Devastating Consequences of The Crisis in The Euro Zone

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In moments of panic and pessimism, the quotations of financial instruments exceed the gravity of the situation. Here are some devastating consequences of the crisis of government debt that investors will anticipate.

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    • Greece enters into bankruptcy (default) most banks will go insolvent and will be nationalized, it will return to their own currency which will depreciate over 50% for euro-denominated debt.Depending on the chaos in Greece, Portugal will decide whether to follow the same path, most likely. Ireland is in a delicate situation, the ECB does not want to save the banks, but they can not let it fail because it would affect all European banking system. Finally, Iceland and Ireland will adopt the strategy will detach from the banking system.

    • Euro area saving can support small countries, but Spain is too big to fail. Banks have hidden problems in the past and the continued decline of the real estate market will collapse the banking system. Unemployment reached 20% will continue to grow, the people will revolt against austerity measures and against the government, financing in the region grow and become a global crisis: declining stock markets and the euro down begin.

    • European Central Bank became insolvent due to high exposure to government debt and the banking system in Greece, Ireland, Portugal, etc.. Major European governments, Germany and France, the ECB will decide whether to recapitalize or will allow the printing of money to save, even if it is somewhat illegal. Some of these countries banks will suffer losses and will be nationalized. Germans, French or Dutch will be persuaded to share the pain of the Greeks, Irish, Portuguese …

    • European institutions will record losses of hundreds of billions of dollars of debt the Member States. Holders of bonds will not be paid interest due to the explosion (now 17% in Greece, 10% in Portugal, Ireland and more than 5% in Spain) and will go to court or try to do their own right because no one I will listen. Riots are dim and the European Union region risked dismemberment.

    • It will take drastic austerity measures to be strongly challenged by population, will be a real carnage in financial markets, a liquidity craze that escapes who can. Society loses confidence in its currency and abandon, prices are rising and savings evaporate. In short, we are witnessing the biggest bubble in history: that of government debt. What happened to the dollar in the last 12 months, repeat with the Euro now. However, we are in a period when paper money worth less and less to start and monetary system loses credibility. The bad news is that we are only just beginning. A replica of the great recession of 2008 is coming, but how strong will, we’ll see.

  • European institutions will record losses of hundreds of billions of dollars of debt the Member States. Holders of bonds will not be paid interest due to the explosion (now 17% in Greece, 10% in Portugal, Ireland and more than 5% in Spain) and will go to court or try to do their own right because no one I will listen. Riots are dim and the European Union region risked dismemberment.

  • It will take drastic austerity measures to be strongly challenged by population, will be a real carnage in financial markets, a liquidity craze that escapes who can. Society loses confidence in its currency and abandon, prices are rising and savings evaporate. In short, we are witnessing the biggest bubble in history: that of government debt. What happened to the dollar in the last 12 months, repeat with the Euro now. However, we are in a period when paper money worth less and less to start and monetary system loses credibility. The bad news is that we are only just beginning. A replica of the great recession of 2008 is coming, but how strong will, we’ll see.

  • Image via Wikipedia

    Image via Wikipedia

    Image via Wikipedia

    Image via Wikipedia

Read more: http://quazen.com/news/devastating-consequences-of-the-crisis-in-the-euro-zone/#ixzz1NylMAKkP

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