December 3rd 2010
Poor Portugal
Portugal, poor Portugal. They
aren't very broke, but they dont have any way of getting un-broke. Most
of the sovereign funds wont buy their bonds, which means the only
entities that will lend the government money want more interest to
cover the greater risk. The more the government has to pay in interest,
the less money they have to cover their debts and so they get more
broke. Things are not looking good.
To make matters worse, everyone thinks Portugal will collapse, so there
is almost a wall of will power forcing the country even further down
the pan. This is going to end badly.
The real problem as far as I am concerned is that it is going to make
my investments in the country go down in value. If things get really
bad the country will have to exit the eurozone. That will lead to an
immediate currency devaluation of about 30%.
I look around, and the locals just have long faces, but they aren't
putting their backs into it to get things to turn around. From one end
of the Algarve to the other is square mile upon square mile of derelict
land. There are hardly any farms. The land is just going to waste. It
is incredibly fertile land, and no-one is using it. No-one is fighting
for the old country. Instead they are waiting for handouts. This is not
my sort of country. I honestly think it has no future.
Okay, it is raining, and it has been raining for some time, and the
rain is forecast to continue for another ten days. Heck, I might just
as well be back in the wet UK. On the other hand, the UK is under
several feet of snow.
I dont just need to get out of the UK, I need to get out of Europe. I
get the feeling that the place is going downhill rather too rapidly,
and there has to be a rosier world on the other side of the planet.
If only it would stop raining. If only everyone would start to act
sensibly instead of borrowing money from people who dont have it in
order to pay it to someone else who also doesn't have it, and if there
isn't enough to go round, they all sit down and write each other a
bunch of IOUs. Bah! What a load of nonsense!
john
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