A bigger immediate threat is that a Greek exit from the euro – rated as a 50-75% probability by Citigroup – will have a domino effect on Portugal, Spain and Italy.
Jason Conibear, director of foreign exchange firm Cambridge Mercantile, said the euro was currently as attractive to investors as a toxic derivative during the sub-prime crisis: \”There\’s every chance the euro will go into freefall in the weeks ahead against all the major currencies. Investors are waking up to the fact that the once-ridiculous notion the euro could collapse is increasingly the most likely outcome.\”
It was a ludicrous thing to have in the first place and the sooner its gone the better.
Gonna be painful but it\’ll be a lot more painful to keep it.
Looking around southern Portugal economic activity is simply grinding to a halt. Leaving the euro, expanding the money supply, defaulting on the debt, devaluing the currency. These aren\’t, as some seem to think, heterodox or unusual prescriptions.
They are, in fact, the straight old IMF prescriptions for countries in this situation. This is just mainstream economics.