Greek default could threaten the Euro

[pscot]

http://www.spiegel.de/international/business/0,1518,665679,00.html

Twenty five billion Euros worth of Greeek notes fall due after the first of the year. The Greeks are broke. If they default, the smell blood will attract predators, who will likely test the solvency of the weaker Eurozone states, potentially threatening the whole system. Details at the link.

[Mojorabbit]

1. Would this chase money back into the dollar I wonder? n/t

[girl gone mad]

3. Long term, I think the Euro has a very uncertain future.

For it to survive, there will need to be a lot of structural changes.

[A HERETIC I AM]

4. Like what?

For it to survive, there will need to be a lot of structural changes.

Like what, for instance?

You "think the Euro has a very uncertain future."

Why? What can be done to make it less uncertain?

[girl gone mad]

10. What can be done to make it less uncertain?

At this point, maybe nothing.

[roamer65]

8. It will chase more into gold.

A European currency crisis will spill over into the fiat currency system in general. The dollar may benefit in the first few weeks, but gold will win in the long run.

[A HERETIC I AM]

2. The question asked by many DU'rs; "Should I buy Euros" is somewhat answered by this article

And that answer is "only if you're convinced that each and every member of the EU will pay on it's sovereign debt".

The question of whether or not a country will pay on it's bonds is a question somewhat easier to answer if you are talking about The United States or even Japan.


"All that glitters is not"---- the Euro.

[westerebus]

6. Isn't this the bet?

Goldman Sacks is betting the dollar will go up from my understanding. With a default in Greece or the collapse of that government, an other possibility, the ripple effect would trash the Euros run.

Gets us right back to buy the world's reserve currency and our junk bonds.

A lower euro is good for the Germans. A higher dollar will take some of the top off commodities. Good for most of the world. We are pretty much stuck with deflation and high unemployment here at home. I don't see how a stronger dollar will have that much of an impact on GDP growth in the short term.

If, the FED is going to unwind sooner rather than later, I would think they would want to play into a stronger dollar given the weak fundamentals in the economy. Could that be why GS is shorting the Banks?

I suppose you would have to be inside the room, so to speak, when that possibility was explored.

Which brings up Spain. Then there's the old soviet bloc, Estonia, Latvia,and Hungry which are all in trouble. Which all together don't add up to the GDP of California. Which is in trouble.

I guess we will have to wait to see who pops first.

[pa28]

5. Interesting story on a couple of levels.

We've heard about potential flaws in the euro for a while but in practice the currency has been performing well. Maybe a Greek default will give them an interesting real world test to contend with.

Also if you look at the Dubai default, the Greek credit downgrade and all their struggling peers you wonder if you are not looking at the start of an important trend. Moody's even saying today that the U.S. could be in a http://www.streetinsider.com/Analyst+Comments/Moodys+Says+a+U.S.+Debt+Downgrade+Is+%22Not+Inconceivable%22/5166330.html">similar situation by 2013:

[westerebus]

9. Nuclear weapons.

That changes the ratings game. Not to mention we own the world's reserve currency. And we have been known to put pathologically amoral people in charge of both of them from time to time.

[pscot]

7. George Soros spoke today

at a conference sponsored by the London School of Economics. He didn't mention the Greek situation, but he did talk about the roll Europe should be, and is not, playing. He took a slap at Angela Merkel. The story is all over Google news, but none of the stories give the full text of his remarks. The best one was on Market Place this morning, but I can't find it now. This guy probably has a better grasp of what's going on in the currency markets than almost anyone else. Here's a link to Bloomberg. On edit: Whoops! Wrong link. That's the Middle East Financial Net. That one is more detailed than the Bloomberg version anywy.
http://www.menafn.com/qn_news_story.asp?storyid=%7B62ECB679-2DF3-41A3-8588-729F5C3C8071%7D