I've always wanted to own my own Greek island

[Zimme83]

As  long as a country can borrow money to pay their debt nothing will happen, US can borrow money and pay the debts only because the rest of the world believe they can. It a gigantic pyramide game were countries boost economy by borrow money from each others.

What could be interesting from the US standpoint is that most of the money is coming from China, is it really that wise to be so deeply in debt with what can be an enemy in a future conflict? And what happen if China "close the taps"? (And can Chinas economy make it without the US export?.)

[Brooke]

If Greece will drop out of euro they will become very poor with the new currency. That's great news for a country that lives from tourism and has recently discovered oil and gas along with awesome agricultural products, wine etc. Tourists will flock in, money flows and greeks will prosper again.

After defaults, things usually remain bad until the country correctly restructures its economy and policies.  Some countries' citizens perpetually vote for the wrong policies, even though history gives numerous clear lessons on what to do and what not to do.

[Bodhi]

After defaults, things usually remain bad until the country correctly restructures its economy and policies.  Some countries' citizens perpetually vote for the wrong policies, even though history gives numerous clear lessons on what to do and what not to do.

I am kind of seeing dejavu on that statement here.

[Brooke]

As  long as a country can borrow money to pay their debt nothing will happen, US can borrow money and pay the debts only because the rest of the world believe they can. It a gigantic pyramide game were countries boost economy by borrow money from each others.

I feel that the pyramid is reaching it's critical size.

[Brooke]

I am kind of seeing dejavu on that statement here.

Indeed. 

[Zimme83]

I feel that the pyramid is reaching it's critical size.

Yes, our economies growing mostly because we create money out of nothing and as i said it works as long as everyone believes in it. But most of our wealth is just air. All bubbles work that way, we overpay property etc because we believe we can get even more money for it when we sell it. But when people stops believe in it the market will collaps.

[PR3D4TOR]

The market may collapse, but the property is still there. Nothing is destroyed or ruined, except for people who are speculating, gambling, in the market and are stuck with property they don't need and loans they can't repay. I cannot muster up any sympathy for them. People who buy property because they need it still have the property they need. And if they need to buy new property the price level will be the same as for the property they sell regardless if the price is higher or lower than before. People who live above their means (like the Greeks) get no sympathy from me.

[Zimme83]

Impact on national economy can still be significant and a lot of people "on the bottom" will suffer from a collapse even if they dont have any overpaid property or something like that.

[PR3D4TOR]

How? If the property marked is at rock bottom that is the exact time that people who before the collapse couldn't afford to buy a house, now can. People who had to rent instead of own. It's when property prices are high that poor people suffer, not the other way around. Especially young people who are trying to establish a family.

[Zimme83]

Unemployment rate goes up, consumption goes down and then factories etc has to send people home.

[PR3D4TOR]

Exactly how does the property market affect consumption and unemployment?

[Zimme83]

Why do u get so fixated at property? I took it as an example of how we create a bubble...
This is about a lot more than just property, its about the entire financial market.

[PR3D4TOR]

It was your comment on the property marked I had an issue with.

[Zimme83]

Only look at the US, it was not the rich that took the hardest blow...

[PR3D4TOR]

The hardest blow was taken by those living above their means. People who owned houses with mortgages they could not possibly manage.