[Gocamino] Sobre La Crisis Mundial

[Grant Spangler]

Sobre La Crisis Mundial..

Spain and Italy must be watching what's happening in Greece and asking 
themselves whether they want to go through this whole process of 
negotiating for bailouts via austerity measures.

Both countries have already had a small sampling of the austerity measure 
medicine. Spain recently implemented a meager 19€ billion in austerity 
measures while Italy passed 30€ billion in austerity measures in 2011...
 hardly a drop out of their respective 1.06€ trillion and 1.5€ trillion 
economies.

Yet, even these tiny moves resulted in protests and riots. One can only 
imagine what Spanish and Italian politicians are thinking as they witness 
the widespread civil unrest, country-wide strikes, and economic depression 
that have occurred in Greece as a result of that country's full commitment 
to the EU's austerity measure demands.

Spain's official Debt to GDP is only 64%, but its private sector debt is 
at an astounding 227% of GDP. And the Spanish banking system is leveraged 
at 19 to 1 (worse than Greece).   

Moreover,the country is already experiencing an economic Crisis with an 
unemployment rate of 20+% and an economy that has been contracting since
 mid-2011 (in fact Spain's GDP just actually went negative in the first 
quarter of 2012)...

So... we must consider that it is highly likely the option of simply defaulting 
is being discussed at the highest levels of the Spanish and Italian government. 
Should either country decide that austerity measures don't work and it's simply 
easier to opt for a default, then we are heading into a Crisis that will make 
2008 look like a joke.

Well, Spain just woke up and smelled the coffee:

Premier Mariano Rajoy has refused point blank to comply with the austerity 
demands of the European Commission and the European Council (hijacked by
 Merkozy).

Taking what he called a "sovereign decision", he 
simply announced that he intends to ignore the EU deficit target of 
4.4pc of GDP for this year, setting his own target of 5.8pc instead 
(down from 8.5pc in 2011).

With condign symbolism, Mr Rajoy dropped his bombshell in Brussels after 
the EU summit, without first notifying the commission or fellow EU leaders. 
Indeed, he seemed to relish the fact that he was tearing up the rule book 
and disavowing the whole EU machinery of budgetary control.

So... if you still think the Greek PSI matters in any way, you're not thinking 
past the next 24 hours. Spain has just told the EU to "shove it." Having seen 
Greece enter a depression and get pushed around by Germany and France for two 
years, Spain's just told the EU that it's not going that route.

So... if Greece, whose economy is roughly the size of Massachusetts, nearly 
took down the European banking system... what do you think will happen 
when Spain decides to it doesn't want to play ball and would rather just
 default.

Fuente: www.gainspainscapital.com

Buen Camino,
 
Grant
 
http://www.ElCaminoSantiago.com
Resources for the Pilgrimage Road to Santiago