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Thread: Economic Crisis in Greece - Financial Crisis

  1. #1
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    Economic Crisis in Greece - Financial Crisis

    Anyone following the economic crisis in Greece? It's possible that Greece could default on $230 billion euro in bonds. The situation is also critical in Portugal and Ireland. If Greece defaults the sum will be twice the impact of the Leehman Brothers collapse.

    The real danger is a collapse in Spain which is 11.9% of the Euro-zone GDP. Unemployment is running at 19% in Spain.

  2. It's the fruits of socialism. As they have sown, so shall they also reap.
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    Spain is actually is in far worse shape than Greece. The foreign liabilities: Spain at 91pc of GDP (€950bn); Portugal 108pc (€177bn). This compares with 87pc for Greece (€208bn).

    http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7159456/Fears-of-Lehman-style-tsunami-as-crisis-hits-Spain-and-Portugal.html

    Quote Originally Posted by Will.Spencer View Post
    It's the fruits of socialism. As they have sown, so shall they also reap.
    The US is on the same road: Clinton-Obama-Alinsky

  4. Quote Originally Posted by bogart View Post
    The US is on the same road: Clinton-Obama-Alinsky
    The U.S. gets away with massive debt cheaply because of their AAA credit rating. As soon as this is downgraded, the cost of maintaining the U.S. debt will rise sharply and the U.S. economic picture will change overnight.

    Of course, the U.S. has one huge advantage over Spain or Greece. Spanish debt and Greek debt are denominated in U.S. dollars -- the same as U.S. debt. This means that in order to pay back their debts, all three countries will need U.S. dollars. The Spanish and the Greeks will need to trade something valuable to get those U.S. dollars. The U.S. will only need paper and ink.
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    Quote Originally Posted by Will.Spencer View Post
    The U.S. gets away with massive debt cheaply because of their AAA credit rating. As soon as this is downgraded, the cost of maintaining the U.S. debt will rise sharply and the U.S. economic picture will change overnight.
    Dick Morris is say the same thing about inflation. Right now people are scared and aren't spending. As soon as people start to feel confident the will be too few dollars chasing the same amount of goods and services.

    Quote Originally Posted by Will.Spencer View Post
    Of course, the U.S. has one huge advantage over Spain or Greece. Spanish debt and Greek debt are denominated in U.S. dollars -- the same as U.S. debt. This means that in order to pay back their debts, all three countries will need U.S. dollars. The Spanish and the Greeks will need to trade something valuable to get those U.S. dollars. The U.S. will only need paper and ink.
    Spain, Portugal and Greece are also limited by the European Central Bank in that they don't have carte blanche to print money. As long as the US Federal Reserve and China keep buying US debt, there really is no restriction on how much money the US Treasury is able to print.

    The financial crisis in Europe buys the US some time. The drop in the Euro is causing a decline in commodity prices and the cost of imports.

    But on the downside, the appreciating dollar hurts the US employment picture which continues to get worse.

  6. Quote Originally Posted by bogart View Post
    Dick Morris is say the same thing about inflation. Right now people are scared and aren't spending. As soon as people start to feel confident the will be too few dollars chasing the same amount of goods and services.
    Oh yes... the most likely outlook for the next decade is hyperinflation.

    Massive deleveraging and falling values of real property have prevented that up to this point, but those can't continue forever.

    In the long term, massive trade deficits must lead to currency devaluation.
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    Quote Originally Posted by Will.Spencer View Post
    Oh yes... the most likely outlook for the next decade is hyperinflation.
    Once the recession ends, the inflation is going to go double digit. The US actually had a few good years after the 73-75 recession. It really didn't come apart until 1980 when Paul Volker was forced to raise interest rates.

    But one day this recession — despite Obama’s best efforts — will end and things will begin to look up again. Then we can expect all of this money to come out of its parking space and get back on the highway of commerce. All at once. The inevitable result will be double-digit hyperinflation.
    COMING NEXT YEAR: OBAMA’S INFLATION at DickMorris.com

    Quote Originally Posted by Will.Spencer View Post
    Massive deleveraging and falling values of real property have prevented that up to this point, but those can't continue forever.
    The deleveraging is sanitizing the massive US Government spending and debt. At some point it will start to stink.

    I
    Quote Originally Posted by Will.Spencer View Post
    n the long term, massive trade deficits must lead to currency devaluation.
    As long as China insists at keeping the Yuan at 6+ to $1 and continues to fill the Walmarts with cheap goods, the good times with continue. When the day comes that they decide to stop, the US will be in these "Good Times":


  8. #8
    Well economic recession swept all the countries in the world we can't do anything about it but I wish this year would be better for all of us.

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    Quote Originally Posted by BenTen View Post
    Well economic recession swept all the countries in the world we can't do anything about it but I wish this year would be better for all of us.
    The second half of this year, there's a chance of a double dip recession and sovereign risk. For instance, Portugal is having trouble getting short term financing on its debt. A Portugal default would kill the Euro.

    2011-2012 there are significant inflation risks.

  10. #10
    Well if you ask me... when you have 1.000 - 2.500 euros a month and pay 2 euros for a coffee is not crisis, crisis is when you have 200-300 euros a month and pay 2 euros for a coffee.
    Is not crisis when you have 1.000 euros / month and pay 300 euros to rent an apartment, crisis is when you have 200-300 euros a month and must pay 200 for an apartment.
    Crisis in not when you can buy a nice car in 6 months, crisis is when you must wait more than 5 years to buy a second hand car.
    ...

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