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Greek bailout could cost U.S. big-time
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By David Frum, CNN Contributor
Which is scarier? Letting Greece go bankrupt? Or saving Greece from bankruptcy?
If you're a European businessman or banker, the answer is obvious: Bankruptcy is scarier.
If Greece cannot pay its debts, Greece will likely quit the euro. By quitting the euro, Greece would regain the power to print its own money and inflate its way out of its debt.
Now think what that would mean for your business. If Greece quit the euro, people would begin to worry: Who's next? Will Portugal quit? Spain? Italy? France?
Do you own a 1000 euro deposit in a Spanish bank? Tomorrow that account could be denominated in new pesetas, at who knows what exchange rate. Better cash out today.
Likewise: Better sell your Portuguese and Italian bonds -- not only government bonds, but bonds issued by any agency sponsored by government: water, electricity, transit authorities, and so on.
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Greece-World News
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Merkel 'suggests Greek referendum on euro membership'
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Merkel 'suggests Greek referendum on euro membership'
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Greek party most extreme of Europe's far right
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Threats against the country will be faced effectively, caretaker FM said
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