Clearly, any default in Greece will be felt right here at home. Is this the beginning of the next global credit crisis?
Baltimore, MD (PRWEB) June 22, 2011
Everyone’s talking about a Greek loan default… how it could set off a new global credit crisis. But here’s an alarming fact you probably haven’t heard: Americans who haven’t Greece-proofed their finances stand to lose a bundle.
That’s because the American financial system is now directly linked to the Greek economic disaster.
Consider these facts:
· U.S. banks have approximately $41 billion of direct exposure to Greek debt.
· About 12% of loans made by the top U.S. money market funds were made to three enormous European banks all in risk of downgrade, according to the Wall Street Journal.
· Big U.S. banks have been lending generously across all of Europe – about 29% of their total loans in the last 2 years.
Clearly, any default in Greece will be felt right here at home.
Is this the beginning of the next global credit crisis?
The biggest fear …even according to one of its own board members… is that the European Central Bank could become insolvent. It’s already lending double the amount any sane government organization should. And a default on Greece’s $270 billion debt to the ECB could send the institution into bankruptcy.
This could be the straw that breaks America’s back just as it made some progress recovering from the last global financial crisis. Because once the cracks start to show in Europe, it’s only a matter of time before the damage hits U.S. shores.
Protect your savings… You can learn all the details on the Greek debt debacle in Money Morning’s latest report, “The Next Global Credit Crisis: Why U.S. Banks And Greek Debt Will Be The Toxic Trigger.”
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