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Greek exit from euro could plunge US into recession
Fox News ^ | May 24, 2012 | Peter Morici

Posted on 05/25/2012 1:57:30 PM PDT by SteelToe

If Greece leaves the euro, the U.S. economy could easily slip into recession. That cost is worth bearing, however, given the long term consequences of Europe struggling with a currency regime that makes little sense.

Essentially, Athens would exchange drachmas for euros in circulation among its inhabitants, remark private debts and bank accounts to drachma, and until conditions stabilized, limit withdrawals at Greek banks and capital outflows.

As the drachma fell in value, Greek exports would increase, reducing unemployment. consumers and businesses, with their debt re-denominated into a cheaper currency, would enjoy a windfall and spend more. All would help lift the Greek economy out of crisis, but this can only happen if Germany and other European governments cooperate.

(Excerpt) Read more at foxnews.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: greece; recession; usa
Just some more salt in the wound.
1 posted on 05/25/2012 1:57:42 PM PDT by SteelToe
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To: SteelToe

Well it is good to know that we are NOT in a recession right now.


2 posted on 05/25/2012 2:05:09 PM PDT by VRW Conspirator (Article 58)
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To: SteelToe
If Greece leaves the euro, the U.S. economy could easily slip into recession.

Yes, it could damage the "booming" US economy. /sarc

3 posted on 05/25/2012 2:06:39 PM PDT by Cowboy Bob (Greed + Envy = Liberalism)
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To: bruinbirdman

Submitted for your perusal.


4 posted on 05/25/2012 2:06:56 PM PDT by Army Air Corps (Four Fried Chickens and a Coke)
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To: SteelToe

The euro was a bad idea with the best intentions, and now the sensible course for all involved is to cut losses and return to the sanity of national currencies
..........................................................
I don’t agree.

The Euro was a bad idea, it was started to ruin the dollar in the world market, It certainly started to do that up until countries started getting eaten up by debt.

Our own debt is going to put us in a deeper recession sooner or later anyway, We are already in recession , it never ended. All talk by Obama of our coming back from recession was and is BS.


5 posted on 05/25/2012 2:06:56 PM PDT by Venturer
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To: SteelToe
Greek exit from euro could plunge US into recession

After 0bama, Reid, and Pelosi could it even be a noticeable negative change?

6 posted on 05/25/2012 2:06:58 PM PDT by EGPWS (Trust in God, question everyone else)
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To: VRW Conspirator
Well it is good to know that we are NOT in a recession right now.

It's an election year with a dimocrat incumbent for POTUS, we CAN'T be in a recession even if we are!

7 posted on 05/25/2012 2:11:03 PM PDT by EGPWS (Trust in God, question everyone else)
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To: SteelToe

Sounds like the start of World War I

If a place as insignificant as Greece (or Serbia in 1914) can set off events that will turn the US and the world economy on its head, then the system is loaded and primed for explosion anyway. Doesn’t matter what the spark is.


8 posted on 05/25/2012 2:11:31 PM PDT by PGR88
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To: SteelToe
The sooner countries suffer the consequences for bad economic policies the sooner they will be on the road to economic recovery...including the US. Continuing to drink a shot of bourbon in the morning to delay a hangover is not the answer.
9 posted on 05/25/2012 2:11:33 PM PDT by Huskrrrr ( the will)
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To: PGR88

Kinda reminds me of the trailer of a Doctor Who episode called, “The End Of Time.”
http://www.youtube.com/watch?v=RcnOtoCTqmo
http://www.youtube.com/watch?v=wT4vieVh4d8
http://www.youtube.com/watch?v=NFoCQSis9uU


10 posted on 05/25/2012 2:16:06 PM PDT by Jack Hydrazine (It's the end of the world as we know it and I feel fine!)
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To: SteelToe
Expect the Obamacrats to use this for cover. One way, or another, the dominoes (or cards — whichever metaphor you prefer) are going to start tumbling in Europe. Soon. That will provide a ready-made excuse for the miserable record of Obamanomics.
11 posted on 05/25/2012 2:18:00 PM PDT by USFRIENDINVICTORIA
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To: SteelToe

Or not. But I’m sure that Obama will try to blame it on Greece.


12 posted on 05/25/2012 2:18:39 PM PDT by Brilliant
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To: SteelToe

If Greece exited the Euro, no one in North America would notice if it weren’t reported in the press.


13 posted on 05/25/2012 2:26:22 PM PDT by John Valentine (Deep in the Heart of Texas)
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To: John Valentine

If Greece exited the Euro, no one in North America would notice if it weren’t reported in the press.
**********************************************
We’ll notice it... their counterparties will demand a bailout , we are already THE source of funds for Europe anyway ... this will be yet another QE and we will see it (at the least) in inflation.


14 posted on 05/25/2012 2:45:21 PM PDT by Neidermeyer
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To: VRW Conspirator

“Well it is good to know that we are NOT in a recession right now.”

Darn. Just when I was starting to sit back and roll in it!


15 posted on 05/25/2012 3:05:09 PM PDT by The Antiyuppie ("When small men cast long shadows, then it is very late in the day.")
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To: SteelToe
Greek exit from euro could plunge US into DEEPER recession

there fixed it...

16 posted on 05/25/2012 3:05:36 PM PDT by Chode (American Hedonist - *DTOM* -ww- NO Pity for the LAZY)
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To: SteelToe
consumers and businesses, with their debt re-denominated into a cheaper currency, would enjoy a windfall and spend more.

Spend more on what? Olive oil? What other consumer goods does Greece manufacture? Imports would double in price -- the Greeks might spend more, but they'd get a heck of lot less for their money.

Devaluations only benefit governments. They are the ultimate inflation.

17 posted on 05/25/2012 3:21:49 PM PDT by BfloGuy (The final outcome of the credit expansion is general impoverishment.)
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To: SteelToe

I wish that some bright individual would suggest that the way out of the pit for Greece is to use the old German

Papiermark -> Rentenmark -> Reichsmark technique.

Their fiat currency Papiermark was a hyperinflated disaster, so to move to a new, stable currency, they created an intermediate buffer currency, the Rentenmark. It was just used by banks and governments, and was backed by gold, so was extremely stable.

Once it was working at a high level, then the Reichsmark, backed by Rentenmarks, was introduced. It could not inflate, and remained stable through WWII.

In Greece’s case, when the Drachma goes to heck, the European Central Bank should introduce an intermediate stable currency, for example called the “Greco”. To leave Greece, Drachmas would have to be converted to Grecos, then converted from Grecos to Euros, all carefully managed by the ECB.

Anything Greece exported would be bought by the ECB and resold at a markup to other nations, with the markup going to reduce the Greek debt. And commodities the EU had in excess could be sold to the Greeks at a deep discount.

This would do much to strengthen the Drachma, with the goal of it eventually becoming directly convertible to Euros.


18 posted on 05/25/2012 4:14:08 PM PDT by yefragetuwrabrumuy
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To: SteelToe
Greek exit from euro could plunge US into recession

Good grief...obama's been screwing the pooch on the economy for over 3 years now. We're knee deep in a depression and the media can't hide the fact.

So now they're saying it could get worse?!? Why? greek exports? Yeah, a sea of olive oil is going to break us even further....more likely because obama will bail them out I'm thinking...

@#*$& all socialists.

19 posted on 05/25/2012 4:28:03 PM PDT by Caipirabob (I say we take off and Newt the site from orbit. It's the only way to be sure...)
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To: SteelToe

Silver lining: The US economy may roar back as Europe inevitabley plunges into another of their cyclic genocidal wars.


20 posted on 05/25/2012 4:57:24 PM PDT by MrEdd (Heck? Geewhiz Cripes, thats the place where people who don't believe in Gosh think they aint going.)
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To: USFRIENDINVICTORIA
Expect the Obamacrats to use this for cover. . . That will provide a ready-made excuse for the miserable record of Obamanomics.

That's it in a nutshell. They'll have somebody else to blame for the coming Big One. I half suspect they are working for that excuse right now while assuring the Euros they will be helped. The "crisis going to waste" thingy.

21 posted on 05/25/2012 5:06:04 PM PDT by Oatka (This is America. Assimilate or evaporate.)
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To: SteelToe
Marc Faber (100%) Guarantees A Global Recession
22 posted on 05/25/2012 5:12:06 PM PDT by blam
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To: SteelToe

how do we allow ourselves to get so tightly entwined in another country’s economy that it causes our downfall??

those reponsible, even though they may be one of us, should be charged with treason - maybe a stretch but....


23 posted on 05/25/2012 5:12:06 PM PDT by elpadre (AfganistaMr Obama said the goal was to "disrupt, dismantle and defeat al-hereQaeda" and its allies.)
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To: SteelToe
Marc Faber (100%) Guarantees A Global Recession
24 posted on 05/25/2012 5:12:22 PM PDT by blam
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To: Army Air Corps
Greek exit from euro could Reelection of Obama will plunge US into recession.

yitbos

25 posted on 05/25/2012 5:25:58 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: bruinbirdman

Spot on, good sir.


26 posted on 05/25/2012 5:46:43 PM PDT by Army Air Corps (Four Fried Chickens and a Coke)
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To: Army Air Corps
The Greek exit hypothetical is understated.

However, because of the dire consequences of a Greek exit, EU will stall until after the Greek and French parliamentary elections.

Eventually, IMO, EU will compromise with Greece.

A Greek exit from the euro would lead to a collapse of the single currency.

Who would invest in any euro sovereign debt if it could be defaulted at a whim?

yitbos

27 posted on 05/25/2012 5:57:40 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: bruinbirdman
I quite agree. The pols in Greece and France shall attempt to stanch the wound until the votes are cast. Cynical and self-serving, to be sure; a classic manoeuver for careerist politicians, no? It is a given that Greece will depart the Euro this year, but the question is when the curtain will fall on this particular play.
28 posted on 05/25/2012 6:04:58 PM PDT by Army Air Corps (Four Fried Chickens and a Coke)
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To: Army Air Corps
"It is a given that Greece will depart the Euro this year, but . . ."

Not in my book. The EUSSR still has plenty of ammo. Before Greece leaves, ECB will issue eurobonds. JMO.

The eurosocialists have not reached the end of the can kicking road, though the cul-de-sac is visible.

yitbos

29 posted on 05/25/2012 7:14:23 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: bruinbirdman

So, you think that they will continue to feed cash to Greece? Eventually, the “donors” are going to reach a breaking point.


30 posted on 05/25/2012 7:20:44 PM PDT by Army Air Corps (Four Fried Chickens and a Coke)
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To: SteelToe; All

Salve

Absolute nonsense. And I do mean that nonsense!!!!!

Economic situation in Europe were dire long before 2008, nobody wanted to talk about it, now it is on as if Greece is destroying Eurozone, idiocy at its best.

Greece was never a strong in EU, it was always the poorest economy in there, only reason Greece was even allowed in EU was of political reasons, and besides, Greece strongest assets were besides tourism, their food exports.

It is France and Deutschland that need to be look at, as well American Banking Institutions, like Goldman Sachs, remember folks, its all business, it is easy to put a person under the bus and pretend you are safe.

Now big doo dooo hits blading fan and people are looking for scape goats, this is nothing else but screw up what in the flue deals.

Merci.


31 posted on 05/25/2012 7:26:34 PM PDT by MCSP2008 (Romanian native > ESL)
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To: bruinbirdman

I have some news for you, sir. The Greeks have already defaulted on their Eruo based sovereign debt.


32 posted on 05/25/2012 7:30:00 PM PDT by Lurker (Violence is rarely the answer. But when it is it is the only answer.)
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To: Army Air Corps
"So, you think that they will continue to feed cash to Greece? Eventually, the “donors” are going to reach a breaking point."

After the elections, Greece and EU will sit down and work out a compromise. Call it face saving.

This, of course, fixes nothing. Greece will get some money already promised.

That does not fix Spain, Italy, or France. For them, Euro Bonds (printing money).

yitbos

33 posted on 05/25/2012 7:43:42 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: Lurker
"I have some news for you, sir. The Greeks have already defaulted on their Eruo based sovereign debt."

Not news. But EZ still has a pot of euros for Grease when they do a little jawboning after the election.

EZ can't let Grease leave.

EZ is still doomed, just not yet.

yitbos

34 posted on 05/25/2012 7:50:18 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: bruinbirdman

Permit me to state the obvious:
That is bloody unsustainable and when the bill comes due, it will be damned painful.


35 posted on 05/25/2012 7:54:14 PM PDT by Army Air Corps (Four Fried Chickens and a Coke)
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To: bruinbirdman

What do you suppose will happen whe the bond market figures out, if they haven’t already, that these bonds are no more “safe” than the Euro denominated Greek bonds they already got shafted on?

Bond traders aren’t stupid, after all.


36 posted on 05/25/2012 8:04:00 PM PDT by Lurker (Violence is rarely the answer. But when it is it is the only answer.)
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To: Lurker
"Bond traders aren’t stupid, after all."

As usual, where there is a market, the big boys will make out like bandits. They can't wait.

yitbos

37 posted on 05/25/2012 8:22:21 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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