By Gail MarksJarvis
China and Greece depressed American savings in 401(k)s and college and retirement accounts this week and then healed much of the loss by the weekend.
Is it over?
Perhaps for awhile, but that doesn’t mean over for good.
Trepidation over Greece eased Friday when it looked like it would get an emergency European bailout this weekend. China calmed after its government wrapped a tourniquet around a hemorrhaging stock market that’s been bleeding away the savings of regular Chinese people caught up in a recent stock market mania.
Since Greece has the potential to infect all of Europe, and since China is the world’s second largest economy, there is little distance between the overseas economies and U.S. turf. So if the week’s episodes flare again, the U.S. stock market and, consequently, American retirement accounts will surely feel it.
WHAT YOU NEED TO KNOW ABOUT GREECE
Greece is in a worse depression than the U.S. Great Depression. It cannot repay more than $300 billion in debts, 25 percent of workers are unemployed and 50 percent of its potential young workforce is without jobs. The economy has shrunk 25 percent in the last few years.
Many wealthy Greeks have moved their wealth out of the country. Banks would be bankrupt if it weren’t for the aid they’ve been getting, and that aid is about to cease unless Greece agrees to conditions Europeans want to impose.