And the situation reminds me too of events leading up to the Wall Street crash that lead to the Great Depression. Financiers managed to reverse the downward plunge by buying as many shares of stock as they could, but the house of cards came crashing down as people panicked in October 1929.
In this case the European solution has been cash bailouts and buying government bonds. But buying bonds is just the same things as increasing debt. Someone eventually has to pay it back.
Where has it all gone wrong, we ask ourselves. In Ireland, Portugal, Spain and now Greece the same thing has happened. Countries are like dominoes collapsing one by one.
Do we blame the banks for their profit-taking over the years, or their customers who took advantage of easy loans to live lives they couldn’t afford?
Tim Mansfield is a 30-year global veteran in the real estate industry and Founder and CEO of Sydney-based buyers’ agents PrimePropertyBuyer. You can follow Tim on Twitter by clicking here.