OK I’ll put on my Robe and Economist’s Hat and note we’ve got a nice article here on what happens if Greece leaves the euro – or gets kicked out. Basic result is it hurts, but also people pull money out of other troubled Euro countries, probably putting it into Germany. Most of this is due to one of Paul Krugman’s predictions, which people tend to listen to.
I’m feeling Krugman is actually too negative on how this could play out (it’s summarized at the article), but it’s still going to end badly for someone(s). The real question is how the pain is spread out and which politicians want to watch things go to hell on their watch. In short, I can see things being drawn out in the hope of a soft landing that pushes these possible scenareos out into the future, it’s just that the question of “can we kick people out of/do we leave the euro” is going to come up eventually.
This is made further complicate by the Greek political situation, which I have had trouble figuring out for years. I’m not exactly sympathetic to Greece’s situation, let’s put it that way, though I’m anti-Austerity.
What this means for us in the U.S. is that the world economy, at any time, could have some nasty shakeup as the Euro kicks people out, gets left, new austerity measures go into place, politics change, etc. I’m not sure what role the U.S. is taking, if any, to try and sort this mess out – it’d be very useful to do some digging.
So U.S. recovery aside and other hope, we’ve still got a big chunk of the world having economic problems. That, in short, could mess things up for everyone else, us included.
Oh, and Canada. Hey guys.