QuoteOriginally posted by: farmerQuoteOriginally posted by: MartinghoulAt the current juncture, the Eurozone powers that be aren't quite ready to let Greece ride into the sunset all by its lonesome (and loathsome) self, 'cause they know that where Greece goes, Italy, with its EUR 1trn outstanding sov debt, follows. Is that good for EUR the ccy?It does not hurt the currency when someone doesn't have any of it to pay his debts. In isolation, that helps the currency. Like suppose someone waiting for his coupons sold euro futures to hedge. If Greece defaults, he is going to have to buy back those futures, huh?From the point of view of a creditor, devaluation, default, and restructuring all mean the same thing. But if Germany is to be rational, it is better to let Greece default, than to have both Greece and Germany effectively default through inflation.Greece and Spain defaulting does not destroy the currency. And destroying the currency does not save Greece from default, it just gives it another name. So my guess, is they would let Greece default without destroying/devaluing the currency.That's fine, I don't disagree... The point that it's all relatively easy for Germany has been made by a number of people. All I am trying to say is that there's a lot more than Greece at stake here. Fine, let's say the Germans at the steering wheel would not resort to the printing press to save Greece. Do you think their choice would be the same when it's time to say goodbye to Spain, Italy, Belgium, etc? So let's stop talking about Greece, since I agree that Greece is irrelevant. It's all about the next domino to fall.
Last edited by Martinghoul
on May 3rd, 2010, 10:00 pm, edited 1 time in total.