Greece Collapse spreads doom for the rest of the world's economy.

[Blu-ray]

Depending upon how the vote goes this weekend could mean another repeat of 2008. It won't be evident at first but as time progresses, the EU will have to ensure that EU bonds are good and that Spain, Portugal, and Italy won't have the same thing occur.

Bankers, governments and investors are preparing for Greece to stop using the euro as its currency, a move that could spread turmoil throughout the global financial system.
The worst case envisions governments defaulting on their debts, a run on European banks and a worldwide credit crunch reminiscent of the financial crisis in the fall of 2008.

...

Here's where things get scary.

The European Central Bank and European Union would have to persuade investors in government bonds that they will keep Portugal, Spain and Italy from following Greece out the door. Otherwise, borrowing costs for those countries would shoot higher.

The main way European leaders have tried to calm bond markets is by lending to weaker governments from two bailout funds. Experts say these two funds, designed as a financial firewall to stop the crisis from spreading, need more firepower.

Much of the (EURO)248 billion ($310 billion) left in one of them, the European Financial Stability Facility, was pledged by the same countries that may wind up needing it, Vamvakidis says.

There's also a (EURO)500 billion European Stability Mechanism that's supposed to be up and running next month, but Germany has yet to sign off on it.

"If they fail to reassure bond investors, all of the nightmare scenarios come into play," says Robert Shapiro, a former U.S. undersecretary of commerce in the Clinton administration.

The biggest danger is a fast-spreading crisis known in financial circles as contagion - a term borrowed from medicine and familiar to anyone who has watched a disaster movie about killer viruses on the loose.

"It's like a disease that spreads on contact," says Mark Blythe, professor of international political economy at Brown University.

....

Here's where things get scary.

The European Central Bank and European Union would have to persuade investors in government bonds that they will keep Portugal, Spain and Italy from following Greece out the door. Otherwise, borrowing costs for those countries would shoot higher.

The main way European leaders have tried to calm bond markets is by lending to weaker governments from two bailout funds. Experts say these two funds, designed as a financial firewall to stop the crisis from spreading, need more firepower.

Much of the (EURO)248 billion ($310 billion) left in one of them, the European Financial Stability Facility, was pledged by the same countries that may wind up needing it, Vamvakidis says.

There's also a (EURO)500 billion European Stability Mechanism that's supposed to be up and running next month, but Germany has yet to sign off on it.

"If they fail to reassure bond investors, all of the nightmare scenarios come into play," says Robert Shapiro, a former U.S. undersecretary of commerce in the Clinton administration.

The biggest danger is a fast-spreading crisis known in financial circles as contagion - a term borrowed from medicine and familiar to anyone who has watched a disaster movie about killer viruses on the loose.

"It's like a disease that spreads on contact," says Mark Blythe, professor of international political economy at Brown University.

http://hosted.ap.org/dynamic/stories...06-16-09-58-56

Tick Tock Tick Tock... what is going to happen?

[lycanox]

It could very easily be worse than 2008.

Afteral in the worst case.
After Greece is done. Italy and Spain are likely to fail. After that Ireland, Belgium and France will come under scrutiny. Followed with the rest of Europe.
When that is done, the UK and the US will start to look bad due to their enormous debts. And the rest will be dragged down along down along with the west.
Not to mention that this whole chain collapse will set off bank failures like Lehman of all over the world.

Back in 2008, the governments themselves managed to stop a complete collapse by pumping money in the fiscal world.
With the governments themselves bankrupt. There is nothing to prevent the system from collapsing.

[Blu-ray]

It could very easily be worse than 2008.

Afteral in the worst case.
After Greece is done. Italy and Spain are likely to fail. After that Ireland, Belgium and France will come under scrutiny. Followed with the rest of Europe.
When that is done, the UK and the US will start to look bad due to their enormous debts. And the rest will be dragged down along down along with the west.
Not to mention that this whole chain collapse will set off bank failures like Lehman of all over the world.

Back in 2008, the governments themselves managed to stop a complete collapse by pumping money in the fiscal world.
With the governments themselves bankrupt. There is nothing to prevent the system from collapsing.

Exactly. This is far from over and as I've feared for awhile now, the worst is yet to come.

[Confuzion]

The most positive outcome is for the rest of the EU to suck Greece dry while there are elections again and again over there :( This will give Italy, Spain, Portugal, Ireland and France some time to get rid of excess debt and might just maybe provide a chance of survival for the EU. I won't put my money on this one, though. It also doesn't agree with my conscience.
The most negative outcome is Greece leaving the Euro and collapsing its economy (this is the best for Greece, though... for reference see what happened in Argentina). This solutions agrees with my conscience, although the pain for Greece will be significant, it will be better in the long run. It'll also force the situation for the rest of the EU.

[Musibike]

How much longer do you guys think it will be before GREECE turns into an out of control social meltdown? When Government gives up. Police and security aren't getting paid so they split and say to Hell with this. Or, another country comes in and occupies Greece and takes its spoils of social crash. Can it end up a house cleaning operation like SYRIA? Doing away with the KID factory families loading the government down with dept. Same thing like in 1936. Extermination occurs at regular intervals in history?


TICK TICK TICK TICK .......