Greek Crisis Nothing New

Last week, government workers in Greece were marching through the streets chanting "thieves, thieves" to the industrialists and politicians that have robbed their nation blind. These workers would be experts on that, with their 13th- and 14th-month bonuses and early retirement.So the global banking crisis has arrived at the stage of the sovereign debt crisis. The economic fallout from a big financial crisis usually digs a hole in government finances as tax collections crater, write Carmen Reinhart and Kenneth Rogoff in This Time is Different. Typically, government debt will double, and the weaker governments will default on their debt as their interest rates skyrocket.It all starts with a boom in real-estate prices, or a one-time "bonanza" in technology or natural resources. Should people worry about the huge run-up in valuations? Not at all, say the experts. There's no need to worry. This time it's different.We are talking here about experts whom people take...(Read Full Article)

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