The Economic Collapse
22 Signs That The Collapsing Spanish Economy Is Heading Into A Great
Posted: 29 Apr 2012 04:08 PM PDT
What happens when debt-fueled false prosperity disappears? Just look at
Spain. The 4th largest economy in Europe was riding high during the boom
years, but now the Spanish economy is collapsing with no end in sight.
When a debt bubble gets interrupted, the consequences can be rather
chaotic. Just like we saw in Greece, austerity is causing the economy to
slow down in Spain. But when the economy slows down, tax revenues fall and
that makes it even more difficult to meet budget targets. So even more
austerity measures are needed to keep debt under control and the cycle just
keeps going. Unfortunately, even with all of the recently implemented
austerity measures the Spanish government is still not even close to a
balanced budget. Meanwhile, the housing market in Spain is crashing and
unemployment is already above 24 percent. The Spanish banking system is a
giant, unregulated mess that is on the verge of a massive implosion, and
the Spanish stock market has been declining rapidly. The Spanish
government is going to need a massive bailout and so will the entire
Spanish banking system. But that is going to be a huge problem, because
the Spanish economy is almost 5 times as large as the Greek economy. When
the Spanish financial system collapses, the entire globe is going to feel
the pain and there will be no easy solution.
So just how bad are things in Spain at this point?
The following are 22 signs that the collapsing Spanish economy is heading
into a great depression….
#1 The unemployment rate in Spain has reached 24.4 percent – a new all-time
record high. Back in April 2007, the unemployment rate in Spain was only
#2 The unemployment rate in Spain is now higher than the U.S. unemployment
rate was during any point during the Great Depression of the 1930s.
#3 According to CNBC, some analysts are projecting that the unemployment
rate in Spain is going to go above 30 percent.
#4 The unemployment rate for those under the age of 25 in Spain is now a
whopping 52 percent.
#5 There are more than 47 million people living in Spain today. Only about
17 million of them have jobs.
#6 Retail sales in Spain have declined for 21 months in a row.
#7 The Bank of Spain has officially confirmed that Spain has already
entered another recession.
#8 Last week, Standard & Poor’s Ratings Services slashed Spain’s credit
rating from A to BBB+.
#9 The yield on 10-year Spanish bonds is up around 6 percent again. That
is considered to be very dangerous territory.
#10 Two of Spain’s biggest banks have announced that they are going to stop
increasing their holdings of Spanish government debt.
#11 Of all the loans held by Spanish banks, 8.15 percent are considered to
be “bad loans”.
#12 The total value of all bad loans in Spain is equivalent to
approximately 13 percent of Spanish GDP.
#13 Of all real estate assets held by Spanish banks, more than 50 percent
of them are considered to be “troubled” by the Spanish government.
#14 That total amount of money loaned out by Spanish banks is equivalent to
approximately 170 percent of Spanish GDP.
#15 Home prices in Spain fell by 11.2 percent last year, and the number of
property repossessions in Spain rose by a staggering 32 percent during 2011.
#16 Spanish housing prices are now down 25 percent from the peak of the
housing market and Citibank’s Willem Buiter expects the eventual decline to
be somewhere around 60 percent.
#17 It is being projected the the economy of Spain will shrink by 1.7
percent this year, although there are some analysts that feel that
projection is way too optimistic.
#18 The Spanish government has announced a ban on all cash transactions
larger than 2,500 euros.
#19 One key Spanish stock index has already fallen by more than 19 percent
so far this year.
#20 The Spanish government recently admitted that its 2011 budget deficit
was much larger than originally projected and that it probably will not
meet its budget targets for 2012 either.
#21 Spain’s debt to GDP ratio is projected to rise by more than 11 percent
#22 Worldwide exposure to Spanish debt is estimated to be well over a
Spain is going down the exact same road that Greece went down.
Greece is already suffering through a great depression and now Spain is
joining them. The following is from a recent BBC article….
“In Spain today, a cycle similar to Greece is starting to develop,” said
HSBC chief economist Stephen King.
“The recession is so deep that when you take one step forward on austerity,
it takes you two steps back.”
In Spain right now there is a lot of fear and panic about the economy. In
many areas, it seems like absolutely nobody is hiring right now. The
following is from a recent USA Today article….
“The situation is very bad. There’s no work,” said Enrique Sebastian, a
48-year-old unemployed surgery room assistant as he left one of Madrid’s
unemployment offices. “The only future I see is one with wages of €400
($530) a month for eight-hour days. And that’s if you can find it.”
But Spain is just at the beginning of a downward spiral. Just wait until
they have been through a few years of economic depression. Once that
happens, millions of people begin to lose all hope. A recent Reuters
article discussed the epidemic of suicides that is happening in Greece
On Monday, a 38-year-old geology lecturer hanged himself from a lamp post
in Athens and on the same day a 35-year-old priest jumped to his death off
his balcony in northern Greece. On Wednesday, a 23-year-old student shot
himself in the head.
In a country that has had one of the lowest suicide rates in the world, a
surge in the number of suicides in the wake of an economic crisis has
shocked and gripped the Mediterranean nation – and its media – before a May
And you know what?
The nightmares that we are seeing unfold in Spain and Greece right now are
just a preview of what is coming to most of the rest of the world.
The next wave of the economic crisis will soon envelop the United States,
Japan and the rest of Europe.
When it strikes, the pain will be immense.
But it won’t be the end – it will only be just the beginning.
The global financial system is starting to crumble.
You better get ready.
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