Every day in the news we hear more countries in Europe are facing financial difficulties. How many people have forgotten about Greece which has been shoved to the background because of the new stories emerging? Their problems haven't suddenly gone away they just aren't newsworthy at the moment. In a couple of weeks when they are again due to run out of money they'll be thrust back into the limelight again.
The countries currently in the headlines are:
Germany - once thought to be the savious of Europe and the Euro have found themselves out of favour with investors and this week failed to sell their full 6bn euro bonds. They could only sell 3.6bn euros and that was for much higher interest rates than expected. With opportunities to resolve the European turmoil squandered and rumours circulating that Germany is printing deutchemarks in readiness for the fall of the euro it is no wonder there was a lack of confidence in buying German Bonds.
France - also squandered an opportunity to tackle the european crisis. Their banks more than any other country have large exposure to sovereign debt. Any default or break up of the euro would leave them vunerable to collapse. Rating agencies are looking carefully and France and their AAA rating is at risk. So France's attempts to sell French bonds was met with a luke warm market and interest rates were much higher than previous sales.
Other countries - in the headlings this week are Austria, Belgium and Latvia who all have banks in financial difficulties who are likely to need bailouts. Latvia nationalised it's bank but that hasn't helped stop the run on the bank in question
Europe is heading for recession and bar a miracle is probably already in recession and that will impact on Britain and other countries worldwide.
Today the FSA announced that banks need to have emergency plans in place inreadiness for the collapse of the euro. They went on further to say the euro could collapse within weeks. European banks are frantically trying to sell off assets so they have cash in hand to deal with the crisis.
And what about us as investors? Well, Britain is still a relatively good place to do business. Opportunities exist if you go looking for them. It is very much going to be every person providing for themselves and not relying on others to do it for them. Keep building those assets and you will have a better chance of surviving 2012.
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