- Existing debts would remain denominated in Euros. In that case, there would be a colossal wave of defaults, since the value of these debts in terms of devalued Drachmas would soar. This is basically what happened to Dollar-denominated borrowers in emerging markets in 1982 and 1998.
- Existing debts would be denominated in Drachmas. In that case, these debt burdens would be lighter. However, there would be huge losses on these debts for foreign investors, and also domestic investors in real terms.
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Formerly a chief economist providing advice to institutional investors, Nathan Lewis now runs a private investing partnership in New York state. Published in the Financial Times, Asian Wall Street Journal, Huffington Post, Daily Yomiuri, The Daily Reckoning, Pravda, Forbes magazine, and by Dow Jones Newswires, he is also the author – with Addison Wiggin – of Gold: The Once and Future Money (John Wiley & Sons, 2007), as well as the essays and thoughts at New World Economics.
See the full archive of Nathan Lewis articles.
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