Europe’s Problems This Way Come

By Michael Pennington © Copyright 2010 Pennco Coins

If anyone thinks Europe’s problems are just Europe’s problem, you aren’t following global financial reality. Their problems are our problems and they’re already heading in this direction.
Greece is the epicenter of the financial earthquake that is shaking the euro zone to its foundations. The Greeks simply borrowed way too much for too long and now they can’t afford to pay it back — despite a $143-billion bailout package from the euro zone and International Monetary Fund.
Now, British economists have advised the Greek government to leave the euro and default on their sovereign debt to save the Greek economy.
The London-based Centre for Economics and Business Research warned Greek ministers they will be unable to escape their debt trap without devaluing their own currency to boost exports. There’s only one way this can happen — if Greece returns to its own currency.
If Greece exits the euro, two other financially strapped European countries, Spain and Portugal, would probably follow suit. These three ailing euro-zone countries have issued public and private debt worth $2.6 TRILLION, according to economists at The Royal Bank of Scotland. That’s equal to a whopping 22% of the region’s gross domestic product. There’s no way in heck those countries can pay that back.
Exiting the euro is fast becoming the only real option.
Now, consider that in Greece, vendors are selling gold coins on the steps of the Athens Stock Exchange, as frantic citizens cash in their paper assets and convert them to gold. Also consider that Germans, terrified of the kind of currency crisis they went through in the 1930s, are even now rushing to buy gold coins. Consider what will happen if this same scenario starts playing out in Portugal, Spain — heck, maybe across Europe! That could send gold prices CATAPULTING higher.
If Greece abandons the Euro, the U.S. dollar is toast.


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