Greece: What the Drama Doesn't Mean
It’s amazing how things change in 2,400 years. Back then, Greece was on top of the food chain. Now, they are rather close to the bottom. I wonder if any of them reminisce about the “Good Ole Days” as they wait in line for their daily euro’s ($67 worth) at the ATM. Probably not.
As we all know, on Sunday Greeks will go to the polls to vote on whether or not they will accept more bailout money in exchange for more government spending cuts and tax increases. Greece’s Prime Minister is urging his people to vote No. The rest of Europe is urging them to vote yes.
Regardless of whether they vote yes or no, it doesn’t necessarily mean that this drama will be over.
This situation is a classic case of brinkmanship. Politicians around the world constantly engage in driving pell-mell towards the edge, hoping that the other side blinks first.
So what happens if they arrive at a deal? We’ll just rewind the movie, and start again. Greece will NEVER pay their debts.
What if a deal isn’t reached, Greece defaults, and gets kicked out of the Euro? For those of us on the other side of the pond, probably not much. According to Vanguard’s Chief Economist Joe Davis, “this is perhaps the most anticipated default [in history].”
Most of Greece’s debt is owned by the European Central Bank, not by private institutions.
U.S. stock markets will probably pull back five to ten percent. European stock markets will pull back more.
I’d view it as a buying opportunity.
Don’t let it spoil your 4th of July. Thank the Good Lord we live in America!