European Economic Woes Are Mounting

Despite repeated assurances over the last two years that the European economic crisis is under control and ultimately that interest bearing bailouts with strict financial controls were the answer, the Greek, Spanish and Italian economies continue their downward spiral, as do those in Portugal and Ireland. Why?

Because taking nations already unable to pay their debts and stacking more debt on them to pay the initial debts doesn't work. In fact, it defies reason. And as those nations' debts mount and strict financial controls further weaken their economies, they move closer to defaulting on their latest bailouts and on their outstanding bonds.

Understandably, no lender wants to take a substantial write off of its Euro debts but that is what is going to eventually happen in Portugal, Ireland, Italy, Greece and Spain, from lenders across the world. My heart goes out to everyone involved, but especially to those people in those nations who can least afford to bear the brunt of horrific economies, the children and the very senior citizens.

Dick
For a status update on this crisis, please see "New Europe Woes Hit Stocks: Investors Dump Spanish Bonds, Doubting an Austerity Move," The Wall Street Journal http://online.wsj.com/article/SB10001424052702303815404577335111619723768.html