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Greece, since then I have in America and for years after, I tried, news, news about Greece on local and national newspapers in the United States. But not many years are able to do it, I realized that Greece is far too small – does not matter. This was, of course, to roll with 2010 a. .. change
It was now about two months ago that bombed my shocking surprise, we were with the news about Greece. Every day there are one or moreStories on the front page of The Wall Street Journal and other newspapers, all the analysis of the role of Greece in the European Union in particular and financial health of the world in general. I can not see pass his last days in Denmark and Germany, and one without, Greece may in the front, middle and back pages of the Financial Times and other newspapers in four languages I speak well written personally. So the question is: what Tiny Greece, one thing that makessuddenly at the center of the universe again? Do not get me wrong, I'm thrilled that Greece is a day in the news, but the question is why Greece has a role?
Greece is a small euro area economy, perhaps 2-3% of GDP, but what matters is the fact that Greece adopted the euro as their currency and the threat that Greece alone can send waves 'collision course in the financial community, for fear of a country to take account of other countries with similar problems with him.
The questionwas critical, when Greece announced that the budget deficit as a percentage of GDP, much higher than reported by the previous government, 12 or 13%, exactly, was well above the 3% required Union . Just look at comparable countries such as Portugal and Spain, also had very high budget deficits. Pigs, as they call it, ie, Portugal, ensure Italy, Greece and Spain for a very unstable economic group, which, if they can not fulfill their financial obligations to the communityputs considerable pressure on the euro, with familiar consequences. In fact, the € on a free fall almost disappeared overnight, to keep the dominant currency with the dollar exchange rate around 1.5 U.S. dollars, more than 5% of its value against the dollar to a minimum of eight months $ 1.3529, some analysts still expect two months and can up to $ 1.3 or less.
So, what can the U.S. learn from the powerful Greek children? It 'possible that the United States, racing, or eventhreaten huge deficits, such as the proposed plans to give social administration Obama would be equally disastrous economic situation would have a significant impact adversively and the dollar, compared to face-à-vis major currencies? Some people argue that this is because, unlike the EU countries, WHERE you really do not legally bound by a single government is possible, can the U.S. Legally and help mobilize financial resources that are in need of what the Unionquestioned. It is not the state budget that created the global chaos, but the federal budget deficit in the U.S., currently in the historical comparison that create serious risks, and in turn frightened investors – such as China to expand its research recently acquired enormous wealth into productive capital. You can already see that the U.S. current account deficit, even before Obama's proposals are adopted, they must be investors who already fearSearch for safer ports. China is building for a cause, its stocks to invest in gold instead of U.S. real estate capital.
budget deficit of a country to its obligations to its citizens and foreign investors to put pressure on their ability to borrow in open markets and, finally, to see the danger of its low-rated bonds. This is exactly what happened in Greece and what can happen in America, if not get their (White) house in order.
America has been using recently, extremeBehavior through internal capital spending huge financial rescue of the automotive industry and Wall Street on the premise that they were too big to fail. This was the wrong strategy in the long run to two effects: 1) these industries have no incentive to have committed their house in order and 2 set) of U.S. citizens in overall funding, this error always.
And 'interesting to see that Germany, the country that all the other economies than in Europe, decided that under no circumstanceshelp Greece out of trouble for the two reasons mentioned above. In the long term, and Greece to find their way out of this Greek tragedy and financial resources to improve its European partners. There is no such thing as "too big" or "too small" to the question of failure!
For the United States are hard times before. It would be a shame if Greece, where democracy has started, not to teach the world could be a lesson, and America is, where ended the democracy. To the shock of our children, I must be denied.
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