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Peter Zeihan, Stratfor VP of analysis/ European analyst, on investment fears surrounding Spanish and Italian markets and the Euro-debt crisis.
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Peter is I and is the vice president of analysis for -- war and focus is on Europe He joins us right now.
OK Peter are these fears and -- clearly the market especially this morning really worried about -- these fears -- found them.
At present they are certainly there's nothing in Spain that's going on right now political stability your budget deficit that's really in the danger zone present.
Why is it here Peter that it was in -- are -- talking about this earlier.
We seem to get beyond Europe and become more and more comfortable within with the situation there.
All -- and then every 345 weeks we -- almost this near panic.
Where we have a sell off in this country over something new and -- it doesn't appear to be anything that.
Well let me amend what I'm saying -- I don't see a crisis hitting Spain now.
In a few years and leave the demography of Spain is gonna change radically you normally have a big consumer boom in your twenties and the thirties.
And for Spain that happen at the same time that they entered the Euro zone during the 2000.
Well everyone's ten years older now so you had your boom in the two thousands -- now you've got a considerable amount of retrenchment.
But that's going to take at least a couple more years before it sets in.
As to why the we've had sixty years were all of the Europeans basically pulled money out of the German system to live large -- Well the Germans aren't allowing that anymore.
And so everyone's got to start to learn to trade on their own merits and for most of Europe.
Those are very good merits.
So does this mean Peter that we're going to see Greece happened all across the eurozone in a domino less backed.
That's gonna hit every single country showed on the map.
Probably not a domino effect but yes we're certainly gonna have a third fourth and maybe even fifth Greek bailout in the years ahead.
Spain will have to have one just just not today and Italy will probably have to have one as well Austria Belgium and maybe even France -- on the list.
And now that the bailout fund has been expanded incompetency you're going to be seeing banking bail -- across the entire union over the course of the next several years.
Peter I have bailout fatigue I have to tell you I have bailout thing.
Sixteen a from the United States I had bailout think if fatigue from all countries all across the globe that had been a part of it.
-- -- bailout fatigue do you think the markets are gonna gain some resistance are sent.
Thicker skin so that we're not seeing big -- in the same way that we have been seeing in in the last few months.
Well I'm not a -- Trader so I don't wanna speak for that community but what I can tell you is this.
The new bailout fund in Europe basically allows.
Indebted states and financial sectors to trade their pre existing debt.
For new sort of a eurozone bond that is ultimately backed by the German Economy.
So if the bond traders want to swap what they currently go to Spain for something that they go to the bailout fund backed by the Germans.
This in the -- could actually be a good thing injecting a lot more stability because you know it's ultimately backed by Berlin.
It is I and stat book thank you so much certain.
