Silvia Wadhwa, Antonia van de Velde
Sept 16, 2011
A collapse of Europe’s moneta ...
pengecatbintang Post at 17-9-2011 23:21 
http://www.wealthwire.com/news/economy/1885
George Soros & Nouriel Roubini: Greece Should Default ASAP Posted by Brittany Stepniak - Monday, September 19th, 2011 The crisis in the European continent has escalated to severe levels of financial trauma. Business leaders, billionaires, and politicians alike are suggesting that Greece voluntarily leave the euro zone...
The infamous economist Nouriel Roubini told the Financial Times that it'd be best for Greece to return to its previous currency: the drachma. Without any other viable solutions, Greeks runs a cyclic case of insolvency and will only plummet further into depression.
Billionaire hedge fund investor George Soros seconds Roubini's notion:
The lack of a central European treasury has too often made state-by-state solutions to the crisis a day late and dollar short. "No concessional [borrowing] rates for Italy or Spain and no preparation for a possible default and defection from the eurozone by Greece" have made the crisis increasingly intractable. Added to that, the Germans have declared the European Financial Stability Facility to be unconstitutional.
Greece's only hope for survival as a nation to begin a process of orderly default and returning to its last-used currency.
In doing so, the country has a strong chance of restructuring and rebuilding in terms of restoring competitiveness and growth. It's a similar scenario to when Argentina abandoned its currency peg (along with other emerging markets).
Even this process won't be an easy one. Capital losses could prove to be a major problem for many of the major eurozone financial institutions. In very short time, the foreign euro liabilities of Greece's government, companies, and banks would sky-rocket. Meanwhile, a lot of investors and eurozone banks would suffer fairly large losses. However, it's much better than the alternative...and they are problems that could be dealt with. The institutions facing losses would just have to act quickly – recapitalizing in a timely fashion.
On the other hand, there are some surprisingly beneficial aspects of Greece leaving the euro. Many experts are even using the analogy of a failing marriage relationship:
Like a broken marriage that requires a break-up, it is better to have rules that make separation less costly to both sides. Breaking up and divorcing is painful and costly, even when such rules exist. Make no mistake: an orderly euro exit will be hard. But watching the slow disorderly implosion of the Greek economy and society will be much worse.
*Indented excerpts from Financial Times. | 
Post time 20-9-2011 11:35 PM
