The global contagion is spreading so quickly, it could strike the United States before year end.
It’s the same contagion that began over two years ago in Greece … that hit Ireland and Portugal last year … that slammed into Italy last month … and is now striking down a fifth country: Spain.
Think Spain is too small to be a major factor in our markets? Think again!
Spain’s economy is double the size of Greece’s, Ireland’s and Portugal’s COMBINED.
Spain’s total debts, including mortgages and commercial loans, are large enough to bankrupt all of Europe.
Even if the United States manages to escape a direct contagion attack for a while longer, the impact of Spain’s demise ALONE will explode on global financial markets with a mega-tonnage that’s many times larger than anything we’ve seen so far from Greece.
Worst of all, Spain has simply run out of time. Its death spiral is under way; its plunge into default, virtually unavoidable.
Here are the horrifying facts …
Spain’s unemployment has skyrocketed to 22.6 percent; and among workers under 25, to an astronomical 48 percent!
At least one million people are at risk of losing their homes — the equivalent of nearly seven million people in the U.S.
Homelessness and begging are rampant; labor strikes and street protests, endemic.
And now, the final blow: Global bond investors are dumping Spanish bonds like a hot potato, driving Spain’s borrowing costs through the roof:
Just in the last few weeks, as the contagion of fear struck Spain, global investors have dumped Spanish bonds in wave after wave of panic selling, driving their prices down and their yields to the highest level in euro history.
Result: The Spanish government now has to pay nearly five full percentage points more than Germany for 10-year money. That’s nearly quadruple the peak level reached during the 2008 debt crisis … and beyond the levels that triggered the collapse of Greece.
Worse, last week, the Spanish government suddenly found itself paying through the nose even for short-term money — a whopping 5.11 percent on its 3-month Treasury bills. That’s more than double what Spain paid just one month earlier … and over FIFTY times more than what the U.S. Treasury pays.
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