[Gocamino] Sobre La Crisis Mundial

[Howard Mendes]

Either path, extreme austerity or a major default, is fraught with huge adverse consequences for Spain.  I find this very unsettling.  Howard Mendes. NYC



-----Original Message-----
From: Hathor821 <Hathor821 at aol.com>
To: GASpangler <GASpangler at hotmail.com>; gocamino <gocamino at oakapple.net>; saintjames <saintjames at yahoogroups.com>
Sent: Sat, Mar 10, 2012 3:10 pm
Subject: Re: [Gocamino] Sobre La Crisis Mundial


Thanks Grant for sharing this with us! 
 
Scary...this is what happens when politicians think with their  kidneys.
 
;)
Patricia de Miami
 
 
In a message dated 3/10/2012 12:35:55 P.M. Central Standard Time,  
gaspangler at hotmail.com writes:


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 




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