Barack Obama Promises That Events In Greece And Puerto Rico Will Not Cause A Global Financial Crisis

Michael Snyder:  Barack Obama says that we shouldn’t be alarmed by what is happening over in Greece.  On Tuesday, he told reporters that this “is an issue primarily of concern to Europe” and that “I think the markets have properly factored in the risks involved“.  And apparently Obama is not too concerned about the debt crisis in Puerto Rico either. 

In fact, the Obama administration has already completely ruled out any sort of federal bailout for the island.  Barack Obama is assuring us that everything is going to be just fine and that we are not headed for another global financial crisis.  So is he correct?

I had to smile when I saw a Politico article today with the following headline: “Barack Obama on Greece: meh“.  While admitting that this crisis is likely to be “very painful for the Greek people”, Obama just doesn’t seem to be impressed by the threat that this crisis poses to the global financial system as a whole…

President Barack Obama downplayed the threat that Greece’s debt crisis poses to the American economy, saying that the Hellenic Republic’s problems would create more woes for the European continent than the United States.

“In layman’s terms, for the American people, this is not something we believe will have a major shock to the system, but obviously it’s very painful for the Greek people, and it can have a significant effect on growth rates in Europe,” which can “have a dampening effect” on global economy, the president told reporters during a joint press conference with Brazilian President Dilma Rousseff.

And Obama also told reporters that he is working with authorities over in Europe to make sure that any “bumps that occur” along the way are “smoothed out”…

But should there be a so-called Grexit — or Greek exit from the European financial community — Obama added that “it is important for us that we plan for any contingency, that we work with the ECB and other international institutions to ensure that some of the bumps that occur in the financial markets are smoothed out.”

So should we trust Obama?

Do the authorities actually have everything under control?

On Tuesday, Greece became the first developed nation in decades to miss a debt payment to the IMF.  A referendum on the latest creditor proposals is scheduled in Greece for Sunday, but the government is already urging citizens to vote no.  But a no vote would almost certainly result in any future aid from the EU and the IMF being cut off, and it would also probably mean that Greece will have to leave the euro.

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