Will The U.S. Be The Next Greece

Posted: Feb 14, 2012 |Comments: 0 |

That really is a great question, and something hot on the lips of many analysts at the moment.

Only days ago, Greece has released measured to cut salaries, jobs and living conditions of it citizens. It is something we were warning several months ago. Can you blame the people who started causing troubles and riots in the streets.

Looking at what has been happening over in Greece, and the current national debt in the U.S.  It is not hard to see that the ticking time bomb is getting louder and louder.

It amazes me that there are still people asleep to what is going on out there, but it seems that because people are not rioting on the streets of the US, so the average person chooses to think the economy must be recovering.

Right now you have many people in a FALSE SENSE OF SECURITY. It is like taking a poisonous pill not and not realizing the damage until it is too late. There is likely going to be this ‘eye before the storm' feeling out there in the real world. But soon you will start to see the real effects and the interest rates begin to reflect the debt burden.

The government have chosen to tame deficits with a new budget for the next 24 months. However, they do not realize it will not cure the entire debt crisis, and other problems like an aging population, the Medicare system and also Social Security.

The real risk right now lies in the borrowing costs, the interest rate the U.S. pays on current debt levels. The smearing and cheap tricks the U.S. Government is using right now to cover up the real problems is going to implode and they have been covering up the truth since 2008.

You may hear stories about the U.S. being a safe haven right now. While that may be true in the very short term, many people are forgetting the bigger picture and Bernanke's goal to devalue the dollar, which is going swimmingly so far.

Fortunately the U.S. is not in the same boat as Greece right now, but high borrowing costs will most likely push the U.S. debt levels from bad to WORSE! If this happens, and there is no doubt that it will eventually, do you think people will get mad? do you think more jobs will be lost? Do you think many people will take to the streets and show their frustrations?  The answer to those questions are simple.

The government will continue to cut spending and take more money away from people who need it, and continue to lie and cover up the truth. It did not work for them in 2007 -08 period, and it will not work for them going into 2012 either.

We could sit here and go over figures and compare apples to oranges on how the current debt problems are the same as what is happening Greece, but both of these countries have very complex problems that will not go away anytime soon.

The domino's are falling, and there is nothing anyone can do. The only option left is to prepare as best you can, as the storm starts to build and heads your way.Do not be fooled by the lies of the government and media. Every time they talk their lips are moving. You should know their games by now, especially if you have been reading our work and our newsletters over the last several months.

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Greece To Adopt Austerity Measures

ByCedric Welsch

Greece has been facing this dilemma for quite long now and finally it has decided to go down the difficult road. The makings of the Greek debt crisis are beset in the politico-economic system that evolved over the times, including an overly invested public sector and a win-win nexus between the political leadership and trade unions. While this arrangement may have supported the political leadership, over a period of time, it seems to have disrupted public finances and forex industry that landed Greece into the crisis it faces today. The public sector in Greece accounts for nearly 40% of the nation's GDP, something that is built on public investment and usually lags in providing reasonable returns on investment unlike the private sector, with focus on profitability. The result of this populist politico-economic model was a trebling of public debt as a percentage of the nation's GDP from 28% in 1980 to 89% in 1990.

Having reached the point where the debt situation is that of a crisis, Greece is left with no option to borrow further from other nations, which it needs to do in a way that it has the capacity to pay it back. To do so, Greece needs to get its financial house and fx trading market in order and undertake effective austerity measures to make its finances manageable and sustainable in the long run. This implies hardship for its people and has led to nationwide protests, which later turned violent. Amidst the protests and violence, the Greek parliament passed a bill announcing further austerity measures as required for the next tranche of funding outlined by Troika comprised of European nations, the International Monetary Fund and the European central Bank. Many thousands of Greeks demonstrated outside the parliament even as the lawmakers debated on the new austerity measures. Even as one of the protestors died, the lawmakers approved the austerity bill by 154 in favor to 144 against it. The new bill is likely to result in job cuts by about 30,000 and reduction in wages and pensions of public sector workers. As per a report by the Troika, Greece was on the verge of bankruptcy and desperately required its sixth bailout package of eight billion Euros in order to avoid bankruptcy.

The Troika report, which was not endorsed by the IMF suggesting that there could be some differences within the group, stated that Greece was in troubled waters with its debt dynamics in a worrying situation. As per the report, most of economic indicators for the nation are in the red except for exports, which grew at 20%. Overall, the nation's GDP is expected to contract by 5.5% in 2011, a disheartening development and putting the Greeks into a further distressful situation.

If the Greek situation is not addressed, the crisis could spread to Italy and Spain amongst other nations and put the Euro in jeopardy. The possibility of such an eventuality seems to forced European nations to spearhead another bailout package for Greece. But, quite clearly, after so many bailouts offered to Greece, unless the nation shapes up its own finances, even the others will not be able to save the nation.

Quit wasting your time with forex if you aren't making profits at all.

The business of currency trading is a game played only by those willing to learn.

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Email Address:SubscribeEconomics Article FeedFind More ArticlesSearchSimilar ArticlesProperty in Greece - Guide to Buying Property in GreeceMykonos - The Top Hot Destination For Your Greece HolidayTouring Remarkable GreeceMake Your Holidays in Greece Memorable One With Some of the Best IslandsGovernment Debt Causes Financial Crisis in GreeceGreece, The Land of OlympiaTravel Guide to GreeceEnjoy Your Holidays in Greece With Ancient History and Incredible CultureThe Myth of Ancient GreeceGreece and the Greek IslandsRecent ArticlesHow To Solve The Homeless SituationProgressivism Isn't Progress, VIIIHow Secure Is Your "Secure" Job?A True Comparison Of Increasing Debt Between Bush And Obama AdministrationsHow To Compete With ChinaWould Einstein Think Us Insane?What Will Happen If Greece Defaults?A Cluster of (Minor) ErrorsThe US Recovery Is Producing SurprisesA Sigh Of Relief For The Economic Status Of The USSubmitted On January 11, 2012. Viewed 10 times. Word count: 529.

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What Will Happen If Greece Defaults?

ByJon Safer

We all know that Greece can't pay it's debts and, as such, sooner or later it's going to have to default.

When it does, as many financial analysts say, the situation is going to be relatively similar to what happened in the United States in 1998.

Except much worse.

Before we move on, let's go back two steps and talk about what a default actually is.

Let's say you've taken a student loan that for some reason you just can't pay back. You're going to get your regular notices in the mail, maybe a few phone calls or emails, and if you're unable to make your payments for the period of 270 days, the loan is going to go into default.

The situation will then be reported to all of the credit bureaus in the United States, and it will become almost completely impossible for you to get another student loan (or any other kind of government student aid, for that matter, be it on the state or federal level.)

As a student, you're going to be almost completely grounded.

So, what will happen with Greece?

There are at least a few things worth mentioning.

First of all, its national debt will be restructured, in which case some of Greece's creditors will take massive losses. This, obviously, means that at least part of the principal debt or interest will never be paid back. When that restructuring is completed, Greece will most likely go into what's called restrictive default.

When that takes place, the European Central Bank will no longer accept Greek bonds as collateral to loan money to the local banks, and when that happens, there's a disaster in the making.

It is speculated that Greece has over one hundred billion Euros in bonds, but its banks will be pretty much immobilized as they won't be able to get the money they need to function.

So we're in for a crisis.

What's more, since it's very difficult to implement anything similar to the Troubled Assets Relief Program (which, by the way, was put in place by the U. S. to give the nation's banks money so that they could keep operating), we're looking at what many financial experts call every man to himself in Europe.

There's no central government which could institute TARP, or anything similar, in Europe, so unless the European Union or some other countries decide to get more involved financially than they are now, Greece, and even the whole continent, will never be the same again.

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Jon Safer

Email Address:SubscribeEconomics Article FeedFind More ArticlesSearchRecent ArticlesHow To Solve The Homeless SituationProgressivism Isn't Progress, VIIIHow Secure Is Your "Secure" Job?A True Comparison Of Increasing Debt Between Bush And Obama AdministrationsHow To Compete With ChinaWould Einstein Think Us Insane?A Cluster of (Minor) ErrorsThe US Recovery Is Producing SurprisesA Sigh Of Relief For The Economic Status Of The USHuman Nature, Capitalism, and Greed and Power DiscussedSubmitted On January 21, 2012. Viewed 10 times. Word count: 419.

MLA Style Citation:
Safer, Jon".".21 Jan. 2012EzineArticles.com.26 Jan. 2012 .APA Style Citation:
Safer, J. (2012, January 21). . Retrieved January 26, 2012, from http://ezinearticles.com/?What-­Will-­Happen-­If-­Greece-­Defaults?&id=6832734Chicago Style Citation:
Safer, Jon "." EzineArticles.com. http://ezinearticles.com/?What-­Will-­Happen-­If-­Greece-­Defaults?&id=6832734EzineArticles.com© 2012 EzineArticles.com
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