greek default

[malleefarmer]

Will a greek default and leaving the euro be the catastrophy everybody says or will the world finacial markets breathe a sigh of relief and say finaly then the world can get back into recovery mode.

Is lending them more and more money in bailouts just making it worse as they have to pay that back as well?

[liberty]

"Will a greek default and leaving the euro be the catastrophy everybody says or will the world finacial markets breathe a sigh of relief and say finaly then the world can get back into recovery mode."

The world is a long way from recovery mode. The road to recovery would mean significantly higher interest rates, massive bankruptcies of all sorts of financial institutions and slashing of government spending. There's little or no political appetite for that right now. The world is presently run by people who firmly believe that you can borrow your way into prosperity by "investing" in money-losing ventures. These strategies are only postponing the day of reckoning. The modern welfare state is beginning its inevitable collapse, as it should, because it was always unsustainable and always will be.

"Is lending them more and more money in bailouts just making it worse as they have to pay that back as well?"

Of course it makes things worse. Greece can't possibly repay the money it has already borrowed. Only a Keynesian would believe that this can be alleviated through more borrowing.

[hedgehog]

the greek bailout is to save the banks, not greece.

its no different to a farm that the banks overlent to.

the farmer is better to let it go and walk away, let the bank take the hit, rather than knock your pan in for another ten yrs and go bust anyway.

[TOM4CWB]

Hedgehog,

I agree the new loans were to refinance old bad bank loans.

There are way more issues here than many are admitting.

Lending 'easy money' in the past 7 years to buy expensive EU/German luxury goods... that many southern EU folks would have never bought without easy german money... is comming home to roost. Building Palaces with no one that can afford to live in them.

Cheers!!!

[monte]

What a mess....hard to let them default but when do you stop throwing good money after bad if they can't organize a government.