It has been a bit tough sorting through the hype and trying to determine how realistic the problems are with the PIIGS (Portugal, Italy, Ireland, Greece and Spain) but, unfortunately, hype itself is part of the problem. When you are perceived as being a problem, you tend to become one whether you like it - or deserve it. Part of Greece's problem is simply the fact that it is part of the EU and lacks a good bit of the flexibility it needs to deal with its issues, and the EU is not being a whole lot of help at the moment. I tend to think the problems in Greece and the other PIIGS is a bit overblown but it is not going to help them much if investors believe - or speculators try to create - that a more significant problem exists.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a0Oazi.lUlZU&pos=2
And while I think we will find a way to get over the PIIGS and their issues, there is a bit of a bubble building in China over which few outside of China have any say and which may prove quite problematic. The lending in China is escalating and bubbles thereby created are worsening. One of the key bubbles there is a real estate bubble and, guess what, the government there owns all the land. All these people are buying whatever is left on 100 year leases from the government and doing so like there is no tomorrow. This is in a country that is not used to dealing with bubbles. We will see.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a.JuXwStmOLE&pos=4
Disclosures: None
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Rome set the example to modern Germany of making war profitable. In the half-century following the fall of Carthage, fifty million dollars in tribute and plunder drained into Rome. This sum gave a great opportunity to energetic men.
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