Jennifer RyanAlex Tribou, Bloomberg: Here's What Defaults Did to Other Countries as Greece Teeters
History offers hints for Greece's future
By Friday, we may know whether Greece has reached a debt deal with its creditors. A failure could trigger a default and raise the prospect that it becomes the first country to leave the euro currency union.
The history of previous economic cataclysms suggests that changes in currency values can work as escape valves that quickly, though not painlessly, relieve pressure on an economy. Massive depreciations allow countries to become more competitive internationally, enabling them to draw back from the brink more quickly.
The charts below compare changes in exchange rates before and after four other disruptions that riled markets: Russia's default in 1998, Argentina's in 2001, the U.S. during and after the collapse of Lehman Brothers Holdings Inc. in 2008, and Greece's debt restructuring in 2012. For Russia and Argentina, defaults punished their currencies.
WNU Editor: These stats are just stats .... I experienced the Russian default directly .... it was not easy. Even though I was living in Canada at the time .... the hardships that I had to go through to make money here and to send it back to Russia to keep everything afloat and my family OK .... I still shudder when I think about it. This is what Greece is now facing .... and I do not think that they even know how bad the situation can really get.
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