Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Why You Shouldn’t Get Excited About Gold Price Mini-Rally - 26th Jan 21
The Truth About Personal Savings Everybody Should Know and Think About - 26th Jan 21
4 Economic Challenges for 2021 - 26th Jan 21
Scan Computers 2021 "Awaiting Picking" - 5950x RTX 3080 Custom PC Build Stock Status - 26th Jan 21
The End of the World History Stock Market Chart : Big Pattern = Big Move - 26th Jan 21
Stock Market Recent Sector Triggers Suggest Stocks May Enter Rally Phase - 26th Jan 21
3 Top-Performing Tech Stocks for 2021 - 26th Jan 21
5 Tips to Manage Your Debt - 26th Jan 21
Stock Market Intermediate Trend Intact - 25th Jan 21
Precious Metals Could Decline Before their Next Attempt to Rally - 25th Jan 21
Great Ways of Choosing Good CMMS Software for a Business - 25th Jan 21
The Dark Forces behind American Insurrectionists - 25th Jan 21
Economic Stimulus Doesn’t Always Stimulate – Pushing On A String - 25th Jan 21
Can Karcher K7 Pressure Washer Clean a Weed Infested Driveway? Extreme Power Test - 25th Jan 21
Lockdown Sea Shanty Craze - "Drunken Sailor" on the Pirate Falls Crazy Boat Ride - 25th Jan 21
Intel Empire Fights Back with Rocket and Alder Lake! - 24th Jan 21
4 Reasons for Coronavirus 2021 Hope - 24th Jan 21
Apple M1 Chip Another Nail in Intel's Coffin - Top AI Tech Stocks 2021 - 24th Jan 21
Stock Market: Why You Should Prepare for a Jump in Volatility - 24th Jan 21
What’s next for Bitcoin Price – $56k or $16k? - 24th Jan 21
How Does Credit Repair Work? - 24th Jan 21
Silver Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Global Economy is at the Mercy of Tiny Greece?

Economics / Global Debt Crisis Nov 05, 2011 - 03:32 AM GMT

By: Sy_Harding

Economics

Best Financial Markets Analysis ArticleIt’s incredible when you think about it.

Greece is one of the smallest countries and economies in the world. Its population is 11 million people out of the 492 million in the combined European Union countries, and compared to 312 million in the U.S., 1.3 billion in China, 1.2 billion in India.


Its economy is 32nd in size globally, with annual GDP of only $0.3 trillion, compared to $63 trillion for the world as a whole, $16.2 trillion for the combined European Union countries, $14.5 trillion for the U.S., $6 trillion for China, $5.5 trillion for Japan, and so on. Yet for almost two years tiny Greece has had the entire world trembling in fear every few months, world markets in confusion, and world leaders rattled. For the last several weeks the threat from Greece has been a banking and financial crisis in Europe that could throw the entire world into recession, as Greece procrastinates and flip-flops on how it will handle the latest offer to bail it out of its debt crisis. If it were a military threat from such a tiny country, the overwhelming military strength of the rest of the world would make it a joke. But its economic threat has the rest of the world’s overwhelming wealth and economic power helpless to do anything about it? The fear and confusion can be seen in the action of global stock markets. Global markets rallied in the strongest October in years as the latest eurozone rescue and bailout measures were anticipated, and spiked up even further just over a week ago when it was announced that eurozone countries had agreed to the plan. But markets suffered a big two-day plunge on Monday and Tuesday of this week when Greek Prime Minister Papandreou said Greece might back out of the deal, that he wouldn’t be able to decide until he puts the plan to a public referendum in December. On Wednesday and Thursday markets rallied back strongly when rumors hit the wires that Papandreou might be back-tracking on his demand for a public referendum. On Thursday he did back-track, announcing there was no need for the referendum after all. It was a surprisingly fast flip-flop given that he had only proposed the referendum on Monday and as late as Wednesday evening was in Cannes still trying to convince German and French leaders of the need for a referendum. Now going into the weekend, Greece has markets and world leaders back in fear mode. Papandreou has called for the Greek parliament to meet Friday night for a confidence vote on his government, which rules by the slimmest of margins after defections over his handling of the bailout agreement. Experts say if Papandreou does not survive the confidence vote Friday night an early election in Greece would have to be held, which would mean several more weeks of uncertainty that would allow the financial panic to potentially engulf already teetering Italy. All of this as the G-20 major industrial and emerging market countries were ending their summit meeting in Cannes on Friday, where a related drama played out. A major part of the big rescue plan for the eurozone calls for increasing the size of the ESFS rescue fund from 440 billion euros to 1 trillion euros ($1.4 trillion). How that will be accomplished has yet to be worked out. European officials were hoping to use the G-20 summit to convince others to help.   But the meeting ended Friday with no G-20 country committing to contribute to the fund, only agreeing to continue to discuss the possibility. Meanwhile, in recent columns I’ve been saying that if we could only ignore Europe, global economic fears would not be so ominous since indications are that the U.S. economic slowdown has bottomed and a recovery is underway. We received still more evidence of that this week with reports that auto sales were strong in October, 7.5% higher than October of last year. And while Friday’s employment report was that only 80,000 new jobs were created in October, a bit short of the 90,000 that were forecast, the unemployment rate ticked down to 9.0% from 9.1%. And more importantly, there were substantial upward revisions to previous reports. The number of jobs created in September was revised to 158,000 from the previously reported 103,000, and hiring in August was revised up to 104,000 from the previously reported 57,000. It’s another positive to see previous reports being revised up rather than the endless stream of downward revisions to previous reports that dominated the reports during the summer. But unfortunately, markets are back to being hostage to the whims of tiny Greece, and whether its prime minister will survive Friday night’s confidence vote, while world leaders continue to demonstrate a profound inability (or unwillingness) to do anything about the almost two-year old worsening crisis - except to continue to discuss and worry about its increasing threat to their own economies. It’s particularly disturbing to think that Papandreou might have called for the confidence vote only in an attempt to hold onto his job, perhaps thinking the Greek parliament will not vote him out, even though they might want to, if it would mean jeopardizing the debt crisis rescue plan.     

Sy Harding is president of Asset Management Research Corp, publishers of the financial website www.StreetSmartReport.com, and the free daily market blog, www.SyHardingblog.com.

© 2011 Copyright Sy Harding- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules