[Mind-numbed Robot]

Greece’s problem is that they no longer have a Drachma and are roped to the Germans through the Euro. If they had their own currency then they would be far better off and could let it sink.

Thanks for the explanation. I have wondered how the small nation of Greece could be bringing the whole world down.

[BenKenobi]

Well it’s not just Greece. It’s the fact that they are all so overleveraged. Consider Greece the straw that broke the camel’s back. Greece isn’t as heavy as the other burdens, but Germany can’t carry everybody else AND Greece.

What has been happening is that they are coming to Uncle Sam for help. Which is problematic because Uncle Sam doesn’t have the money anymore to keep the system going.

If you take the entire world, We are currently about 50 trillion in debt on 70 trillion in income. Meaning that the debt buffer is about 20 trillion dollars and expanding about 3 or 4 trillion a year. The problem is that overspending is expanding existing debt faster than the economy is growing.

The good news is that stopping spending will still stop the train. The bad news is good luck getting most of the world to agree with it.