Thursday, July 28, 2016

Growing Insolvency of European Banks #BankingCrisis

Americans are simply unaware of the growing insolvency of European banks. While headlines only briefly discuss deteriorating balance sheets and mounting losses in Italian banks, they completely ignore a brewing banking crisis in Portugal (see below). Europeans, withdrawing funds under negative interest rates, are slowly pushing troubled banks towards insolvency. A global contagion or crisis begin once the majority, a day late and dollar short in terms of timing, recognizes that their deposits are legally next in line to be 'confiscated'. The ECB remains in complete denial that their negative interest rate policy is providing the fuel for the next crisis. Buckle up people!

Headline: People are starting to get seriously worried about the looming crisis in Portugal

Two big issues in Europe are dominating economic thinking: the UK's decision to leave the European Union, and Italy's litany of problems, including an ongoing banking crisis and a referendum that could topple the government.

However, there is another issue that is flying under the radar. Portugal.



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