Posts Tagged ‘Drachma’

Crisis of Confidence

In Belgian, Capital Shortfall, Cataclysm, Cyprus, Cyprus Investment Promotion Agency (CIPA), Cyprus Securities and Exchange Commission (CySEC), default, Economic Institutions, Environment, European Union, Financing Reconstruction, FX, Global Economics, Hedge Fund, ICE Brent Crude oil, IKOS Financial, latin america, macroeconomic factors, MF Global, Multibillion, Nuclear, philanthropy, price volatility in energy, Proprietary, Regulatory demands, selective default, spillover effect, Turbulent Markets on November 3, 2011 at 3:59 pm

At this point it really doesn’t matter which way the crisis in Greece goes. The worlds confidence has fallen as bond markets have shown more alarm and the GIIPS have been forced a bailout. Government debt situations and the banking industry and heavily linked GLOBALLY, and more is likely to come (MF GLOBAL).
The fall in confidence has led to a convincing bailout but weaknesses in the Eurozone will still remain. Money is already fleeing the Eurozone, the dollar only an alternative. The Swiss Franc and the Yen are no-longer safe-havens because their central banks have intervened to artificially weaken those currencies.
Today the U.S. dollar is the only really liquid place for cash to go. Greece can get a bailout but she will weaken tomorrow.
The EU has no choice but to leave Greece bankrupt and in chaos. Modern Greece has not been much of a democracy in the last 60 years. Confidence is down. When they re-print the Drachma to pay bills, hyper inflation will be terrible, “contagion” is worse.


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