Watch This Closely

Brian Williams was telling it straight the other day after the market hit a free fall. I think he was truely nervous with what he was watching happen to the market. I'm afraid that Germany is not going to come through and the Brits don't have enough money to bail anyone out. Like Brian says there will be a "daisychain" with all of this. We need to be on the lookout for signs of European economic collaspe which could lead to a downfall in our economy.



America has a good reason to worry about Greece.  You need to read the whole article, but let me quote a few lines from this article.

"The cause of the present turmoil, Greek public debt, has aroused fears of a wider sovereign-debt crisis and heightened concern about US government borrowing."

"A country whose government borrows beyond its capacity must eventually pay the price. Greece does teach that lesson, in case anybody had forgotten it – and in the US, some have. But the greater worry for the US at the moment is not that Europe shows where it is heading but that secondary effects from Greece and any widening emergency will squash its fledgling recovery."

"Financial contagion is the other big risk. Suppose Greece defaults. That will spread losses across the European banking system. Pressure to default could mount on other European countries, starting with Portugal and Spain but maybe spreading further. Just how badly US banks and non-banks are exposed to to these risks – directly, or through credit default swaps and other derivatives – may be unclear until it happens. Any new financial waves would crash over a US government whose fiscal capacity is all but maxed out and a country whose willingness to rescue banks is exhausted."

"The harder question is whether even a Greek default will resolve Europe’s difficulties. My bet would be no. Greece has a huge primary budget deficit. At least for a time after a debt restructuring it would struggle to find lenders. So even with its debts written down to nothing, it faces a period of fiscal austerity that will be wrenching at best and politically impossible at worst – with no central bank to support demand, and no currency of its own to devalue."

I say we all should brace ourselves and be prepared for the worse. It is better to be prepared days, moths or even years in advance than to be one minute to late.