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by Hellsangel Thu Jun 16, 2011 9:18 am

Let us hear from you what happens once Greece defaults on its debt.

by Propagandhi711 Thu Jun 16, 2011 9:47 am

he covered this in his biweekly radio show titled "pestilence and drought will fall upon you and your neighbors will steal your first born child to eat"

by harharmahadev Thu Jun 16, 2011 10:01 am

Hellsangel wrote:Let us hear from you what happens once Greece defaults on its debt.

If EU defaults, it will trigger a credit event, which will, most likely, have a Lehman-type effect. It is definitely going to have a deflationary impact, which means lower stock prices. There will be a liquidity crisis and typically, USD does well during such times.

However, if central banks come together to pull out another rabbit out of the hat and bail out Greece, then the stock markets might go up. Gold will definitely shoot up to $1700+ or more. (If they don't, gold might fall to $1200s...however, gold price will precede the market action.)

This is a dangerous game (as in game theory). If EU central bank bails out Greece, the rest of the beggar nations (Portugal, Spain, Italy, etc) will jump on top of each other to get in line for aid, because they know they would be competing for limited resources. None of these countries want to be first because it's a prestige issue, but really don't want to be last in line either. It's human psychology, if you think about it carefully. You may not have the guts to go to your boss and ask for a 10% raise. But if you found out that your co-worker did it and got one, it's very likely that you would barge into your boss's office right away!

If EU doesn't bail out Greece, Greece might opt out of EU or default. If Greece opts out of EU (very likely), then Euro currency will shoot through the roof! Stock markets might still go thru a Lehman-style deflation.

Long story short - we are living in dangerous times, where one wrong move could cost you dearly. This is not your run-of-the-mill crisis. If you know what you are doing (or incredibly lucky), you could make a fortune. If you don't, you are much better off just playing it safe and sticking to cash (USD) for the short term.

by harharmahadev Thu Jun 16, 2011 10:45 am

A good article on the Greek crisis:

http://blogs.reuters.com/mohamed-el-erian/2011/06/06/europe-struggles-with-bad-choices/

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