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View Diary: Beware of Greeks bearing debt (141 comments)

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  •  Actually quite simple (4+ / 0-)
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    greenearth, Cliss, ilex, in the Trees

    It is actually not all that complicated (it just sounds like it is).

    Short version:

    Greece is running a budget deficit. It needs to borrow more money to cover its upcoming expenditures. But it also has to pay back some loans that are maturing in May. So it needs to borrow even more money.

    But Greece has already borrowed a lot of money and now people are starting to wonder if they can pay all this money back ... or will they "default" and only pay some of it back.

    Not surprisingly most investors have decided to steer clear (or are demanding very high interest rates to compensate for the risk), meaning only the EU and the IMF may be willing to lend them money.... but only if Greece cuts its budget deficits ... which will also likely cause social unrest.

    Greece is in a lot of trouble. The scary thing is that their problems are not all that different than those faced by the US ... with one exception. The US still has its own currency and if it got into the same "lack of confidence" mess, it could just turn on the printing presses ... of course then each dollar would be worth a lot less.

    I can live with doubt and uncertainty and not knowing. I think it is much more interesting to live not knowing than to have answers that might be wrong- Feynman

    by taonow on Tue Apr 27, 2010 at 01:27:55 PM PDT

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