Will The Euro Zone Recover Or Collapse?

It will collapse. Why? 22.6% of Spain's workers are unemployed and that number is growing. Spain is Europe's 4th largest economy yet 1/2 of Spain's young people are out of work! To put this in perspective, at the height of the 1930's Great Depression, U.S. unemployment hit 25%.

Unemployment is soaring as well in Portugal, Ireland, Italy and Greece and in Britain, the latter of which is not part of the Euro Zone. Scared investors are demanding higher interest rates to buy the bonds of those nations and in Greece, it is very difficult to sell bonds at all. These nations are so deeply in debt, they will have trouble even paying the interest on the bonds they already have. While the International Monetary Fund (IMF) and the European Central Bank are demanding that they slash their spending if they are to receive any further bailouts. Yet from the last spending cuts, their citizens are furious and taking to the streets, as their economies plummet. How bad is it? Europe is in its "most difficult hours since World War ll," stated German prime minister Angela Merkel.

What happens to the U.S. if the Euro Zone economies collapse? Giant European and U.S. banks are closely linked and if collapse comes on one side of the Atlantic, it will come to the other. Only unlike 2008, this time, as we are already witnessing in Europe, the magnitude of bailouts necessary are too great for governments and the Washington based IMF to absorb. These economies will sink and potentially take with them peoples' savings. Although most Americans are not yet aware of the full impact of a European financial collapse, they will become aware when their savings are jeopardized. We and our European brethren are in this mess together and we must do everything we can to help one another.

Dick
To learn more, please see: "Turmoil Spreads in Europe, Bond Market Selloff Hits Nations Seen as Healthy, Raising Specter of Contagion." http://online.wsj.com/article/SB10001424052970204323904577039490200567620.html