Financial markets close in turmoil as downgrades spread across Euro...

Standard & Poor’s swept the debt-ridden European continent with punishing credit downgrades Friday

“In our view, the policy initiatives taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the eurozone,” S&P said in a statement.

In a global economy, we area all effected by the financial woes of Europeans.

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 Most of the people who respond to those tactics are used to responding to fear anyway (especially when they vote).  The sad thing is, that when food and drinkable water become scarce, gold will be as useless as it is edible or potable.

Agreed.  I pay no more than 1.7% over spot price for silver bullion, and exactly spot for "junk" silver pre-1965 U.S. coins.  I'm not a survivalist type, but I do expect inflation to rear it's ugly head within the next year or two.  I've bought from and sold to Northwest Territorial Mint several times with good results.

One of my college classes this semester is International Politics.  I just wrote a paper on economic interdependence of nations/regions, addressing the effects economies have on each other.  Globalization has brought us all closer economically, for better or worse. 

European Crisis: Multiple Credit Downgrades, Greek Debt Talks Collapse

Greece’s creditor banks broke off talks after failing to agree with the government about how much money investors will lose by swapping their bonds, increasing the risk of the euro-area’s first sovereign default.

Germany and France have said that without a deal, Greece will not receive the next tranche of bailout funds. That almost certainly means a default.

... hedge funds hold a lot of Greek debt, and they may find a default even more lucrative, because they would stand to reap payouts from credit default swaps. So in the insanity of global finance, there are some entities practically rooting for default, regardless of the implications on the people of Europe.

Greece going into default sounds like a tipping point to me. This is bad news for the whole world.

For a historical perspective, 2,388 years of unpaid government debt

In fact, if we’re using the history books to name and shame, almost every nation on Earth, except a small clutch of Asian and Nordic countries — and Belgium — has at one time or another failed to honor its obligations.

In the past few centuries, defaults have cropped up with such casual frequency that the inability of governments to learn from the past would seem more comic than tragic, if it weren’t for the millions of livelihoods destroyed as a consequence.

Given the plethora of defaults, have we learned any lessons? And if we have, wouldn’t now be a good time to share them, especially since Greece’s current predicament threatens to cast the global economy ... into further turmoil?

History’s most obvious insight is that things are likely to get worse, and the collateral damage could be painful, according to Costa Vayenas, an emerging market analyst at investment bank UBS, who has researched back to the era when a dozen ancient Greek city-states defaulted on debts owed to a temple.

The first lesson from [the past] is, when you have sovereigns defaulting, you tend to have several defaulting at the same time,” he told GlobalPost.

“History shows us it is never just one country; the issue tends to be broader, more systemic. Many nations are involved — and when things go bad, they go bad for many.”


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