A recent report by ING concludes that a fully-fledged disintegration of the euro zone would cause the worst economic crisis in modern history and could devastate every country in Europe. The trouble is even allowing the club-med countries to exit the Euro does not solve their solvency problems, nor the troubles for the rest of the world who hold their debt.
Similar systemic risks abide in the mounting insolvency of many US cities and states. It is important to realize that the US and the Eurozone are roughly the same size (approx. 14 trillion in GDP each) and represent the two largest economies in the world. Weakness in these regions effects every economy on the planet. (It pains me to post Kudlow, but this segment is a good discussion on this point:)
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