RT crew caught in Athens tear gas chaos, slammed by Greek rioters

Unfortunately once we start cutting off government assistance, unemployment, food stamps and firing government workers this is what is also going to happen here in the United States. If you don't believe this can happen here just look at what has been happening in Wisconsin over changes in the collective bargaining rights of government workers.

First it starts with peaceful protests and sit-ins but it always ends in tear gas especially when people are scared and broke.

US is in even worse shape financially than Greece: Gross - CNBC -

When adding in all of the money owed to cover future liabilities in entitlement programs the US is actually in worse financial shape than Greece and other debt-laden European countries, Pimco`s Bill Gross told CNBC Monday.

Much of the public focus is on the nation`s public debt, which is USD 14.3 trillion. But that doesn`t include money guaranteed for Medicare, Medicaid and Social Security, which comes to close to USD 50 trillion, according to government figures.

The government also is on the hook for other debts such as the programs related to the bailout of the financial system following the crisis of 2008 and 2009, government figures show.

Taken together, Gross puts the total at "nearly USD 100 trillion," that while perhaps a bit on the high side, places the country in a highly unenviable fiscal position that he said won`t find a solution overnight.

"To think that we can reduce that within the space of a year or two is not a realistic assumption," Gross said in a live interview. "That`s much more than Greece, that`s much more than almost any other developed country. We`ve got a problem and we have to get after it quickly."

Gross spoke following a report that US banks were likely to scale back on their use of Treasurys as collateral against derivatives and other transactions. Bank heads say that move is likely to happen in August as Congress dithers over whether to raise the nation`s debt ceiling, according to a report in the Financial Times.

The move reflects increasing concern from the financial community over whether the US is capable of a political solution to its burgeoning debt and deficit problems.

"We`ve always wondered who will buy Treasurys" after the Federal Reserve purchases the last of its USD 600 billion to end the second leg of its quantitative easing program later this month, Gross said. "It`s certainly not Pimco and it`s probably not the bond funds of the world."

Pimco, based in Newport Beach, Calif., manages more than USD 1.2 trillion in assets and runs the largest bond fund in the world.

Gross confirmed a report Friday that Pimco has marginally increased its Treasurys allotment-from 4-5%, but still has little interest in US debt and its low yields that are in place despite an ugly national balance sheet.

"Why wouldn`t an investor buy Canada with a better balance sheet or Australia with a better balance sheet with interest rates at one or two or three percent higher?" he said. "It simply doesn`t make any sense."

Should the debt problem in Greece explode into a full-blown crisis-an International Monetary Fund bailout has prevented a full-scale meltdown so far-Gross predicted that German debt, not that of the US, would be the safe-haven of choice for global investors.

-Jeff Cox is co-author of the recently released "Debt Deficits and the Demise of the American Economy" (Wiley).

 
US is in even worse shape financially than Greece: Gross - CNBC -

Athens Mulls Plans for New Currency: Greece Considers Exit from Euro Zone - SPIEGEL ONLINE - News - International

Greece's economic problems are massive, with protests against the government being held almost daily. Now Prime Minister George Papandreou apparently feels he has no other option: SPIEGEL ONLINE has obtained information from German government sources knowledgeable of the situation in Athens indicating that Papandreou's government is considering abandoning the euro and reintroducing its own currency.

Alarmed by Athens' intentions, the European Commission has called a crisis meeting in Luxembourg on Friday night. The meeting is taking place at Château de Senningen, a site used by the Luxembourg government for official meetings. In addition to Greece's possible exit from the currency union, a speedy restructuring of the country's debt also features on the agenda. One year after the Greek crisis broke out, the development represents a potentially existential turning point for the European monetary union -- regardless which variant is ultimately decided upon for dealing with Greece's massive troubles. 

Given the tense situation, the meeting in Luxembourg has been declared highly confidential, with only the euro-zone finance ministers and senior staff members permitted to attend. Finance Minister Wolfgang Schäuble of Chancellor Angela Merkel's conservative Christian Democratic Union (CDU) and Jörg Asmussen, an influential state secretary in the Finance Ministry, are attending on Germany's behalf.

'Considerable Devaluation'

Sources told SPIEGEL ONLINE that Schäuble intends to seek to prevent Greece from leaving the euro zone if at all possible. He will take with him to the meeting in Luxembourg an internal paper prepared by the experts at his ministry warning of the possible dire consequences if Athens were to drop the euro. 

"It would lead to a considerable devaluation of the new (Greek) domestic currency against the euro," the paper states. According to German Finance Ministry estimates, the currency could lose as much as 50 percent of its value, leading to a drastic increase in Greek national debt. Schäuble's staff have calculated that Greece's national deficit would rise to 200 percent of gross domestic product after such a devaluation. "A debt restructuring would be inevitable," his experts warn in the paper. In other words: Greece would go bankrupt. 

It remains unclear whether it would even be legally possible for Greece to depart from the euro zone. Legal experts believe it would also be necessary for the country to split from the European Union entirely in order to abandon the common currency. At the same time, it is questionable whether other members of the currency union would actually refuse to accept a unilateral exit from the euro zone by the government in Athens.

What is certain, according to the assessment of the German Finance Ministry, is that the measure would have a disastrous impact on the European economy. 

"The currency conversion would lead to capital flight," they write. And Greece might see itself as forced to implement controls on the transfer of capital to stop the flight of funds out of the country. "This could not be reconciled with the fundamental freedoms instilled in the European internal market," the paper states. In addition, the country would also be cut off from capital markets for years to come.

In addition, the withdrawal of a country from the common currency union would "seriously damage faith in the functioning of the euro zone," the document continues. International investors would be forced to consider the possibility that further euro-zone members could withdraw in the future. "That would lead to contagion in the euro zone," the paper continues.

Athens Mulls Plans for New Currency: Greece Considers Exit from Euro Zone - SPIEGEL ONLINE - News - International