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No Hiding Place From Crisis Bigger Than Lehman: Economist

Posted By admin On September 12, 2011 @ 8:19 am In Featured Stories,Tile | Comments Disabled

Patrick Allen
CNBC [1]
Sept 12, 2011

Carl Weinberg, the chief economist at High Frequency Economics is very worried about Europe. His central forecast is that the debt crisis will lead Europe into a depression that will mean soaring unemployment, deflation and zero interest rates for the foreseeable future.

After months of inaction, Weinberg believes the time to stop a Greek default has now passed. He believes that once it becomes clear that Greece has defaulted, the market will quickly come to the realization that other euro zone members like Portugal, Ireland, Spain and Italy will be allowed to fail as well.

With the so-called PIIGS (Portugal, Ireland, Italy, Greece and Spain) sitting on 3 trillion euros in debt, Weinberg is assuming losses could ultimately hit 50 cents in the euro, leading to a 1.5 trillion euro hit to the financial system.

This will in Weinberg’s opinion force banks to stop lending. Governments will then be forced to bail them out, elevating debt-to-GDP ratios for national governments to “horrific levels”.

Full article here [1]

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URLs in this post:

[1] CNBC: http://www.cnbc.com/id/44482701

[2] Spain, Portugal and Belgium set to follow Ireland into abyss as debt crisis threatens to destroy the euro: http://www.prisonplanet.com/spain-portugal-and-belgium-set-to-follow-ireland-into-abyss-as-debt-crisis-threatens-to-destroy-the-euro.html

[3] The Euro Zone and the Crisis of Sovereign Debt: http://www.prisonplanet.com/the-euro-zone-and-the-crisis-of-sovereign-debt.html

[4] Europe’s ‘Lehman Moment’ Looms as Greek Debt Unravels Markets: Euro Credit: http://www.prisonplanet.com/europe%e2%80%99s-%e2%80%98lehman-moment%e2%80%99-looms-as-greek-debt-unravels-markets-euro-credit.html

[5] Will Financial Problems In Portugal Cause The European Debt Crisis To Spiral Out Of Control?: http://www.prisonplanet.com/will-financial-problems-in-portugal-cause-the-european-debt-crisis-to-spiral-out-of-control.html

[6] 18 Signs That The Banking Crisis In Europe Has Just Gone From Bad To Worse: http://www.prisonplanet.com/18-signs-that-the-banking-crisis-in-europe-has-just-gone-from-bad-to-worse.html

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