Europe’s financial contagion

Greece sneezed, and now most of Europe has a cold. The European debt crisis has already spread like a virus from Greece to Ireland, and other countries are now at risk: Portugal, Spain, and Italy are probable candidates for financial problems. Economists call this the “contagion effect.” How does this spread? Some of it has to do with confidence. When investors see one country encounter financial problems, they may doubt the health of other countries that seem to share economic or even political characteristics.

Contagion also has much to do with actual economic links among countries. Researchers have identified financial ties in particular as responsible for the “fast and furious” spread of crisis from one country to another. Trading activity between countries, however, can propagate economic sickness more slowly.

http://www.washingtonpost.com/wp-srv/special/business/financial-crisis-in-europe/

Food Riots 2011

The stunningly violent food riots in Tunisia and Algeria show just how quickly things can change.  Just a few months ago, these two northern Africa nations were considered to be very stable, very peaceful and without any major problems.  But now protesters are openly squaring off with police in the streets.  Many of the protesters are throwing "fire bombs" or are shooting fireworks at the authorities, and the police are responding with a tremendous amount of violence themselves.  In Algeria, several protesters have been killed by police and several others have actually set themselves on fire to protest the economic conditions.  In Tunisia, more than 100 people have been killed and the president of that country actually had to flee for his life.  But on a global scale, food shortages have not even gotten that bad yet.  Yes, food prices are starting to go up and food supplies are a little bit tighter right now, but much worse times than these are coming.  So what in the world are the cities of the world going to look like when we have a very serious food shortage?

Source: http://theeconomiccollapseblog.com/archives/food-riots-2011