When the penny finally drops there will be a mass panic

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This topic contains 5 replies, has 4 voices, and was last updated by Profile photo of angie angie 4 years, 1 month ago.

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  • #57130
    Profile photo of Anonymous
    Anonymous
    Participant

    Many people are holding on and hanging in there in the hope that Spain’s economic problems have bottomed out and the economy will stabilise but the crash that started in Spain in 2007/2008 is just the warm-up and the real crash or the main event will occur in 2015 when it becomes impossible for Spain to remain in the Euro any longer.

    It may be possible to keep Greece in the Euro because it is a small country with a small economy but Spain is just too big to save because it is a much bigger economy and has a bigger population. Crazy as it may seem there is a possibility that Spain may leave the Euro before Greece. Spain’s weak economy will require a weaker currency and the Euro is just far too strong a currency, reflecting the industrial strength of Germany. As long as Spain remains in the Euro it cannot devalue its currency to help exports and it cannot print money in order to stimulate demand. Being in the Euro will eventually prove to be too much of a straight-jacket for Spain to be in and Spain will have no choice but to leave the Euro and adopt the Peseta.

    Once people begin to realise that is it inevitable that Spain will drop out of the Euro there will be a mass panic of people withdrawing money from their bank accounts and putting their properties up for sale. There has already been a massive flight of capital out of the country on fears of a exit and many people have withdrawn money from their bank accounts and have put it into German banks or are keeping the money at home for fear that their savings in a Spanish bank will be converted to worthless Pesetas. People who own property in Spain will see the writing on the wall and will not want to be in possession of a property that will be valued in Pesetas and they will be desperate to sell their properties before Spain leaves the Euro, resulting in a flood of properties entering the market.

  • #113246
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    Investors return to Spain as Surplus reaches record.

    http://www.bloomberg.com/news/2012-10-30/spain-narrows-central-government-budget-deficit-to-4-39-.html

    Spain posted its second current account surplus in the euro’s history and foreign investors increased their holdings for the first time this year, helping Prime Minister Mariano Rajoy’s campaign to resist a bailout.

    but some way to go yet..and there are risks

    “The data has improved a lot but I wouldn’t get too excited,” Jose Carlos Diez, chief economist at Intermoney SA in Madrid. “Portfolio investment is coming in, but it depends on ECB bond-buying and rating agencies” not downgrading Spain.

  • #113250
    Profile photo of angie
    angie
    Spectator

    Oh dear oh dear, according to Reuters who did a poll of 44 analysts (all wrong no doubt we will be told) Spain’s Manufacturing shrinks for the 18th month in October and at the fastest pace since July 🙄 🙄

  • #113251
    Profile photo of katy
    katy
    Spectator

    Marcos is working hard on the keyboard today…perhaps he is trying to bury the bad news out of Spain today 😉

  • #113252
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @katy wrote:

    Marcos is working hard on the keyboard today…perhaps he is trying to bury the bad news out of Spain today 😉

    Never heard of bookmarks?
    Believe me there is a ton of good news, not just the great current account surplus figures, nor the record September tourism spend I could reproduce…
    But you’re only interested in gloom and doom, which is why you will only link to those stories (and yes they exist too).
    If you really believed your own negative propaganda, all you need to do is short the Spanish major companies on the Ibex over say 3 months. You’d be stinking rich Katy (if you are not already), easy money! After all you’re convinced things can only get worse.

  • #113253
    Profile photo of angie
    angie
    Spectator

    Nessy, every time someone posts any news to balance your good news stories you keep referring to suggesting doing some deals on the Ibex which seems irrelevant on Spanish property, surely people are posting here generally to find out the current situation with Spanish property and what implications could impact one way or another with the constant flow of negative financial and unemployment figures etc.

    Yes there is some good news in some sectors of Spanish matters but I think most informed analysts would say that current woes would make investing now either unsound or maybe someone knows something the rest of the Eurozone and economists don’t know 🙄

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