A HUGE crash is coming.

[Beet]

Get ready. Within the next 12 mo., Greece will default, and then all hell will break loose.

There will be a major, major conflict between Germany and the European Central Bank, the latter will attempt to commit unlimited unsterilized QE to defend Italy and Spain from following in Greece's footsteps. The former, particularly in the Bundesbank will howl as loud as it can about Weimar and hyperinflation.

Meanwhile the region will be engulfed by political turmoil, with out-parties benefiting and incumbents being destroyed, and fringe parties also benefiting.

[opebo]

Such a shame, when unlimited unsterilized QE would solve the problem right now (or would have months ago).  Stupid Germany.

[Sam Spade]

Get ready. Within the next 12 mo., Greece will default, and then all hell will break loose.

There will be a major, major conflict between Germany and the European Central Bank, the latter will attempt to commit unlimited unsterilized QE to defend Italy and Spain from following in Greece's footsteps. The former, particularly in the Bundesbank will howl as loud as it can about Weimar and hyperinflation.

Meanwhile the region will be engulfed by political turmoil, with out-parties benefiting and incumbents being destroyed, and fringe parties also benefiting.

Be careful.  The end point may not be a Greece default, it may be a later act.  And there is always the strong possibility the ECB saves Greece to only allow complete annihilation to occur because a hole goes unplugged somewhere else and they can't save it.

But whatever...  Is anything in the Euro area solvent other than maybe the Bundesbank (and Germany by proxy) for now?

[Platypus]

Oh hai all my money in Australian miners, how you doin? What's that, I should diversify in to South American miners? OK. Buy property in the USA? No can do, monies.

--------

If Greece defaults, Italy and Spain are in major trouble. If Italy and Spain are in major toruble, so is the whole of the North Atlantic. If the North Atlantic is in trouble, China is too. At that point everyone is screwed, but the least screwed will be Africa (nothing to lose), South America and Australia (resource-based exports will still be reasonable, even if they lose a lot of their strength). So yeah,  head south or into precious metals directly.

Or good property.

[Beet]

The whole idea of solvency of nations troubles me. I mean I realize Walter Wriston's "countries don't go bankrupt" line has taken its place in the pantheon alongside Irving Fisher's "permanently high plateau" ... but at the end of the day, it's true, isn't it? Default is always a political decision.

[Joe Republic]

For everyone's sake, I sincerely hope Beet's economic projections are as accurate as his electoral predictions.

[opebo]

The whole idea of solvency of nations troubles me. I mean I realize Walter Wriston's "countries don't go bankrupt" line has taken its place in the pantheon alongside Irving Fisher's "permanently high plateau" ... but at the end of the day, it's true, isn't it? Default is always a political decision.

Precisely.  This talk of 'bankruptcy' is really more of that small-minded thinking from the Right, in which the special role of the State in the economy is not acknowledged, and in which private interests are place on a par with the State.  Of course all economic 'problems' short of actual physical disaster (and in many cases those as well) can be solved simply by the application of good policy.

[Simfan34]

Get ready. Within the next 12 mo., Greece will default, and then all hell will break loose.

There will be a major, major conflict between Germany and the European Central Bank, the latter will attempt to commit unlimited unsterilized QE to defend Italy and Spain from following in Greece's footsteps. The former, particularly in the Bundesbank will howl as loud as it can about Weimar and hyperinflation.

Meanwhile the region will be engulfed by political turmoil, with out-parties benefiting and incumbents being destroyed, and fringe parties also benefiting.

I almost feel like it's not fair to the other 7 billion of us that tiny GREECE will take down the world economy.  Oh well.

And the Chinese bubble ought to burst any time now.

[opebo]

I almost feel like it's not fair to the other 7 billion of us that tiny GREECE will take down the world economy.  Oh well.

It isn't Greece taking it down, isn't it obvious?  It is idiotic deflationary/contractionary 'austerity' policy on the part of the main economic powers - chiefly the US and the EU.

[Lief 🗽]

Basically it's up to the CSU and FDP at this point whether or not they want to destroy the global economy. I obviously have little faith in them.

[Middle-aged Europe]

Basically it's up to the CSU and FDP at this point whether or not they want to destroy the global economy. I obviously have little faith in them.

The FDP's current main priority is getting more than 5% in Schleswig-Holstein next May. If they have to destroy the global economy to achieve this, so be it.

[CARLHAYDEN]

Get ready. Within the next 12 mo., Greece will default, and then all hell will break loose.

There will be a major, major conflict between Germany and the European Central Bank, the latter will attempt to commit unlimited unsterilized QE to defend Italy and Spain from following in Greece's footsteps. The former, particularly in the Bundesbank will howl as loud as it can about Weimar and hyperinflation.

Meanwhile the region will be engulfed by political turmoil, with out-parties benefiting and incumbents being destroyed, and fringe parties also benefiting.

Your analysis appears to be fundamentally correct.

However, its not only Germany that has had it with bailing out the PIIGS.  A number of other European countries have had enough.

[J. J.]

Beet, you are probably right.