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 ...
No worries, the Saudis and UAE sheiks will bail out the EU
(for a minor price, of course, like their submission to Allah).
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.
Yes the real problem with this PIGGS exit is triggering a cascade of credit default swaps going belly up. That cannot be honored.
The big banks are gone once that happens. They’ve never been required to mark them to market.
Would you be okay with the USA selling off pieces of its states to China to pay off our debts?
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Of course, captialism does that anyhow. And Greece and its creditors all belong to the same happy family.
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.
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. :(
“Extend and pretend” I know you have heard that before.
Since when does capitalism trade sovereignty for money?
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
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.
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