How Will Greece's Financial Collapse Affect You?

How Will Greece's Financial Collapse Affect You?
posted with permission from http://sane-ramblings.blogspot.com/2010/05/how-will-greeces-financial-collapse.html

The financial crisis is growing quickly. Rather than let Greece collapse, Euro-Zone nations and the International Monetary Fund suddenly pledged $147 billion* in loans.

But the collapse will only be postponed for Greece is broke and unable to pay back any massive new loans, assuming they even receive all of the money pledged, which is not nearly enough to meet Greece's obligations.

To get those loans, Greece must raise taxes sharply, while slashing jobs and cutting salaries and pensions. The Greek people are protesting and unions are conducting strikes. For example, today, the airlines shut down all domestic flights and those in and out of Greece, the schools are closed, as are most businesses and all tourist attractions, hospitals have only skeletal staffs, while ambulance drivers have also struck, as have television and radio reporters. The country is effectively paralyzed.

Meanwhile, a tiny group of protesters torched an Athens bank, killing three people.

But the situation gets worse, for Greece isn't the only Euro-Zone nation in serious financial trouble. Portugal, Spain, Ireland and Italy are also broke, as is Great Britain. And don't fool yourself, so is the world's biggest debtor nation, the U.S.

If you are an American, how will this European financial crisis affect you?

1) America is desperately borrowing money from all over the world, and abruptly, there may be less from Europe, for they have their own dire needs. This brings our financial crisis closer.

2) Your living standard will drop, the first drop since the Great Depression of the 1930's. Heavy borrowing and the Fed printing money out of thin air have so far postponed the day of reckoning. But these actions haven't prevented it. In fact, they are making it worse.

3) The U.S. is already devaluing its dollar and it will devalue it faster as its debts mount, in order to pay the interest on its Mt. Everest size borrowings. This means your dollar will become worth 50 cents and will continue to sink, your retirement will be pushed back 10 years, your Medicare and Social Security will be cut or postponed, your vacations will be shorter and your life savings will be worth half as much or less.

What can you do about it? This government belongs to you. Don't allow it to destroy the value of your money, raise your voice, for you could make a difference. Here are specifics you can ask them to address:

1) The out of control military spending on weapons, wars and military bases all over the world. We spend more than the next 15 military powers combined. But Congress won't cut it because it creates jobs in nearly EVERY Congressional District in the U.S. Unfortunately, those millions of jobs are all at taxpayer expense. This alone is a sure path to the poor house.

2) The Fed taking on more debts. Instead, please ask them to sell the trillions of dollars in "toxic assets" they already own. This applies to real estate with Fannie and Freddie, which are stuffed with millions of bad mortgages, yet are squeezing in more to prop up the marketplace, creating the illusion it's in recovery.

As in the Great Depression, we will unite to help one another through the financial chaos. But if you remain silent now when you could make a difference, please watch what happens in Greece and to the other troubled European nations for that too will be our future, but on a far grander scale.

*110 billion Euros

We have the ability to devalue our own currency - Greece is stuck with the Euro.

We have the ability (when things get desparate enough) to reduce military spending and plow that back into the economy or buying back debt - Greece is tapped out.

Living standards will drop though, that's a given with globalization.

That's true, but that is going to surprise and anger a lot of people over here, not to mention our creditors.

Excellent follow-up, BTW.

as my salary is pegged to the dollar.

Plus, vacations in Athens will be cheaper...

I don't take any great happiness from that though...

..with better perspective??