as with the Mavins, there's the PIGS, or rather PIIGS and PIIGGS.
Greece is a problem – but Spain could destroy the euro
http://www.independent.co.uk/news/business/comment/sean-ogrady-greece-is-a-problem-ndash-but-spain-could-destroy-the-euro-1958682.html
What are the risks? The euro itself could break up, though probably not because of Greece.
Spain however, is the fourth largest eurozone economy and quite another matter, and there are particular causes for concern. Her devolved government makes cuts difficult to impose; her labour market is dangerously inflexible; and the maturity of her debt is the shortest of the PIIGS, so that debt repayments are more frequent. Spain is simply too large to be rescued by France and Germany, and a Spanish crisis would mark the end of the single currency: the euro's last monument will be rows of unfinished apartment blocks on the Costa del Sol.
Beyond that the most serious danger is that the market for government bonds issued by the PIIGS will just freeze up. Greek debt is practically valueless, because there are few real buyers.
In this sense, what is happening is similar to the sub-prime crisis, credit crunch and financial crisis of 2007 and 2008 that led to the Great Recession. Investors are unable to judge whether these countries will be solvent, just as they doubted whether Bear Stearns, Lehman Brothers and the rest of them could honour their debts.
Then, as now, there is the same tendency of markets to seek out the next victim. And, then as now, there is the same sluggishness on the part of governments to take urgent action, with, one fears, incalculable consequences.
If the trillion of euros worth of Spanish, Irish, Greek, Italian and Portuguese government bonds become devalued then those who hold them will lose money. And who are they? French and German banks are rumoured to hold a lot of Greek government bonds, and UK banks have approaching €100bn (£86bn) of lending to entities, private and public across the PIIGS. Pension funds also hold the bonds, as do investment funds, while banks are required to hold them as reserves.
If the banks – already fragile – around Europe suffer further losses through the usual domino effect, then that will reduce their lending to home owners and businesses over here, too. Let us not forget that Alliance & Leicester, Bradford and Bingley and Abbey are owned by Banco Santander, one of Spain's largest institutions.
The last thing the world needs is another financial crisis – but this time without the governments being able to issue debt to bail them out with. Britain will be badly harmed by the crisis engulfing our largest export market and source of investment funds. Our banks will undoubtedly also be victims of a renewed loss of faith.
It will hurt – after all, we are hardly in the best of economic health ourselves.
via :
http://singsupplies.com/showthread.php?t=59014Monday, January 4, 2010
( Note: Not to be taken too seriously ! )
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11 Big Surprises for the Next Decade
1. The Collapse Of The Euro- With Germany having such a different economy than the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) the weaker economies of the Euro region had a choice- to leave the Euro or to suffer massive deflation (since prices where too high and devaluation impossible due to the fact that they didn’t have control on the currency). Massive deflation meant budget deficits north of 10% of GDP and with no monetization possible the sovereign debt market of the PIIGS started to collapse. Like after the collapse of Lehman Brothers, the collapse of Greece caused a general panic in the markets, with government bonds of the rest of the PIIGS collapsing since it was clear that Germany will not bail them out. European banks refused to lend to each other and the havoc was over only when the rest of the PIIGS left the currency.
2. China Bluff Exposed - China's communist regime continued to print money, lending it to everybody that wanted and didn't want it. The giant housing, infrastructure, and manufacturing bubble came to a violent crash when the debts where not paid and inflation forced the authorities to tighten despite massive unemployment. The combination of high inflation and high unemployment in the urban centers took the people to the streets.
3. Despite China's Collapse Commodity Prices Turn Up Again- Just a year after China's colossal bust commodity prices resumed their up trend. General scarcity combined with large physical deficits and money printing worldwide caused commodity prices to go up despite a weak world economy. Investors an eventfully the public started to seriously question the legitimism of fiat currencies around the world.
4. Pakistan Collapses- The nuclear state falls victim of various terrorist groups who eventually succeeded in overthrowing the regime. The country falls into a bloody civil war. The U.S military, in a planned operation which was planned during the Bush years takes control of the military facilities and dismantles them. The civil war affects India, which increasingly suffers from terrorist attacks throughout the decade. The collapse of Pakistan symbolizes a new phase in the global "War on Terror" with the pro- American Gulf States becoming the main target.
5. A Third Party Emerges In The United States- When Obama's first and last term ended the American public was fed up with anything that had to do with the elite- Wall Street, the big banks, Congress, the Senate, the Federal Reserve and both of the big parties. As a result a third party emerged which managed to get a large amount of seats in both houses. The party's candidate for president got 25% of the votes in 2012 and won the election in 2016.
6. Top Officials in the Federal Reserve Criminally Investigated- A silent change that started after the financial collapse of 2008 gained momentum with the bill to audit the Fed. After the bill was approved everyone could know who got all the money that Ben Bernanke printed during the great panic days of 2008. The public was outraged and demanded an investigation of the Federal Reserve.
7. The Dollar remains strong via foreign fiat currencies but loses to gold, eventually the United States and then the world goes back to a Gold Standard- First it was the collapse of the Euro, then the collapse of China, after came the crisis in the emerging world and the commodity producing nations, and finally civil unrest around the globe. In the second decade of the 21st century the world discovered that the United Stated, with all its problems and weaknesses is still the safest heaven there is.
8. The internet moves to live broadcasting, TV stations and cable networks follow the fate of newspapers- During the second decade of the 21st century the technology of broadcasting the PC output on the flat screen TV created a whole new communication environment. Ten of thousands of broadcast where uploaded on the net on a daily basis allowing the web surfers to choose between thousands of news programs, financial and economic broadcasts, home made reality show, and local sitcoms.
9. The United States Remains World's Strongest Economy- In the second decade of the 21st century the United States was suffering. The economy was stagnating and was bouncing in and out from recessions and depressions. The military was involved in countless wars, and the personal and economic cost became unbearable.
10. Japan's Government Bond Market Implodes- The Japanese government and economy got used to record low interest rate. But the combination of government debt reaching 230% of GDP and the ageing population cashing in via the pension funds on the government bonds cause a total implosion. In only 2 month the yield on 30 year government bond went up to 4% causing a panic selling and forcing the government to finally cut the deficit.
11. New Economic Term Developed, A Yo-Yo depression- Throughout first 15 years of the 21st century investors and economists where debating heavily upon the economic environment. Is it deflation, inflation, stagflation or hyperinflation? Eventually, a new term emerged- Yo-Yo depression which describes an economic environment in which the economy moves violently every year or so from inflation to deflation.
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http://israelfinancialexpert.blogspot.com/search/label/predictions%202010
via : http://singsupplies.com/showthread.php?t=49960
via :
http://www.celicasg.org/index.php?topic=4973.msg72795#msg72795PIGS, PIIGS and PIIGGS are acronyms that originally referred to the economies of Portugal, Italy, Greece and Spain (PIGS). Since the financial crisis of 2007–2010, Ireland[1] (PIIGS) and, more recently, the United Kingdom[2][3][4][5][6][7] (Great Britain, PIIGGS) have become associated with the term.
via :
http://en.wikipedia.org/wiki/PIGS_(economics)
[tags] PIGS PIIGS PIIGGS
