Spain, Italy and their internal regions have such a large level of debt that the financial crisis could escalate to the point that it pushes the euro project over the cliff.
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New York, NY (PRWEB) August 07, 2012
In a recent Investment Contrarians article, editor Sasha Cekerevac notes that the financial crisis in Europe is worsening each day, investor confidence is lacking, ten-year bond yields in Spain are surging to record interest rates of 7.6%, and Spain has made matters worse and further aggravated investor confidence by enacting a short-selling ban—a move, Cekerevac says, is futile.
“The worry is that Spain is the fourth largest economy in the eurozone; this is not a small nation like Greece, but a significant contributor to Europe,” observes Cekerevac. “Spain, Italy and their internal regions have such a large level of debt that the financial crisis could escalate to the point that it pushes the euro project over the cliff.”
Even with a short-selling ban, which Cekerevac says has historically never accomplished anything, if the underlying investments are poor, investors will continue to avoid making any investments and the price will continue to decline.
“If there was a short-selling ban placed on Research In Motion, would that miraculously fix all of its problems?” questions Cekerevac. “Of course not, because investor confidence would still be poor.”
The reason why Spanish assets are going down is not because of short-sellers, Cekerevac argues, but because the actual assets themselves and the nation have lost investor confidence and credibility in the claim that they will survive this financial crisis.
“Spain’s problems will not be fixed by preventing short-selling, as investors will continue to dump their holdings until a solution is enacted to prevent the complete collapse of the nation as the financial crisis spreads,” concludes Cekerevac.
To see the full article and to get a real contrarian perspective on investing and the economy, visit Investment Contrarians at http://www.investmentcontrarians.com.
Investment Contrarians is a daily financial e-letter dedicated to helping investors make money by going against the “herd mentality.”
The editors of Investment Contrarians believe the stock market and the economy have been propped up since 2009 by artificially low interest rates, never-ending government borrowing and an unprecedented expansion of our money supply. The “official” unemployment numbers do not reflect people who have given up looking for work and are thus skewed. They believe the “official” inflation numbers are also not reflective of today’s reality of rising prices.
After a 25- to 30-year down cycle in interest rates, the Investment Contrarians editors expect rapid inflation caused by huge government debt and money printing will eventually start us on a new cycle of rising interest rates.
Investment Contrarians provides unbiased research. They are independent analysts who love to research and comment on the economy and investing. The e-newsletter’s parent company, Lombardi Publishing Corporation, has been in business since 1986. Combined, their economists and analysts have over 100 years of investment experience.
Find out where Investment Contrarians editors see the risks and opportunities for investors in 2012 at http://www.investmentcontrarians.com.
George Leong, B. Comm., one of the lead editorial contributors at Investment Contrarians, has just released, “A Problem 23 Times Bigger Than Greece,” a breakthrough video where George details the risk of an economy set to implode that is 23 times bigger than Greece’s economy! To see the video, visit http://www.investmentcontrarians.com/press.