Highly unlikely. They aren't their father's Germany.
Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.
Posted on 06/11/2010 8:50:54 AM PDT by day21221
US Economist Fears Greek Debt Default in August
Greece will eventually default on its debt because the country is highly indebted and the euro zone's approach towards saving it is the wrong one, Carl Weinberg, chief economist at High Frequency Economics, told CNBC Friday.
A restructuring of Greek debt could happen as soon as August, when the Balkan country is due to receive another tranche of funds from its lending agreement with the International Monetary Fund (IMF) and the European Union, according to Weinberg.
"You can't take a country that's over-borrowed and make it more creditworthy by lending it more money," he said. "They're throwing Greece further and further and further in the hole by not addressing the problem directly and properly."
Asked when a Greek default could happen, Weinberg answered: "at High-Frequency, we are advising people to take their cell phones on their August vacation." He said a Greek default would be "harsh" for the euro [EUR=X 1.2064 -0.0042 (-0.35%) ].
Greek officials did not respond to CNBC.com requests for comment.
On Thursday, Nassim Taleb, professor and author of the bestselling book "The Black Swan," told CNBC that the economic situation today is drastically worse than a couple of years ago, and that the euro is doomed as a concept.
But famous investor Jim Rogers said now may be a time to buy the single European currency, as there are so many investors who are bearish about it that a rally may be in the making.
IMF and EU funds worth about 7.5 billion euros ($9 billion), crucial for Greece to be able to pay foreign debt, are due to be disbursed at the end of August, Weinberg said.
"Unless (Greeks) meet the quantified adjustment targets that they agreed to in the memorandum of understanding with the IMF, they won't get this money," he said, adding that his bet is that Greece will not meet the criteria.
EU Won't Let Default Happen
Under the memorandum of understanding, performance criteria include ceilings on the budget deficit, cutting government and social security spending, as well as revamping key public companies.
However, other analysts say the implications of a Greek default on the euro zone's financial institutions and economy are so great that the two institutions will disburse the funds even if the country does not fully meet the criteria.
"By alimenting Greece, we are also alimenting the European banking system," Hans Redeker, global head of foreign exchange at BNP Paribas, told CNBC.
"It is going to be tried to be protected as long as possible, to be sure that this country is viable economically," Redeker added.
A Greek debt restructuring, if it happens, would be an orderly one, to cause as little pain to the euro as possible, Weinberg said.
sent more money from America Family and give it to the world.
America has already sent 50b to Greece, to pay for Greece Retirement
So will Germany attack and reposses?
The package, to be unveiled this weekend, will include:
- the second rise in VAT this year, to 23 per cent - public sector salaries cut by up to 20 per cent
- all public sector contract workers to lose their jobs
- a severe cut in pensions
- retirement age raised to 67 (average Greek retirement age is 53)
But if the country goes bust, the financial crisis could spread quickly
What's the over/under on the duration of the riots, in weeks?
So, approximately how long will it be before the SHTF here?
So, approximately how long will it be before the SHTF here?
Anytime. We’re living on borrowed time.
Highly unlikely. They aren't their father's Germany.
“Guns ofAugust?” ping.
“However, other analysts say the implications of a Greek default on the euro zone’s financial institutions and economy are so great that the two institutions will disburse the funds even if the country does not fully meet the criteria.”
I tend to agree with this - the EU will keep kicking the can down the road a while longer. However when this happens, investors will see that they are not serious and so the Euro will take a hit nonetheless. I think I’m buying some september FXE puts.
LOL!! I wish we could give Karma here
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