I can easily see how we will slide into the 2nd part of the Sovereidn Debt Crysis.
I think Europe willl survive this one, they can still do helicopter money to the people and Sovereign Debt financing trough printing. Cancel Cash, introduce 10% tax on all accounts, bail in banks and put taxes on real estate. But then next time in the 3rd part of the Sovereign Debt Crysis i think Europe will blow up, the latest by 2040. So im moving my investments and myself to Asia at this point. Countries to watch because of falling tourism: Portugal, Greece, Croatia, tourism23%GPD and those are also fundamentally weak anyway and have bad bad government management. After those get hit and maby they bail out their economy then the Sovereign Debt Crysis can continue. And after those then people will look at Spain and Italy (15% tourism of GDP) Italy has the potential to become the next Greece, failed country. Iceland also touristic but no euro no EU and good management. Countries to watch because of early signs of decline, they were already weak going INTO 2020: Lithuania, Romania, and those are also structurally very very weak countries. Feel free to look up the most leveraged tourism companies, hotels in those countries ;) Wuhan Flu is an influenza, which would have gotten rid of the unfunded-pensions problem. But the shutting down of the economy for a good 2 months and stopping the issuing of VISAS to tourists will REALLY destroy the european economy for this year! And after were trough with that then the companies cant pay loans back to the banks and we get that whole cascade again, Italys banks are already bankrubt TODAY they just need someone taking a close look to spook everyone. Germans Deutsche Bank and Commerzbank will obviously go up in flames, that bailout will get bumpy and hairy. Spanish banks are fucked too as they are linked to South American revenue. There collapsing currencies of Brazil and Mexico (oil producers) against the dollar will also cause huge problems with debt repayment. There are so many zombie companies already even in germany that just survive because of cheap corporate debt. Good luck ECB in stemming that tide. This Crysis will really hit the economy and the little people, so i can imagine the amount of populism in the next election being high. Some crazy people will get elected. Also good to keep in mind, after 2010 China printed a lot and 40% of growth since then came from China, Germany and Switzerland are big exporters to China suddenly. So what will come to the rescue this time?? India? By the way some other countries that are really vulnerable are: all the oil producers, also dont forget Angola, Nigeria, Mexico, Brazil, Colombia Turkey, Lebanon, South Africa, Indonesia, I dont know enough about China, but watch their municipalities and corporate debt |
AuthorPascal |