A Second Worldwide Financial Crisis is Coming
Jason Brizic
October 7, 2011
The Euro crisis is real and the Euro is doomed. This will trigger the next global financial crisis and worldwide recession.
<a href=”http://lewrockwell.com/north/north1039.html”>Busted Euro, Busted Dream</a>
The Eurozone is just beginning to implode starting with the PIIGS. Those governments made welfare promises that they can’t pay for (in Euros).
The PIIGS (Portugal, Italy, Ireland, Greece, and Spain) are running budget deficits above 3% of GDP. This violates EU rules. But the European bureaucrats are powerless to stop the violators. You can view this on the following graph. Only Estonia had a balanced budget as of last spring. Germany was slightly above the 3% limit.
http://www.bbc.co.uk/news/business-13366011
Greece will default first. That is obvious because one year Greek government bonds are yielding over 100%. Ireland will likely be next and then the rest of the PIIGS will tumble which have much bigger sovereign debts.
Do you want to see how small Greece is in the whole European debt crisis? Look at <a href:http://www.nytimes.com/interactive/2010/05/02/weekinreview/02marsh.html>this</a> from the New York Times back in December 2010.
The northern European banks lent trillions to the PIIGS. They will need massive bailouts that dwarf the previous bailouts. The northern European banks bought default insurance from the American banks. The US banks are exposed to the European soverign debt crisis also. The yield curve is flattening and we are going into a second recession. Plan accordingly. Read this site to sidestep as much of the calamity as possible.
There will be a time to buy high dividend stocks with earning power and strong balance sheets down at the bottom like in March 2009. But we aren’t there yet.
For more tips, go here:
http://www.myhighdividendstocks.com/category/tip-of-the-week
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