Historian Niall Ferguson: Greek Situation Akin to a ‘Financial Cuban Missile Crisis’
- Posted on June 15, 2012 at 11:26am by
Becket Adams
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Speaking during an interview on Bloomberg TV, noted historian and Bloomberg regular Niall Ferguson explained that the upcoming Greek elections could destroy what little stability is left in the 17-nation union and that eurozone leaders should prepare for their own “Lehman moment.”
“If there’s going to be a Lehman moment in the crisis, it’s going to be next week,” he said, adding that the “game of chicken” between Germany and Athens won’t end until Greece’s ruling party is decided.
He continued:
It‘s not clear who’s going to blink at this point. My guess is that, in the end, there will be a bit of blinking on both sides. This is the financial equivalent of the Cuban Missile Crisis. And the missile is really a bank run, which ultimately even the Germans can’t be completely immune to.
Not that there will ever be a run on German banks, but the effects of a bank run right across Southern Europe are going to be felt by the economy. German policymakers know that; they’re just having to say one thing to their own voters and another thing privately to other European leaders.
However, Ferguson believes that Greece will probably remain in the eurozone and that leaders might find some sort of common ground following the weekend elections. But that’s not to say that Ferguson has much faith in the EU’s financial structure, that is, in its central banks.
“In the end, the central banks can’t do this on their own,” Ferguson said, referring to Thursday’s central bank-fueled market rally.
“And I think for the markets to assume that this can be fixed by yet another round of quantitative easing or whatever you want to call it — LTRO [long-term refinancing operations] — I think that’s not realistic, because this is no longer just about liquidity. It’s about the solvency of governments, the solvency of banks,” he added.
(H/T: BI), front page photo source: Eamonn McCabe
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65Plus
Posted on June 15, 2012 at 1:04pmForcing Italy to borrow at 7% to give $10B to Spain at 3% is not a good system. It WILL crash – perhaps next week. Our insane Bernakes will have US finance it all. Get rid of the UnConstitutional Fed. the Founders put in the “gold and silver” clause for a very good reason.
Report Post »lukerw
Posted on June 15, 2012 at 1:25pmRob Peter to pay Paul; Play Robin Hoode… they living in a Nightmare and DayDreaming of Miracles!
Report Post »Dougral Supports Israel
Posted on June 15, 2012 at 12:56pmI don’t think the real question is if Greece will stay in the Eurozone, it is how long will the Eurozone be solvent? Greece is dependent on the rest of the Eurozone to maintain their lifestyle. They will not give that up even if they have to agree to some amount of austerity.
In true European fashion the other countries will let the Greeks cheat and the negative cash flow will continue. Meanwhile the same faux austerity will be taking place in Spain and Italy and debt will mount. As much as they try to keep kicking the can down the road it will soon be kicked no farther and then the end will come.
Report Post »Mutiny
Posted on June 15, 2012 at 12:07pmThe problem is at some point people are going to realize that the money is fake. There is nothing backing it. Once this happens as it has happened though out history the economies are going to collapse. Since we are now a global market, the whole thing is going to collapse.
What will emerge from the ruins of our failed economies will be a global government. Other nations will not be brought up to our standard of living, we will be brought down to theirs.
Report Post »Hollywood
Posted on June 15, 2012 at 1:12pmCollapse is certain, at some point. This, of course, will usher in a NEW worldwide digital currency system, as PREDICTED in Revelation. Included will a unversal I.D. system,also Predicted in Revelation Chapter 13. This I.D. sytem will be based on 666, as stated. Anyone think the fact the UPC codes ALL are BRACKETED by three 6s is just coincidental ???
Report Post »nurseheidi
Posted on June 15, 2012 at 1:44pmHollywood,
Report Post »They already slid through the Real ID act that is supposed to take effect in January 2013. Microchips for all via National ID/DL card. This info needs to get out so we can tell them “we will not comply”!
http://www.realnightmare.org/ this is a link to a site sponsored by the ACLU…haha. They don’t like it for a different reason.
hauschild
Posted on June 15, 2012 at 1:49pm“The problem is at some point people are going to realize that the money is fake. ”
Well, one would hope, but so far, it hasn’t happened, and I’m beginning to think it never will. Face it – liberals loathe reality and facts – they will never admit anything they wouldn’t care to believe.
Report Post »grickm
Posted on June 15, 2012 at 11:56amSorry to say that Mr Beck got this wrong on radio today. He repeatedly said Mr Ferguson “expected” the Lehman moment next week, whereas Ferguson actually said IF it will happen, it’s likely to be next week. In fact, Mr Ferguson was relatively optimistic about Greece staying in the eurozone.
Report Post »lukerw
Posted on June 15, 2012 at 12:54pmPeople do Stupid acts & say Stupid things… until Failure is Obvious!
Report Post »RLTW
Posted on June 15, 2012 at 11:56amNiall is a very smart guy, but it sounded to me as if even he is unsure. It’s still a lot of if Germany does this, if the banks do that, uncertainty.
I still love when he slapped down Mika last year, I could watch that every day and still laugh.
Report Post »tmz42
Posted on June 15, 2012 at 11:52amWow; this is a very substantive post Sue. Do you ever exercise your mind? Did you forget to take your Meds today?
Report Post »lukerw
Posted on June 15, 2012 at 11:51amBasically… France, England, & Russia looted Europe after WWII… and the US rebuilt it!
Socialism is a Failure, built upon Ideology not Evolution… but they believe that it should work, without any Evidence. The EU is Bankrupt… and it is trying to suck the US into it’s demise.
Report Post »lukerw
Posted on June 15, 2012 at 12:56pmSaid otherwise: NIALL IS A POOR HISTORIAN!
Report Post »wkw58
Posted on June 15, 2012 at 11:50am…..just wait and see. The deck of cards is already collapsing. Take off your blinders Troll.
Report Post »jakartaman
Posted on June 15, 2012 at 11:49amWow do these Guys get paid for this?
What did he say.
Greece and Berlin will both blink
Greece somehow will stay in the Euro
Quantitative easing by itself will not be enough
Thank you very much – Where do I pick up my check on the way out?
Report Post »Tal-El
Posted on June 15, 2012 at 11:44amProblem is much more fundamental than that:most people in the West do not produce anything of value, but they all live like they do. This cannot last.
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