Perfect Financial Storm Shaping Up for Europe, U.S.
Written By: Charles Scaliger | Posted: Friday, June 10th, 2011
The walls are closing in on the eurozone, as options for resolving the European debt crisis are about to narrow dramatically. After many months of drama and handwringing, the sovereign debt bailout express is about to run off the rails, leaving the European central bank, and probably a number of megabanks across Europe, in financial ruins, and most likely spelling the demise of the euro and of the entire eurozone experiment.
We are back to Greece, the little economy whose collapse set the European crisis in motion. As we warned at the time, the original Greek bailout and accompanying sigh of collective relief from the world financial markets would do little besides postpone the evil day. Now, little more than a year later, with Greece staring at obligations next month of $13.4 billion which it cannot afford to pay (and which, judging from the understandably truculent mood of the Greek people, who are in no mood for austerities imposed by foreign bankers, it is unwilling to pay) without another bailout, Europe is on the brink of a financial abyss. It is unlikely that the rest of Europe will be willing to continue paying to keep the Greek economy on life support, and equally unlikely that Greece will submit to further austerities, as her financial overlords are pressing her to do. The unavoidable result, in the very near-term future, will be a default of some kind - doubtless dressed up as some kind of debt restructuring, but a default nonetheless. As economist Andrew Lilico, writing for the Telegraph on May 25, put it:
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