News Summary: How Greek shock waves could hit US

AP News
Posted: Jun 15, 2012 2:01 PM
News Summary: How Greek shock waves could hit US

PREPPING FOR GREECE: Bankers, governments and investors are preparing for Greece to stop using the euro as its currency, a move that could spread turmoil throughout the global financial system. An election on Sunday will go a long way toward determining whether it happens.

WELCOME BACK: If the government resurrects the old Greek currency, the drachma, foreign-exchange experts expect it would plunge to half the value of the euro soon after its debut. For Greeks, that would likely mean surging inflation.

WORST-CASE: A full-blown crisis would start in Greece, quickly move to the rest of Europe and then hit the U.S. Stocks and oil would plunge, the euro would sink against the U.S. dollar, and big banks would uncover losses on complex trades.