Taking Back America!
Write this down -- soon you will tune into the news and it will be “all Spain, all the time.” By this summer (and maybe sooner) Spain will be on everyone’s lips. You will wish you never heard of Spain. Spain could take us all down.
We just celebrated the anniversary this month of the sinking of the unsinkable Titanic.
Spain is the new Titanic. It’s already hit the iceberg and is sinking fast.
Only 1,500 died when the original Titanic sunk. Spain's sinking could kill entire economies, destroy millions of jobs, affect billions of lives, drown us all in debt.
Americans are perhaps the hardest working people on earth. We work so hard many of us pay no attention to “little things” happening in our own town, or in our own country, let alone half a world away. This time we better pay attention. This time “the little stuff” will become big stuff very quickly, and it is very bad.
Spain is about to become a gigantic problem for the entire world. Unlike Greece, Spain is too big to fail, but also too big to bailout. The economic news out of Spain is very, very, very bad news for all of us. With emphasis on the “very.”
The reason Spain is so important is because size matters.
Greece is a tiny country, yet its default threatened to destabilize and destroy the entire EU economy. To prevent that default the geniuses who run the EU “saved” Greece by loaning her another $170 billion to paper over her existing $100 billion in debt.
What a “miracle.” -- You owe $100 billion, someone gives you $170 billion. Now you are buried in almost twice as much debt, even though you couldn’t pay the original debt. With friends like this, who needs enemies?
But Greece is a tiny country. Spain is a big country. In fact, Spain boasts the twelveth biggest economy in the world. There isn’t enough money in all the EU to save Spain.
The real question is…is there enough money in all the world to save Spain?
Will U.S. taxpayers agree to mortgage our children’s and grandchildren’s future (already buried in our own debt) to try to save Spain?
Spain is in horrible shape.
The country's economy is hanging by a thread off a cliff the height of the Grand Canyon. And the thread is fraying.
Spain's unemployment is fast approaching 25%. It currently stands at 22.85 percent. That’s reported unemployment. Which means if we used real numbers, not manipulated numbers provided by government (just like the ones we use in the U.S.), it might well be closer to 40 percent.
Even worse, unemployment among young adults (25 and under) is 51%. And, this is all before their real estate falls off a cliff. Spanish real estate hasn’t even fallen as far as U.S. real estate- yet.
Are you getting the picture? Disaster looms. All the money in the world can’t save Humpty Dumpy.
But we haven’t even gotten to the real problem yet. Debt is the big issue. Not just government debt, but private debt, corporate debt and bank debt. While government debt is reported as 60% of GDP, when you count "off the books" obligations the real number is closer to 100%.
Many thanks to my favorite economist, John Mauldin, for pointing out the raw truth. As bad as government debt appears to be, private debt is the earthquake that should frighten every reader.
Spanish private debt is 220% of GDP -- meaning that for every dollar produced in the entire Spanish economy, there is $2.20 in private debt.
This is unprecedented. This is cataclysmic. This is unfathomable.
Get the picture?
Earlier this week the proverbial "you-know-what” hit the fan. The investment community caught wind of last month’s banking numbers -- Spain’s banks are in big trouble. Their borrowing from the EU Central Bank DOUBLED last month.
What does this mean? Spain’s banks are crippled. Walking corpses. They are bankrupt. Insolvent. Surviving only on emergency funds from the EU welfare fund. And since we’ve already established this is no small country like Greece, who has the money to bail out Spain and her big banks?
The answer is NO ONE.
The choices are sad, frightening and tragic.
Does the EU choose to let Spain default in order to save the rest of the EU? Or does the EU bail out Spain’s banks by taking massive risks with more taxpayer money?
Does Spain bail out her own banks? If so, who bails out Spain?
Is Spain the proverbial “canary in the coal mine?” Who will be the next to go? Portugal? Italy? France? Can Europe be saved?
If the EU goes down, can America survive? Lots of questions; unfortunately few answers.
There is one lesson in this mess. Spain is a financial train wreck because of the exact same agenda that President Obama is trying to stuff down America’s throat.
Spain went from prosperous to a disaster because of big government, big spending, big taxes, big entitlements, big unions, big pensions, free health care, billions wasted on green energy, and, don’t forget, billions more on high speed rail.
Size matters. And bigger isn't always better.
The golden lining in this entire mess is that we now have a model to save America. It’s simple. Do the exact opposite of everything Spain is doing. And, again, remember that size matters. Bigger isn't better -- not when it comes to the size, scope and power of government.
The question is, is it too late? Have Obama and his progressive cronies already won?
If not, another four years of Obama rule will surely sink America in a Titanic disaster unlike any the world has ever seen.
Wayne Allyn Root is a former Libertarian vice presidential nominee. He now serves as chairman of the Libertarian National Campaign Committee. He is the author of "The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gold & Tax Cuts." For more, visit his web site: www.ROOTforAmerica.com