I don’t want to sound like a prophet of doom, and as an investor, I don’t want to sound pessimistic when it comes to the economy either. However it seems that the worst is far from over as there is another financial tsunami that may hit the world as badly as it did the first, the European financial crisis.
Of course it cannot be denied that the European financial crises have partly been caused by the United States’ subprime mortgage problem. Since Uncle Sam contracted the Flu, Europe has lost more than $ 300 billion in asset write downs. Banks has been bailed out, and big European countries have been injecting cash into their banking POS systems to increase liquidity in the hopes of averting a European financial crisis.
But the European financial crisis does not end there. Since Europe dropped its interest rates several years ago, it experienced a real estate boom all across the region which in turn led to the growth of the banking and construction sector. This growth is however heavily financed by loaned money. Sounds very familiar? Yes indeed, it just sounds like the American Sub prime mortgage bubble waiting to burst.
The European financial crisis may not be noticed right now as all eyes are still focused on the United States, but when the tsunami of the European financial crisis starts hitting our coast, we hope and pray that our financial institutions has enough prudence to warn stakeholders to stay away from the shores.
In the wake of the European financial crisis which may develop into a monstrous tsunami that is about to hit us, who is to blame? There’s nothing like a good laugh in times like these. Listen to this hilarious wonderful explanation in youtube by “financial experts” as to who is to blame for the European financial crisis most particularly the British financial turmoil involving the bank, Northern Rock.