Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Study: Greek euro-exit could start €17-trillion “wildfire”
EU Observer ^ | 18.10.12 @ 09:24 (October 18) | Andrew Rettman

Posted on 10/19/2012 7:28:05 PM PDT by Olog-hai

The nightmare scenario of Greece, Italy, Portugal and Spain leaving the euro could cost the world economy €17 trillion ($22 trillion), a new study says.

The figure—totted up by German consultancy Prognos for the Berlin-based Bertelsmann foundation—would amount to "a lengthy worldwide recession" stretching from the US to China and to "major strains on the social fabric and political stability" in the euro-departing countries.

The study admits the consequences of a Greek exit—until recently mooted as a real option by top German policymakers—are a "mystery." But it notes that a "domino" effect in which "capital market speculation and other untoward responses … provoke sovereign default on the part of Portugal, Spain and ultimately Italy" is possible. …

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


TOPICS: Business/Economy; Crime/Corruption; Culture/Society; Foreign Affairs
KEYWORDS: eurobanking; euroexit; eussr; greece
Oh yes, Bertelsmann, the biggest propaganda-maker for Adolf during WWII, back to scaremongering.
1 posted on 10/19/2012 7:28:17 PM PDT by Olog-hai
[ Post Reply | Private Reply | View Replies]

To: Olog-hai
$22 trillion would be major headache, no doubt about it.
2 posted on 10/19/2012 7:30:42 PM PDT by hinckley buzzard
[ Post Reply | Private Reply | To 1 | View Replies]

To: hinckley buzzard

How would their exit cost $22 Trillion, is there that much funny money in the system?


3 posted on 10/19/2012 7:42:55 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Olog-hai
The nightmare scenario of Greece, Italy, Portugal and Spain leaving the euro could cost the world economy €17 trillion ($22 trillion), a new study says.

Why should it "cost the world economy" anything if several European countries were to leave the EuroZone? Or even if the EuroZone were to go out of existence altogether, forcing a return to the status quo ante in Europe?

I confess that I just don't get it...

4 posted on 10/19/2012 7:43:37 PM PDT by AmericanExceptionalist (Democrats believe in discussing the full spectrum of ideas, all the way from far left to center-left)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Olog-hai

I say its unavoidable. The global economy is a house of cards and debts which cannot be repaid. The collapse is inevitable, so you might as well “bring it”.


5 posted on 10/19/2012 7:44:43 PM PDT by ClearCase_guy (Global Warming is a religion, and I don't want to be taxed to pay for a faith that is not mine.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Olog-hai
I hear people here asking "why" and doubting that calamity could take place.

Methinks they are too invested in their stocks and 401Ks to REALLY believe it could all collapse........so they attack the message.

6 posted on 10/19/2012 7:46:45 PM PDT by SkyPilot
[ Post Reply | Private Reply | To 1 | View Replies]

To: Olog-hai

I dont understand, I am told that Greece has oil and nautural resources that can be sold, even islands. Why are not these issues being considered/


7 posted on 10/19/2012 7:57:54 PM PDT by Chickensoup (STOP The Great O-ppression)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Olog-hai

Which would be answered by the demands for a more centralized Europe, which is their answer to everything


8 posted on 10/19/2012 8:03:02 PM PDT by GeronL (http://asspos.blogspot.com)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ClearCase_guy

22 trillion dollars... can that really be any worse than the money being bled right now as they continue to prop up this failed project? End it all. Shut down the EU, burn the flag, burn the Euros, put its bureaucrats on trial for treason and forget this whole mess.

Greece will be fine. It’s not like they haven’t gone through worse during their long, illustrious history.


9 posted on 10/19/2012 8:03:42 PM PDT by Viennacon
[ Post Reply | Private Reply | To 5 | View Replies]

To: Chickensoup

Would you be okay with the USA selling off pieces of its states to China to pay off our debts?


10 posted on 10/19/2012 8:06:14 PM PDT by Olog-hai
[ Post Reply | Private Reply | To 7 | View Replies]

To: AmericanExceptionalist

Like I said: it’s scaremongering. Take note that the answer to this problem is the same answer that the eurocrats give to everything: “More Europe”, IOW more centralization and essentially the destruction of the nation-state (save one).


11 posted on 10/19/2012 8:08:42 PM PDT by Olog-hai
[ Post Reply | Private Reply | To 4 | View Replies]

To: Olog-hai
So...Europe is supporting Greece and the others b/c they are insolvent. Supporting them with money that will never be repaid. So...if the countries leave the euro zone the remaining countries losses stop. How is that a loss again?
12 posted on 10/19/2012 8:21:37 PM PDT by Nuc 1.1 (Nuc 1 Liberals aren't Patriots. Remember 1789!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Nuc 1.1

Better ask the Eurocrats. They are the ones who want to keep all these countries in, due to their fanaticism over a “united Europe”.


13 posted on 10/19/2012 8:30:46 PM PDT by Olog-hai
[ Post Reply | Private Reply | To 12 | View Replies]

To: Nuc 1.1
So...if the countries leave the euro zone the remaining countries losses stop. How is that a loss again?

It's an over-simplification, buy let's say Greece, et al, are EU 17 trillion in debt -- with their bonds held by banks and other country's treasuries.

If they default on that debt en masse, then EU 17 trillion in assets have just disappeared from those banks and treasuries.

By virtue of the default many of those banks will become insolvent, resulting in even greater losses.

Granted, the casee probably is that Greece et al will probably never be able to support the interest payments on those bonds or, heaven forfend, actually redeem them. So, default is a liklihood sooner or later, anyway. But, in the meantime, maintaining the fiction keeps EU 17 trillion in bonds in the asset column.

14 posted on 10/19/2012 8:43:09 PM PDT by okie01 (THE MAINSTREAM MEDIA; Ignorance on parade.)
[ Post Reply | Private Reply | To 12 | View Replies]

To: okie01
Ah. I did not consider their debts performing since they are borrowing money from their lenders to pay them back. However I see your point. Thanks for the info.
15 posted on 10/19/2012 8:55:24 PM PDT by Nuc 1.1 (Nuc 1 Liberals aren't Patriots. Remember 1789!)
[ Post Reply | Private Reply | To 14 | View Replies]

To: okie01
They shouldn't have to default, though. The payback terms are too draconian, and they include giving up their sovereignty anyhow as part of those terms.
16 posted on 10/19/2012 9:35:01 PM PDT by Olog-hai
[ Post Reply | Private Reply | To 14 | View Replies]

To: Olog-hai

The socialists simply cannot seem to get it through their heads that they have run out of other people’s money.


17 posted on 10/19/2012 9:38:38 PM PDT by Lancey Howard
[ Post Reply | Private Reply | To 1 | View Replies]

To: Lancey Howard

That happened a long time ago. But the euro was designed to create a crisis, so they could come charging in with some ready-made “solution” to save the day (which they have not yet revealed).


18 posted on 10/19/2012 9:40:41 PM PDT by Olog-hai
[ Post Reply | Private Reply | To 17 | View Replies]

To: Olog-hai

PIGS should leave these UNaccountable Eurocrats, declare their independence, and set up as constitutionally limited republics renouncing socialism and triumphing individual rights. They could borrow our constitution. We’re not using it.


19 posted on 10/19/2012 9:56:54 PM PDT by PGalt
[ Post Reply | Private Reply | To 1 | View Replies]

To: Olog-hai

That will happen anyway, by hook or by crook, unless the US starts
to get on a serious energy-independence track. Chicoms are investing in Alberta oil sands companies and in several other projects.


20 posted on 10/19/2012 10:44:07 PM PDT by rfp1234
[ Post Reply | Private Reply | To 10 | View Replies]

To: Olog-hai

No worries, the Saudis and UAE sheiks will bail out the EU
(for a minor price, of course, like their submission to Allah).


21 posted on 10/19/2012 10:46:50 PM PDT by rfp1234
[ Post Reply | Private Reply | To 1 | View Replies]

To: driftdiver

Some figures put credit default swaps (derivatives) around a quadrillion dollars. Yeah, they’ve been piled higher and deeper. Tens of trillions is chump change in comparision. For reference our GDP is under 20 trillion.


22 posted on 10/20/2012 10:44:17 AM PDT by meatloaf (Support Senate S 1863 & House Bill 1380 to eliminate oil slavery.)
[ Post Reply | Private Reply | To 3 | View Replies]

To: meatloaf

Yes the real problem with this PIGGS exit is triggering a cascade of credit default swaps going belly up. That cannot be honored.


23 posted on 10/20/2012 10:56:06 AM PDT by dennisw (Government be yo mamma - Re-elect Barack Obama)
[ Post Reply | Private Reply | To 22 | View Replies]

To: dennisw

The big banks are gone once that happens. They’ve never been required to mark them to market.


24 posted on 10/20/2012 12:34:50 PM PDT by meatloaf (Support Senate S 1863 & House Bill 1380 to eliminate oil slavery.)
[ Post Reply | Private Reply | To 23 | View Replies]

To: Olog-hai

Would you be okay with the USA selling off pieces of its states to China to pay off our debts?

___________________________

Of course, captialism does that anyhow. And Greece and its creditors all belong to the same happy family.


25 posted on 10/20/2012 1:39:39 PM PDT by Chickensoup (STOP The Great O-ppression)
[ Post Reply | Private Reply | To 10 | View Replies]

To: AmericanExceptionalist
Why should it "cost the world economy" anything if several European countries were to leave the EuroZone?

The money is already lost - the departure of these countries from the EuroZone would force the remaining members to admit it. Major banks all over the world would be rendered insolvent overnight.

It's sort of like the way US banks are still pretending all the real estate they hold is still worth something close to its 2006 value.

26 posted on 10/20/2012 1:48:22 PM PDT by Mr. Jeeves (CTRL-GALT-DELETE)
[ Post Reply | Private Reply | To 4 | View Replies]

To: Olog-hai
Would you be okay with the USA selling off pieces of its states to China to pay off our debts?

I have a feeling Federal lands have already been pledged as collateral - the Chinese don't need to take title until and unless the US actually defaults. We'll wake up one day to read that China will be commencing mining and drilling operations on those National Monument lands previously barred to US operators - with all products labeled for export only. :(

27 posted on 10/20/2012 1:55:54 PM PDT by Mr. Jeeves (CTRL-GALT-DELETE)
[ Post Reply | Private Reply | To 10 | View Replies]

To: Mr. Jeeves

“Extend and pretend” I know you have heard that before.


28 posted on 10/20/2012 2:57:53 PM PDT by dennisw (Government be yo mamma - Re-elect Barack Obama)
[ Post Reply | Private Reply | To 26 | View Replies]

To: Chickensoup

Since when does capitalism trade sovereignty for money?


29 posted on 10/20/2012 3:00:30 PM PDT by Olog-hai
[ Post Reply | Private Reply | To 25 | View Replies]

To: Mr. Jeeves
I have a feeling Federal lands have already been pledged as collateral - the Chinese don't need to take title until.......

The traitorous scum in DC have not gone so far yet but I can easily see sometime in the future the Chinese being given title like you say. They will be like Indian reservations, sovereign nations where they can do as they please as far as drilling and mining

But the real news these days is the Chinese not being our bankers (they are selling off a bit US Treasuries each year are not net buyers) but the Federal Reserve bank buying heavily and projected to hold 5 trillion in US Treasuries by 2015

The Federal Reserve being a private bank controlled by our largest bankers who hold stock in it (such as Citi, JPMorgan, Goldman Sachs, Wells Fargo) whose interests do not coincide with the interests of American citizens

30 posted on 10/20/2012 3:08:43 PM PDT by dennisw (Government be yo mamma - Re-elect Barack Obama)
[ Post Reply | Private Reply | To 27 | View Replies]

To: Olog-hai

Volatility and crashes are the only thing that keep the use (or misuse) of leverage from dangerously concentrating power. Collapses are good, and the world desperately needs one. The assh*les who are leveraged to the moon will be obliterated. And that’s good.


31 posted on 10/20/2012 3:13:18 PM PDT by wolfman
[ Post Reply | Private Reply | To 1 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson