Tuesday, April 5, 2011

Roubini: Greece Is Going to Go Bankrupt

A new report from Roubini Global Economics concludes:
IMF officials have denied the veracity of an April 2 Der Spiegel article that claimed the IMF was pushing for a Greek debt restructuring behind the scenes; S&P downgraded Greece to BB- on March 29, and in RGE’s view, a Greek debt rescheduling is inevitable.
Rescheduling is, of course, the polite way to say "bankrupt." Whatever the wording, RGE is probably dead on accurate here.

As I have stated before, Nouriel Roubini is the most connected economist in the business. Most central banks have him on their payroll. He is not going to let this type speculation occur under the RGE banner unless he has talked to people who are very close to the situation and are telling him that Greece is going down.

The ramifications of a Greek "rescheduling" are very serious. It is going to put added market pressure on the debt of the other PIIGS. It may even lead to the end of the euro. The other PIIGS are going to want to print their own money rather than deal with the dictates of Berlin and Brussels.

1 comment:

  1. Good to the USD in the short term then?