :confused:

[Mysticforex 13]

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[Obsidian 10]

A picture is worth a thousand words....

[Tams 20]

look at the big picture...

 

Greece represents 2.3% of EU's economy.

 

IF Greece disappears from the face of the Earth,

 

nobody would notice.

 

 

All these market volatilities are just another way to extract money from the weak.

Edited June 6, 2012 by Tams

[johnw 10]

look at the big picture...

 

Greece represents 2.3% of EU's economy.

IF Greece disappears from the face of the Earth,

nobody would notice.

All these market volatilities are just another way to extract money from the weak.

 

"look at the big picture..."

 

Unfortunately Tams, The Fractional Reserve Banking System levers Greece's debt ( both public and private) into a very large number indeed.

 

And to add to the woes, Europeans have permitted their Banking System to lever out to 26:1 ... twice the level that conventional wisdom dictates.

 

This is a political problem that will only accept a political solution to the angst of Nationalism versus Federalism

[Obsidian 10]

I agree that nobody cares about what will happen to Greece...but some see this as a prestige matter. if eu fails to save such a small economy, then what will they do when the crisis hits the bigger ones?

[Tams 20]

.

 

When was the last time you bought something that's made in Greece?

 

... and what did you buy?

 

 

 

I think I bought a little bottle of olive 20 yrs ago.

 

 

.

[Mysticforex 13]

.

 

When was the last time you bought something that's made in Greece?

 

... and what did you buy?

 

 

 

I think I bought a little bottle of olive 20 yrs ago.

 

 

.

 

OUZO ! about 10 years ago.

[Christian359 10]

Ouzo and olive oil I buy very often.

[Obsidian 10]

simply...nothing...

 

do they produce anything?

I do not think they are exporting olive

10 years ago I would buy Spanish olive...still the same...

 

Some weeks ago I had read an article saying Greek products has to be 30% cheaper in order to be on a par with Turkey...that is a huge number...

[jimbo320 10]

I have some drachma, they will soon be legal tender again..

[SunTrader 10]

Maybe they should do like Zimbabwe when their currency blew up.

 

They now use: U S Dollar, Euro, Pound, South African Rand and the ultra stable currency of choice Botswana Pula

[MadMarketScientist 11]

It's a beautiful place to vacation ... the only Greek product I know of is the Greek Yogurt my wife eats ... but I'm not even sure its made there.

 

They need to start paying their taxes ... the average 'stated income' of doctors is $30,000! Pathetic.

 

MMS

[Mysticforex 13]

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A Greek Default Flow Chart.

[jimbo320 10]

All flows lead to 'money' printing.

[Obsidian 10]

it is ironic that just a couple of days before the Spain called for help, Draghi was saying that the market should be confident about the eurozone...

maybe I am blind and can't see but I think many EU governments are inefficient and ineffective...

In addition, austerity measures alone will not get Greece back on its feet..or Portugal, Ireland or Spain...

[SunTrader 10]

It is only a matter of time before the default happens.

 

Since Greece has no way to devalue the price of what little exports they do have, or tourism the main industry, they are screwed.

 

Cutting government waste, corruption and collecting more tax revenue won't do it without growth in the economy. And it is doubtful they will be successful at any of these steps anyway.

 

But without a way to devalue there will be no growth.

 

Tick, tock. :cinema: