Greek default to take all of Europe into economic abyss

Many large banks are massively overexposed to derivatives contracts. Interest rate derivatives account for the biggest chunk of these derivatives contracts, Michael Snyder wrote in an article for the economiccollapseblog.com. The notional value of all interest rate derivatives contracts outstanding around the globe is a staggering 505 trillion dollars. What is worse, the United States holds an incomprehensible amount of the national debt on the level of 18 trillion dollars, Pravda.Ru reports.

Also read: The truth about the real size of the US national debt

When this derivatives bubble finally bursts, there won't be enough money in the entire world to bail everyone out. The Greek government announced that it would default on a loan payment that it owes to the IMF on June 5th. Greek bond yields will thus soar into the stratosphere as panicked investors flee for the exits.

If Greece defaults despite years of intervention by the EU and the IMF, it will mean that there is no nation in Europe that is truly safe. Italy, Spain, Portugal, Ireland and all over the rest of the continent will face very serious economic problems. By the end of it, we could be faced with the greatest interest rate derivatives crisis that any of us have ever seen.

Read article on the Russian page of Pravda.Ru