Spain’s trillion-euro economy is much larger than the three countries that have already received bailouts, making its problems much more worrisome for European leaders. Bailing out Spain itself would likely stretch the eurozone’s finances to the breaking point because the Spanish economy is the fourth largest in the 17-country eurozone, behind Germany, France and Italy. A full-blown Spanish bailout including its public finances would hurt growth in Europe, the United States and Asia by creating losses and fear among banks, which are key to the functioning of the global economy, and by hurting trade. Many US companies get a sizeable part of their sales and profits from Europe so a recession there would impact companies and economies around the world. Even US mutual funds have an average 3.6 percent of their assets invested in European stocks. Because many European governments are already overburdened with debts, rescuing their failed banks risks bankrupting some of them. The banks, in turn, own huge amounts of their governments’ bonds. The result is that any fall in confidence in either the banks or the government tends to create a downward spiral requiring more foreign financial aid. The fear is that once Spain is forced into a bailout, other countries such as Italy would follow suit, adding further pressure on the eurozone…
This Financial Debt Crisis is Global and now more than ever it is extremely important that you be mentally and financially prepared for the worst.
Bob Wick Recommends Leveraging Your Money
If you have savings, 401k, IRA, stocks or other investments you should know exactly where to put you money today for the best possible returns.
That being said, in order to make the best financial decisions possible during this “Global Financial Debt Crisis” you need to be educated on how we ended up in such bad shape in the first place. Read More