by Stephen McPhie, CA
Partner, RSD Solutions Inc.
There’s a giant game of chicken going on and many are predicting that it will end up with Greece exiting the Euro and returning to the Drachma. This is seen as likely to lead to disaster for the Eurozone and many others, but especially for Greece. However, there is a simple way to make it beneficial for all. Why should Greece return to the Drachma? If Greece is first out, the name “Mark” is going spare. An announcement that Greece will adopt the Mark as its currency would calm markets and lead to a dramatic reduction in Greek debt yields ……….
OK, totally crazy and irrational I know. But if rationality had anything to do with things, there likely would not have been a Euro in the first place. Even if there had been, it’s a racing certainty that Greece would not have been a participant. Politicians running currencies and economies is a bit like the animals running the zoo. One thing we can rely on is a mess and sub optimal outcomes. I hope your risk management systems and processes have this assumption.
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