The first pebble has fallen off the fiscal cliff:
Greece's last-minute overtures to international creditors for financial aid on Tuesday were not enough to save the country from becoming the first developed economy....
"Developed"? Maybe at one time, but not anymore.
Of course, that could apply to every first world country, most especially our own, as "developed" economies don't run up debt bigger than their annual GDP.
....to default on a loan with the International Monetary Fund. The IMF confirmed that Greece had not made its scheduled 1.6 billion euro loan repayment to the fund. As a result, IMF Managing Director Christine Lagarde will report to the global lender's board that Greece is "in arrears," the official euphemism for default.
Fears of a Greek default have unnerved financial markets on concerns that it would ultimately lead to the country's exit from the euro common currency. The fate of Greece's membership in the nineteen-nation currency bloc still hangs in the balance ahead of a referendum on Sunday when Greek citizens will vote on whether to accept the austerity terms of continued international aid.
Eh. Greek default is a tiny ripple in the global economic pond, because it is, well, a pebble. By itself. And since the Greek people are pretty overwhelmingly for caving to their country's German creditors rather than leaving the E.U., Prime Minister Tsipras's referendum is a boomerang waiting to happen.
The question to ask is, will it remain just an isolated pebble making a miniscule "ploop" in the world financial waves, or will it be the vanguard of an avalanche to follow:
"It's unprecedented for a major industrialized country, which Greece is, believe it or not.
If you say so, Pete. But I still beg to differ.
If you look at Greece before the financial crisis, very high income level, very competitive shipping in the petroleum sectors, tourism business, not a lot, but a small country. Now defaulting," he said.
Because their debt binge wiped all of that out.
"Why? It got in over its head, it borrowed too much money because it was in the Euro zone. Now [German Chancellor] Angela Merkel is saying, if it fails, the Euro will fail.
And yet she refused to cave to Prime Minister Tsipras's exortionistic threats. Which sounds like much more of a Germanic decision than a Eurocentric one. Which means there might be hope for the Continent after all.
"The Euro's going to fail not because of Greece … The Euro doesn't make sense for Italy, Spain, Portugal, Greece, Ireland, and others. It's just that Greece is the first domino to fall."
And if they all fall the way Greece did....that'll be a lot of Mediterranean dachas and Russian naval bases for Czar Vlad. If, on the other hand, they depart as a result of learning from their own and the Greeks' horrible examples....perhaps the aforementioned revival of European "diversity" might even be broad-based and comprehensive.
Yeah, it's too much to hope for. But in my current state of mind, I could use some hope, no matter how forlorn it is.