Greenspan Says Greece Default ‘Almost Certain,’ May Trigger U.S. Recession!

• Illuminist Alan Greenspan (Committee of 300?) is correct in this respect. Greece will default, whether this summer or next remains to be seen. Strictly speaking a Greek default should not affect the Eurozone as the amount involved isn’t large. It is the contagion effect that has everybody worried ie. it sets off default in the rest of the PIIGS.
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  Greenspan Says Greece Default ‘Almost Certain,’ May Trigger U.S. Recession
  By Vivien Lou Chen, http://www.bloomberg.com/
  Alan Greenspan, former Federal Reserve chairman, said a default by Greece is “almost certain” and could help drive the U.S. economy into recession. “The problem you have is that it’s extremely unlikely the political system will work” in a way that solves Greece’s crisis, Greenspan, 85, said in an interview today with Charlie Rose in New York. “The chances of Greece not defaulting are very small.”
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  Greek government bonds slumped, pushing the yield on the two-year note above 30 percent for the first time, as Prime Minister George Papandreou’s failure to win support for more austerity fueled speculation the European country will fail to meet its obligations. More than 20,000 people protested in Athens this week against wage reductions and tax increases, with police using tear gas on crowds and strikes paralyzing ports, banks, hospitals and state-run companies.
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  The chances of Greece defaulting are “so high that you almost have to say there’s no way out,” said Greenspan, who ran the central bank from 1987 to 2006. That may leave some U.S. banks “up against the wall.” Greece’s debt crisis has the potential to push the U.S. into another recession, Greenspan said. Without the Greek issue,“the probability is quite low” of a U.S. recession, he said. “There’s no momentum in the system that suggests to me that we are about to go into a double-dip,” Greenspan said.

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