So Greece has been very bad, they’ve done something nutty over the past few years, they spent and they spent and guess what, they didn’t have the money to cover the checks. Now you may be thinking hey, haven’t we been doing the exact same thing, the answer is yes. However, Greece went a little bit cuckoo for Cocoa Puffs and their debt is excessive in comparison to our own. So, the European Union has developed a bailout plan and Greece has moved into austerity measures. Austerity measures is a very nice way to say we’re cutting services, upping your taxes and you’re not getting squat for it. It also certainly insures that unemployment will start to rise a bit,of course there have been street protests in Greece over the last couple of weeks. The real interesting question is how will this crisis impact the rest of Europe? Assuming everything else stays steady in Europe things will work out just fine, however if anything else goes wonky things could unravel badly for them.
So what else could go badly? Well the European housing market is not the most stable market in the world and there has just been significant political change in the UK. Oil prices have climbed up and look to be heading to near $100 a barrel this summer. Should that rise continue and oil make that type of climb it could have a chilling effect on the economy. It was $145 a barrel oil that helped hammer the global economy during the recent global debt crisis. Commodity markets also seem to be artificially propped up with people using the extremely low-interest rates that exist to gamble on commodities. This puts investors in a precarious position that could prove untenable.
Finally there are currently two global political issues that are quite dangerous. First, the ongoing situation in Iran and the impending sanctions that the UN have approved with the support of Russia, China and the US. The Iranian government is sitting on the edge of stability with a strong dissident movement in their country. They may try mustering nationalism as a cure for their internal political ills by trying to impact oil prices or launching a missile at Israel, either of these could have a very destabilizing impact on oil prices. The last and perhaps most dangerous current issue is North Korea, the South Koreans have accused North Korea of torpedoing one of their warships. The US has backed this assertion and the tough language that the South Koreans have undertaken. North Korea, as usual, has threatened war if new sanctions are implemented and folks, one day the crazy bastards that run that country are going to cut loose.
So we sit on the edge of one of those potential apocalyptic moments, not Armageddon mind you, but the type of apocalyptic events that could lead to a collapse of the global economy – global depression. This isn’t the first time we’ve been here, it won’t be the last, and we’ve been lucky before, so we probably will be again, probably. Besides sooner a later things have to go to shit, Glenn Beck needs the ratings!