Monday, September 26, 2011
When Greece Defaults
Greek default will certainly cause the rest of the world to fall into recession and may push the globe into outright economic depression. It would almost count as miracle if Greece somehow staves off bankruptcy as a nation. The consequence of that one relatively small nation defaulting may be the end of the unified economic and currency system for Europe, but Main Street USA will not be able to escape the consequences either. The economy of the United States is on anything but a strong footing but America is a rock relative to basket case Europe. If Greece can not sustain her government debt, what will happen if the other so-called PIIGS (those being Portugal, Italy, Ireland, the aforementioned Greece, and Spain) with their fragile economies start to fall? If one or more of the PIIGS stagger, there may be no saving the rest and Italy alone is simply too large to bail out.