With so much market talk about the Greek Debt Crisis, what exactly happened to cause such a huge impact on global markets?
A quick summary in my own opinion was that Greece being a developed country with a strong currency, they enjoyed a good credit rating, so they could borrow money cheaply (at low interest rates). However, the government over spent this cheap money and borrows more to repay the installment of the previous loans. So it seems like a ponzi scheme. Everything works fine until you are borrowing too much and get charge a higher interest rate on new loans. So, you have to borrow more to repay the higher interest, borrowing more means even higher interest rates and a vicious cycle starts.
Imagine borrowing from another loan shark an even bigger loan that charges a higher interest rate to repay an earlier loan taken up with a loan ......