Greece Again Holds the Attention of the Markets

In addition, Europe’s debt problems are unlikely to go away — earlier the vice governor of the People’s Bank of China, Zhu Min, said the Greek debt crisis was the “tip of the iceberg.”

Agreed. Right now the focus remains on Europe.

“This comment might well signal the point that we stop talking about a ‘Greek debt crisis’ and start talking about a ‘euro zone structural crisis’ instead,” said Neil Mellor, currency strategist at Bank of New York Mellon.

“In other words, the issue is no longer about Greek profligacy per se — in our opinion, it never has been — but, rather, about how the euro zone actually functions,” Mr. Mellor said.

As long as Euro zone cannot support structural deficits and money printing like the United States, it will be difficult to compete. This assumes, however, that structure deficits and money printing are sustainable models. History clearly suggests that they are not.

Source: nytimes.com