All us business people are following the PIGS crisis (Portugal, Italy, Greece and Spain). It is Mediterranean justice that is destroying the EU. The EU already had enough problems with Muslim immigrants, GDP basket cases from social welfare burdens and a 'vacation-or-a-strike is a full time right' worker mentality.
Just to give you a sense of proportion. The Greek GDP is about $350 billion, about 2% of the U.S., and the Greek government revenue is $140 billion, with about 40% of the population directly or indirectly on the government payroll.
Just the threat of government spending cut backs created chaos in Greece. Nothing like really cutting government spending by 40% which is required to bring the budget into balance if the EU and International Monetary Fund step in to give Greece three years to cut government spending. A 40% cut back, even over three years, would be the end of government in Greece. There is no way out. Maybe it is possible to kick the PIGS out of the EU, I doubt it. Watch the Euro fall back below $1.00.
The whole show is a farce and the rest of the PIGS are lined up to expand the disaster. All this was caused by the U.S. financial crisis which has brought every weak government to its knees. The U.S. Congress has no idea how to avoid this debacle in the future (see my earlier blogs (1) and (2) for a solution).
There are two ironies here: first George Soros is betting against the Euro along with many others. I hate to see Soros, who advocates exactly the same government expansion in the U.S., make a lot of money betting against his own ideas in Europe. Second, the very members of Congress who want to regulate short selling are the same members who have political ideas that are identical to the governments in the PIGS countries.
Short selling and derivatives (which grandstanding ignorant members of Congress oppose) is what told the world about the Greek problem and helped intelligent investors avoid loosing more retiree's money. Short selling and derivatives are betting that something the public believes in is wrong.