How shock waves will hit US if Greece drops euro

[Auggie]

Associated Press / San Francisco Chronicle

(06-16) NEW YORK, (AP) -- The unthinkable suddenly looks possible.

Bankers, governments and investors are preparing for Greece to stop using the euro as its currency, a move that could spread turmoil throughout the global financial system.

The worst case envisions governments defaulting on their debts, a run on European banks and a worldwide credit crunch reminiscent of the financial crisis in the fall of 2008.

A Greek election on Sunday will determine whether it happens. Syriza, a party opposed to the restrictions placed on Greece in exchange for a bailout from European neighbors, could do well.

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2012/06/15/national/a000014D91.DTL&tsp=1

Within the article are presented 4 scenarios of the possible fallout. Worth reading, IMO.

(Note: Reposted from Late Breaking News -- the thread was locked for being "off-topic". Apologies to all.)

[pinto]

1. Thanks for the post. The intricacies and various connections of global economies often go right over

me head. This one made sense to me, even in light that much of it is "what if" analysis. I got the overall background framework.

[Swede Atlanta]

2. This just underscores how everything is linked.....

The U.S. is linked in a global economy. The U.S. generally does better or well when the entire global economic boat is rising. We are harmed when that boat gets a leak and is sitting low in the water.

The same thing applies on a national, state or local level. If the poorest of us is doing better, we all do better. The only exception, of course, is for the super rich. They actually soar when the rest of us are struggling as they raise interest rates on debt, foreclose on people's homes, etc.

Class warfare? Yes of course there is class warfare but this wasn't launched by President Obama. It has been an ongoing war for the past 30 years at least.

[davidpdx]

3. It will be interesting to see how the election turns out on Sunday

Europe needs to pull together and contain the crisis to keep the EU intact. If not, it's possible there is going to be a contagion throughout Europe.

[abelenkpe]

4. ...

"If Syriza gains power and rejects the terms of the bailout, Greece could lose its lifeline, default on its debt and decide that it must print its own currency, the drachma, to stay afloat"

Syriza wants to renegotiate terms to include growth and not just austerity. They do not want to leave the euro. If they leave it will be because they are forced out.

[DCBob]

5. I doubt there will much impact regardless of what the Greeks do.

The world financial institutions have be expecting, planning and prepping for this scenario for a long time. Most likely just a blip on the screen at this point. If this happened a couple of years ago it would have been a different story.

[uponit7771]

6. greece has same gdp as maryland