by John Galt
May 20, 2012 08:20 ET
Finally, at least one of the banksters of the world has provided some degree of honesty about this mess over in Greece. The threat of the Grexit was enough to turn the debut of Facebook on the NASDAQ into FacePalm creating a concern that the entire world economy is teetering on disaster. From an article in the Athens News yesterday:
If Greece leaves the euro zone it could detonate a global financial crisis even worse than the 2008 credit crunch, dry up global trade financing and spur another U.S. recession, former Mexican central bank governor Guillermo Ortiz said on Friday.
“There is no legal exit clause for a country that wants to leave the euro zone, so if it occurs, it is going to be necessarily traumatic, and have global repercussions,” Ortiz told Reuters at a banking conference in the Mexican resort of Acapulco.
“Of course this will affect us as the consequences of Lehman’s bankruptcy affected the world, only this will probably have an even bigger impact,” he said.
The refreshing blast of honesty of just how severe a small nation defaulting and exiting the Eurozone was not offered by the Federal Reserve, Bank of England, ECB, or any major U.S. financial institution, but by a former governor of the Mexican central bank who amazingly enough nailed just how brutal such an exit would be in his statements above. The problem with the Grexit is that by downplaying the impact the central banks and world financial community is hiding the impact of the various derivative instruments which are being ignored if the Eurozone and ECB were to take a massive hit due to a Greek default. The European Union and G8 banksters are playing with Greek fire and refuse to let the masses know the upcoming risks or dangers.
Just remember this one important fact:
In 2008, the same “experts” said Lehman and Bear Stearns would have minimal impacts on the U.S. and world economies because “it’s different this time.”