Greek Debt and Mr. El-Erian

Mr. Mohamed A. El-Erian was recently discussing the Greek debt problem as reported by Bloomberg.com.

He stated that Greece is likely to default on their debt by 2013. Mr. El-Erian felt that, it’s in Greece’s interest to default “as long as you can contain the contagion to other countries and it is done through orderly restructuring and repricing to retain competitiveness.” I definitely agree that it is only a matter of time before the Greeks default, but I have a feeling that it will not be an orderly process. These kinds of things spread like wildfire and can be very difficult to control and keep orderly once they begin to happen.

Mr. El-Erian always seems to be in the news recently. He and Mr. Nouriel Roubini are now officially the twins of doom. I like both of these men, and I am kidding when I say this, but there is some truth to the statement. Mr. El-Erian calls it like he sees it. It is only a matter of time before the overleveraged countries pay for their mistakes. It happens to individuals and it will happen to countries. Greece may be first, but remember, there is line at the door to bankruptcy and default…and it “ain’t going to be purty at all.”