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Greece, Spain, Italy: Countries On the Brink of Financial Collapse
Thousands of miles away, in Europe, their is real impending financial crisis on the brink of an abyss. Being Americans, we really don't care nor even know about it. Most think whatever happens there, in Europe, financially, has no direct impact here. Everyday we hear of Greece, the home of democracy, that is basically broke financially. It is hard to grasp what this means, exactly how does a country go broke? what happens then? How would this impact the US?
The last resort lender to these countries in peril of collapse is the IMF, International Monetary Fund. without the IMF, Greece would collapse. Anarchy and riots would occur from the general population (which have started).There is trickle down effect as governments cannot secure loans to pay for services, that cannot pay workers for the services and so on. The countries ability to attract outside business falters, its own monetary rating to get loans etc., is degraded, making it even harder.
The IMF is like a giant worldwide credit union. Members supply funding and the union lends it out. Members must pay into it. For Greece to get the life saving loan, they must agree to cut salaries and pensions.Greece will abide by the terms, the question is will the general public. same with Spain and Italy, both countries are not that far off behind Greece.
The real kicker for Americans is that the USA is the largest share holder in the IMF, 17%. Thus, the bulk of the money going to Greece is derived from US taxpayers. Japan and Germany is 6%, France and UK, 5%;Saudi Arabia is 3%, China, almost 4%. The US, for its part, loaned Greece $145 billion!!! Germany lended $29 billion. The IMF will loan Greece $250 billion so it can remain a functioning country. If Greece defaults on this loan, the IMF simply absorbs it.
The ripple impact of several European countries collapsing or requiring such money might force the IMF to collapse, as the all countries are having the same deficits, countries that collapse will wreck finanical markets, investments around the world impacting banks which will impact you at some point, whether directly or indirectly, just as the US housing collapse did.
Seriously, watch to see if there is a domino effect with countries in Europe, maybe there is a new world order closer than you think.