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The Greece Affect

September 5, 2012 – 5:09 pm

A recent study of Greece’s economy showed that well over 10% of their GDP is lost to corruption and a thriving underground economy. Also, it pointed out, the problem is growing. With recent cuts in their government spending on tax collection and fighting illicit trade it will only become a bigger problem. This is a failed system. Have you noted the ECB and the IMF never mention the corruption? Shouldn’t addressing that issue be important considering the size and the amount of money being lent to a failed system?

It is hard to believe that anyone really expects Greece to remain in the EU. I suppose it is possible but frankly the public in Europe is at a point that they will not support further aid and if their leaders keep it up they will be voted out.

If or when Greece leaves the EU the impact on the rest of the world will be minor. In the U.S. stock prices might buckle for a day or two or even a week or two but no long term lingering effects will be felt. The EU appears to be moving to build a ring fence around other countries like Spain and Italy and at the same time pay lip service to keep Greece afloat for the time being. Once the core of Europe is secure Greece will be history.

Good Trading
Steve Peasley

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