PIGS = Portugal, Ireland, Greece, and Spain
The short of it is, they are screwed. They will soon face sovereign default.
This is the culmination of Keynesian economics. Keynes tried to spit in the face of common sense by saying you can spend your way to wealth. The current Greece financial crisis is reality smacking Keynes back in the face.
The Euro is going down, thanks to Keynesian stimulus and economics. Don’t let the rising dollar prices fool you. The Dollar is on a bubble right now. We are not that far behind.
For the world’s biggest economy, the US, the day of reckoning still seems reassuringly remote. The worse things get in the eurozone, the more the US dollar rallies as nervous investors park their cash in the “safe haven” of American government debt. This effect may persist for some months, just as the dollar and Treasuries rallied in the depths of the banking panic in late 2008.
Yet even a casual look at the fiscal position of the federal government (not to mention the states) makes a nonsense of the phrase “safe haven”. US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941.
Actually, Britain is ahead of us.