#trending

Wall Street markets are taking a nosedive this afternoon as the world struggles to deal with the growing European debt crisis. For the past few weeks it was Greece that caused world markets to tumble, but today it’s Italy.

The Economic Times reports

Italian bond yields shot up to 7.502 per cent, a new high since the euro was introduced in 1999, as investors unloaded the debt after a clearing house increased margin calls. Prime Minister Silvio Berlusconi’s promise to resign failed to persuade markets the country would deliver on economic reforms. 

“We just added another layer of uncertainty. The issue with Italy brings the region closer to a broader negative scenario and raises more concerns about a financial crisis,” said Bob Pavlik, the chief market strategist at Banyan Partners in New York

Earlier this year Portugal and Ireland both sought bailouts from the members of the European Union (EU), and member countries just worked out a plan to save Greece from peril. But Italy–who has the eurozone’s third largest economy–cannot easily be bailed out. It’s just too big.

CNN notes:

“But their powers may be limited when it comes to Italy. The numbers are huge, and the political – and financial – capacity to continue supporting the bloc’s weak will face a mighty test should Italy stumble.”

“The numbers are brutal. Italy’s economy makes up 17% of the eurozone. Combined, Greece, Ireland and Portugal – the countries currently living off Europe’s bailout fund and the International Monetary Fund – make up less than 6%.”

Italy’s Prime Minister, Silvio Berlusconi, is set to step down, but only after his country passes a new budget. Many have questioned his decision to delay his resignation and blame him for the current turmoil.

So what happens if Italy isn’t able to get its economic house in order? Well, letting Italy fail would plunge the Euro and the world markets into chaos. And economist say that the fragile world economy just can’t take the risk.

Have you been keeping up with the world financial markets and the  European debt crisis? What do you think?

 

Like Us On Facebook Follow Us On Twitter
  • Malcolm X

    I, for one, would say, “GOOD RINDANCE” should the world market collapse. Capitalism only serves The elite and the rich. In my opinon, socialism is the most humane system. There should be no private ownership of banks, etc. A system should serve everyone equally…just sayin’.

    Peace

    • Tiffy

      I kinda agree with you but if it does collapse things will get a hell of alot worse before they get better. This system needs to collapse but people need to understand when it does it isn’t gonna be pretty…

    • rosewater

      Tiffy so it would be better to continue on this horrible rollercoaster?! The only ones that will truly suffer are the super rich because they’ll finally get what they deserve! Their unbelievably massive debt will come home to roost! Either way, this is all going to come crashing down and soon….they can continue to prolong the collapse, or not make it be a sudden crash but it WILL happen….i can’t imagine the global economy we have now existing 20 years from now….

      and interestingly, most people are still completely unaware of what is happening….same as always….

    • rosewater

      was with you till you mentioned socialism…nah son…

  • Capitalism

    @Malcolm X – If you want socialism please move Venezuela! Let me know how it work out.

  • LemonNLime

    I think any who is trying to ride out this mess would be smart to invest in tangible commodities (gold and silver) because when fiat currency tanks, commodities grow. Don’t believe me look at how wealthy families kept their money for generations. I’m pretty sure Queen Elizabeth 1 didn’t hand down pounds to the current Queen Elizabeth, these are all families that own hefty commodities and it works for them because gold and silver always have value. Plus you melt it down for jewelry if you want!

    • edub

      Yep, and land.

    • rosewater

      anyone that can’t afford to do that should start stocking up on non-perishable food and water…actually everyone should….got to be prepared….it might sound over the top but the reality of the global economy is over the top scary and out of control….