Fear factor

Greece says one thing that the end is near

Why you ask

Captilism is built on three pillars these are foundation of western civilisation god help us after it must always expand although for last four years the ecomony has contracted captiliam has still expanded how you ask the goverments have spent money to keep the system going trillions now they are out of money


pillar one is the solid foundation of the greatest modern military power in the world this pillar is the great reserve currency of the world the united states dollar which is backed by gold
this solid foundation of western civilisatin fell in August 15, 1971,when President Nixon closed the dollar for gold now only supported by faith of people in dollar system

pillar two is the military might of the united states of america which backs the threats with action say iraq, afganistan, libyra after 10 years broke and exchausted what do the soldiers do when they stop being paid would you show up for work without being paid

pillar three although exotic technologies exist and work you are either bought or killed for no threat to oil is allowed no matter the recource. the current theory of how oil is made is well wrong still we are taking to much of it to quickly mother nature who air we breath will react in exotic and increasing ways ever wonder with global warming why the winters are getting colder


what comes after is the question no one knows central banks are the emeny of the people tax rates in most countrys are closer to 80 how can that be well

with all taxes on your weages close to 55 percent we all pay tax on every single item we buy and the goverment wants us to go out and spend good luck to that

money is a game of confidence once that is gone why well it is since they stopped backing it by gold take away the confidence whats left gold

Given the severity of the Greek sovereign debt crisis, the possibility of default is quite a possible scenario. Other things equal Greece will definitely restructure its debt in the near future, which practically means that the creditors will lose much of their money. This is still the optimistic scenario though, as the pessimistic approach says that Greece will declare default in maximum one and a half years from now (or even earlier if it doesn't receive the next payment from the troika).

Under such conditions, it is interesting to develop some of the possible scenarios that might occur regarding the impact a Greek bankruptcy will have on the euro, on the European Union and perhaps on the global economy. To formulate the possible scenarios we first need to take some real facts into account.

The first parameter that we need to take into consideration is that most of the Greek government bonds are in the hands of German and French investors (banks basically), while a small part is held by Cypriots. In simple words this means that most of the money that Greece has to pay back, will be given to Germans, French and to some extend Cypriots.

Another factor that we cannot omit is that Greece belongs to the eurozone, whereby a failure to save Greece would send all those necessary negative messages to the markets that would convince them that other euro countries such as Portugal and Ireland might easily meet the same fate.

The third fact is that Greece has received the biggest bailout ever to be given to a country (110 billion euro) and if that amount does not prove enough to prevent bankruptcy, then what can?

Given the above facts, the first scenario suggests that a Greek collapse will transmit the crisis to the countries of the creditors who have already started shaking. Hence the problem will multiply geometrically, meaning that a much deeper crisis will come with serious consequences on the integrity of the EU.

The second scenario is that the markets and the speculators (they are the same basically), will be more than convinced that other countries who currently face similar problems with Greece will also be brought on the verge of bankruptcy. Countries such as Portugal, Ireland and even Spain, who will no longer be in a position to fulfill their obligations towards their creditors, since if the markets lose any faith in their capacity to pay back, they will simply not lend them any money, which practically equals bankruptcy. In the parlance of the markets such an occasion will raise the spreads of the government bonds into extraorbitant levels. So either they will have to receive more money from the European Safety Mechanism or declare default. No matter the case the two speed Europe, will become two-tier.

The third scenario is the combination of the above two, which is understandably the worst possible case. The European periphery will practically come to the position where Greece currently stands, while the European center will experience serious shocks, with the ramifications being unpredictable but surely worrisome. At any rate the single currency will collapse and the EU architecture will have to undergo fundamental reforms (extremely difficult) or go down as well. And of course if the EU collapses there is no telling as to what might happen at a global level. Surely something really bad. After all do not forget that the US economy is also in a really bad situation.

No matter the scenario the sure thing is that all will be more or less affected if Greece goes bankrupt. As such the Greek crisis is in fact a European crisis and I personally see no way out of it as things currently stand and with the kind of measures that the European leaders currently have in mind.


CG

fear spreads the only reason that the system is still works is that it is the best interest of all countries to keep it going
this has now changed a bankrupt greece will bankrupt all big banks in germany and france the goverment cannot bail them out it many many trillions ireland portugal spain italy will be immediately affected fear will run riot euro will tear apart people will not trust their money it will spread until all fiat currencys collapse all gold silver will rule it will also lead to greatest depression in history of world because all currency are fiat not backed by gold and silver

hope imm wrong but i believe people if pushed will look after themselves first who will lead china because they have hundreds tons of silver maybe russia because gold

Quote:

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Originally Posted by City Gent

Given the severity of the Greek sovereign debt crisis, ........

CG

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Good post C.G. I don't think anyone can see a clear way out of this crisis.