The 'market' (bond, commodity,
stock, FX, etc.) in general, is like a supernatural entity and it can
bring down the Governments. For example, the USSR (Union of Soviet
Socialist Republics) came crashing down and adapted capitalism from the
ruins of the old system. Recently, the Argentine middle classes lost
there 'shirt' as the value of the peso crashed, due to Government debt.
At
the moment, why there is a Greece crisis it is because they cannot
afford to pay the interest of the bond debts. The money every three
months become due. The recent turmoil has been caused because successive
Governments had borrowed too much and can't afford the interest on the
loans. These loans are called bond that are traded in the market. As
Greece didn't have the money to pay the interest on their bonds they had
to ask the EEC (European Economic Community) and the IMF (International
Monetary Fund) to rescue them. That is the historic debts!
Any
new borrowing by Greece is now price at 15% per annum. This is much
more than the country earns, so, there is no way to pay without going
bankrupt. This is the cost of the crisis that the market will bring to
the door of any 'Govt.' or 'person' who ignores it.
Don't be surprised if the Euro or Sterling drops in value because Greece problems are endemic in many European countries.
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