Posted: 4/8/2010 7:13:03 AM EDT
| What does that mean exactly to the United States and the banks here. Keep it dumbed down I would like the laymans version. I havent been following it but theres too much to try to absorb out there on Google. |
| I think just saying that nothing will happen if they default is rather misleading. Many banks and even governments hold Greek debt. There is the possibility of banks failing because of this. Not to mention that the other countries in similar situations will be seen as even bigger credit risks thus causing their costs to finance to increase possibly causing a cascade of failures. Who knows how much U.S. money is tied up in those countries? The plans they have come up with have been rather vague and apparently the EU does not want the IMF to get involved. There are also political implications for the stability of the euro and even the EU. Short term it could be a plus for the U.S. as we might be seen as a safe haven for all the money running from Europe. That would cause a rise in our stock market and an increase in the value of the dollar. However, that would be short term as we have our own problems to deal with. I of course could be wrong, but it's a possibility and a better answer than "nothing will come of it". But sure, nothing might happen if they default. However what is the likelihood of that in this new world of financial interdependence? |