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Money Matters: Greece & China Start A Global Rumbling
Things sure are getting interesting in the Chinese curse sense of the word! For those of you not plugged into the serious news, it appears the economy has started to get the shakes.
To begin with– Greece. A country so far in debt it will never be able to pay it back, even with very low interest. Their only real choice– eventually– is to default and declare that, hey– guess what? Screw their credit rating (which already stinks) and good-bye to the Euro! They're calling it quits! In fact, there was a vote by the people that made clear they are done with more austerity and cut backs to satisfy creditors who took a big risk by bailing them out several times already. They've been playing along with the European Union (mainly run by Germany, let's get real here) to this point, but its becoming increasingly clear there is no end to the suffering with the way things are set up now. Time to ditch!
And who can blame them? Well, plenty of investors across the world and governments who sent aid and the IMF with its loans and so forth. And yes, they were frivolous and didn't take in enough taxes and the Greek government spent like mad just like we do– they just don't have the power to print or create money out of electronic ether like the U.S. Government does, so they had to face reality much sooner.
Apparently, many across the world are rather perturbed and a little outraged that they didn't keep playing the game that others set up for them and so– there's some reaction there. Things are still not quite decided– but it looks like Greece is getting ready to default, even if that means walking away from the E.U. Whoa! This means the E.U. will be viewed as something of a failure and could begin a chain reaction of other countries walking away.
Meanwhile, in China, their stock market, which was over-valued (a way of saying in a bubble) has been facing the popping of said bubble to the tune of losing a full third of their stock market value. I've been wondering when that one would pop for over 2 years, quite frankly. I'm still not sure what jolted that economy into a sudden facing of dark realities, but that economic news has been rattling nerves around the world as well.
Remember, we're in an “extend & pretend” economy. Our economy never really recovered– its been on life-support from ZIRP (zero interest rate policy) and lots of fudging the numbers and cheerleading by our government and several others. Once the veil is taken off, what's underneath may cause some really volatile reactions across the board. I'm frankly astonished its worked this long. Several fringe types, who called the last recession/crash before 2008 called the next one for this summer or fall.
It appears they may just be right.
Source: http://lucretiasheart.livejournal.com/1145881.html
