Greece, Italy, Puerto Rico, Spain, and Ukraine are the evidence (proverbial tip of the iceberg) of the much larger "sovereign debt crisis." Greece will undoubtedly default today on its loan to the IMF today. Puerto Rico (U.S. Territory) and Ukraine are threatening to default on its debt payments. Likewise, if Greece defaults, I believe Italy and Spain are next in line to follow. The world is heading into a global financial debt debacle that will be far worse than 2007/08 sub-prime mortgage crisis. In other words, lessons of the past have not been learned; and the world will repeat them.
All global debt levels are out of this world. Simply look at the U.S. with its $18+ trillion national debt, or the $1 trillion student loan debt, which approximately 90% is guaranteed by the U.S. government. And, what about the size of financial derivatives (credit default swaps -- debt)? According the Bank of International Settlements, these derivatives amount to over $700 trillion. I don't know about you, but I can not comprehend in my finite mind that size.
Along with the sovereign debt problem, global equity markets are grossly overvalued, which primed for a huge correction. But, before a major equity crash of over 50%, I believe the sovereign debt crisis will take "center stage."
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