Good conversation over dinner last night with a bunch of non-executive directors of ASX companies (hosted by PWC). Especially interesting was a discussion about Greece, the latest economic acronym PIGS* (Portugal, Italy, Greece & Spain) and where the debt contagion may go next (See House of Crads Blog entry below).

The worry, obviously, is that it’s all a house of cards. If Greece were to fall over, Portugal would probably topple next. Neither of these countries really matters because they are too small, but the ripple effect could move to Spain and then Italy and these are big economies.

We then had a brief discussion about wild cards and there were a few good lines flying around. One (which I also saw in the Wall Street Journal) was that “the biggest wildcard of them all is uncertainty itself.” Quite.

Apparently at one point I also said that “the secret of the future lies in the fringes of the present”. I can’t quite believe that I said this because it’s far too eloquent for me, but after a few glasses of nice wine I suppose anything is possible.

Another great debate was over peak oil and whether or not price rises are inevitable. If they are not, what are the wild cards? Collapsing global or Asian demand is obviously one, switch from oil to gas for transport is another and we also have new energy technologies of course.

One final thought on Europe by the way. When the EU put the Euro together did anyone build a scenario around a member nation going bankrupt? I remember that back in 2005 I built a set of scenarios for a bank, along with Ross Dawson and Oliver Freeman, and the EU falling apart was one of our wildcards – along with systematic financial system collapse!!!

One wildcard I think I’d add as of today is not Greece withdrawing from the Euro (almost impossible) but that Greece or some other member state pulls out of the EU in order to then extract themselves from the Euro. The betting is probably that if anyone were to do this it would be one of the PIGS, but I there is another scenario that came up last night. What if Germany just gets fed up with supporting these member states and Germany itself decides to pull out?

Now that’s the kind of wildcard I like — highly unlikely (almost impossible) but staggeringly impactful if it did ever happen. Makes your head spin.

* Sometimes it becomes PIIGS with Ireland added too.