We can’t forget that Greece is still a major news item in the financial world. It may not be getting a lot of attention at this moment, but it will be back in the spotlight shortly.
It is looking as though the Greek government will run out of money sometime in mid-May. It won’t be able to pay the interest on its debts.
The European Union can continue to kick the can by lending even more money to Greece, but it will just be flushing more money down the drain.
There was an article on Yahoo Finance titled “It’s time to stop worrying about Greece defaulting”. Perhaps this is the financial press coming to grips with the inevitable.
The article states: “Greece will be better off if it rebuffs the tough austerity measures demanded as a condition of two bailouts by European authorities.”
This is what is not understood, or is being purposely portrayed incorrectly. If Greece defaults on its debts, then the EU so-called austerity for Greece will look like nothing. If Greece defaults on its debts and nobody is willing to lend the government any money for a while, then they will see some true austerity.
The government won’t just be defaulting on its debt, but also many of the promises it has made to Greeks. It will mean busted pensions and massive layoffs. It is the only long-term solution, unless the EU (mostly Germany) wants to bail out Greeks indefinitely.
Be ready for more fireworks in the next few weeks. We will see if the proverbial can gets kicked again or if this is the end of the line.
The price of gold has been hanging around the $1,200 mark for a while now. Perhaps a Greek default will finally put some movement into the price of the yellow metal.