Will China and Japan Follow Germany’s Tough Love with Greece?
German Chancellor Angela Merkel said she would not provide a final decision on bailing out Greece “until the International Monetary Fund works out a plan of cuts with Greek government.” Merkel said Germany’s bailout of the defaulting Greece is contingent on Greece’s acceptance of “tough” budget cuts and fiscal policy.
Is this a foreshadow of what China and Japan will demand from the United States? Although the US has not defaulted on their incredibly high debts to the nation’s largest creditors, both China and Japan hold a similar power as Germany when it comes to threatening to diversify out of inflating US dollars.
The US faces major monetary issues with 0% interest rates, trillions of dollars of debt, and an imminent crisis with Social Security and Medicare. If you want a glimpse of the back room negotiations between the US and its larges creditors, play close attention to the demands Germany makes on the Greece.