How do you think Greece's debt situation will affect the U.S.?

[Frugal]

Hi everyone,

I just woke up this morning to my Wall Street Journal telling me that Greece is having very major protests over gov't austerity measures due to the possibility of a Greek default on national debt.

Has anyone been following the situation in Greece? I think the major news media on TV, etc. are trying to keep the average American from being fully aware of this situation, because it does affect our stock market, and the last thing they want is a full-blown panic.

Do any of you think gas prices will go up over the next few days-few weeks because of this situation? I am going to fill up on gas today. I saw the stock market sank yesterday, and some key oil, etc. stocks are not doing as well.

[bjl584]

We had some Greece panic in the recent past and some more in the past couple days, but the panic may already be priced into the market by now. That, and I don't think that the EU will let Greece default.

Oil prices will probably continue to trend downward for now. We have a lot of supply. Commodities will probably follow the markets down as it corrects. Keep an eye on the US dollar. It may get a boost as the Euro falls which should translate to cheaper oil.

[kork13]

Originally Posted by Frugal

I think the major news media on TV, etc. are trying to keep the average American from being fully aware of this situation, because it does affect our stock market, and the last thing they want is a full-blown panic.

Actually, the news media thrives on panic and uncertainty and despair. Pessimism sells. This is why the overwhelming majority of print and tv news outlets highlight the most sensational, unfortunate, and otherwisely "bad news" occurring within the world. Panic makes money for the media, and believe me, if there's a story out there that can make a buck (by way of increased readership/viewership) the media sector will pounce.

[TBH]

This Washington Post piece has an interactive graphic that shows how financial meltdown can spread to different countries:

Europe’s financial contagion

[maat55]

Greece is just a drop in the bucket. Every country is in trouble with unfundable liabilities. Greece is nothing more than the rude awakening.

[snafu]

Financial network 'talking heads' have discussed the possibility of the USA likewise defaulting on debt. There is horror that the country that sees itself as the world's leader has a government that owes more than the GDP. The government is choosing to print money and lower the value of the USA dollar. They were nearly apoplectic about the cost of a Libya intervention on top of two active wars and threats from Iran.

[Frugal]

I have to disagree that the media is trying to "pounce" on this. To me, if anything, they are downplaying it, as I said previously, to avoid panic, and waking the U.S. public up to the fact that Portugal, Ireland, Spain, and yes, the United States could also rapidly fall like dominoes, should Greece default on its debts. I have to turn to foreign news media to see any real quality reporting of the massive riots in Greece. Don't you think if this happened in another European country like Germany, or France, or Britain to the extent to which it has in Greece, it would make at least some American news headlines? Everyone is silent on Greece, because in the international geopolitical stage, it is not considered a country of huge geopolitical significance. However, their debt situation IS significant, and I personally will continue to watch this situation closely, to see how the "contagion" that is Greek debt continues to spread (esp. after the vote of confidence today in Greece on the Prime Minister and his government).

[kork13]

Originally Posted by Frugal

I have to turn to foreign news media to see any real quality reporting of the massive riots in Greece. Don't you think if this happened in another European country like Germany, or France, or Britain to the extent to which it has in Greece, it would make at least some American news headlines?

No, I don't. I hate to have to tell you this, but Americans (as a nation) really are quite egotistical and self-centered, and the media as well. In general, most American's really don't care what's happening outside the US, or often even outside their own state borders. So the mass news media gives them what they want. Stories about stuff like Greece and other international concerns are certainly out there, but they're just far less common than ones about Weiner or LeBron or the latest cell phone.

[cypher1]

Originally Posted by kork13

No, I don't. I hate to have to tell you this, but Americans (as a nation) really are quite egotistical and self-centered, and the media as well. In general, most American's really don't care what's happening outside the US, or often even outside their own state borders. So the mass news media gives them what they want. Stories about stuff like Greece and other international concerns are certainly out there, but they're just far less common than ones about Weiner or LeBron or the latest cell phone.

I agree with this. Sad, but true for the most part.

[tripods68]

I don't trust the market.

If Greece defaults, the market will take a tumble....Lehman-style. It's times to focus again on reallocation model; reduce holding large from equity market in favor more towards bonds, cash, and/or MUNIs combine.

[Frugal]

Kork13: not all Americans are as you paint them to be, just like not all Europeans fit a certain mold or stereotype that Americans could hold of them. I have been overseas, and I think that people are basically the same everywhere.

[wincrasher]

We live in a brave new world. There is no formula to predict what could happen, so the panic in the news.

So instead of being worried, we play political russian roulette with the debt limit and our budget.

Clearly it's unthinkable and unnecessary for the US to default. The current panic is largely politically created to settle some old scores and advance an agenda. Really we have the power to resolve our own problems - we can print money, devalue our currency, raise taxes and cut benefits - most likely some combo of all of these things. Hopefully, we won't wreck our credit and cause mass hysteria to get to the solution.

The rest of the world is worried about a chain reaction melt-down if Greece defaults. Why should Ireland, Portugal, Spain, etc, pay if Greece can get away without paying? The euro and really the whole EU is at risk. The whole world is fairly fragile economically right now, so nobody can sink alone. Riots in the streets are troubling. It smacks of unfairness to the proposed solutions.