Thursday, February 18, 2010
Domino theory- Assessing the risk that Greece’s woes herald something far worse
I thought this was an interesting read given our talk on hyperinflation and the relation to Greece. Investors' concerns are growing more and more as Greece seems to fall further into debt by the second. The concern is not only for Greek industries but also, speculators are worried that the severe recession in Greece could spread through the rest of Europe and eventually make its way to the US. The article goes on to explain the various ways this could occur and also the problems that are associated with Greece's economic problems.
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Many articles over the last week have identified how fellow European nations have assisted Greece with their enormous debt however I wonder whether it maybe more beneficial for the Greek's to default on their debt and revert to their former currency. This way, the EU will have the opportunity to recover from Greece's economic woes while Greece would then have the monetary and fiscal policy tools to control their economy.
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