Loading ...

What’s going on in Greece was not only predictable but inevitable. Now Portugal and Spain among others may join Greece’s biggest hurdle in more than 50 years.

No, I’m talking about indigestion after eating too many coneys, fat-laden Greek salads or someone spilling saganaki on a diner (ouch). What I’m talking about is D-E-B-T.

In one of the more fascinating books I’ve read, The Next 100 Years by George Friedman, Friedman outlines history from long ago and forecasts events that will take place in the next 100 years. I don’t know about you, but I’m not going to be around then, but the next 20 years is what this blog is about through the rest of the week.

Greece, Portugal and Spain are all part of the European Union (EU). While many readers most likely don’t know the countries included in the EU, knowing the significance of the EU is more important. For nearly 500 years, England and the European countries ruled the world.

If you think of the USA, we are a very young country and certainly younger than any country on the other side of the Atlantic. If you know anything about history, you know we fought many countries to gain the land needed to create the 50 states that make up the USA today.

And if you think of where the USA is located on the world map, we are the only country surrounded by both the Atlantic and Pacific oceans. This is one reason why acquiring both Alaska and Hawaii were so crucial: The USA controls the waterways through its superior Navy which means ultimate power. No other country can strike the USA by sea.

If you think we have problems today and think going back in time to “gentler and simpler” days would be better, pick a period of time that you would go back to. Truthfully, you would not find that time. Without laboriously reviewing World War I and World War II, the end result is what is significant.

Germany lost both wars. The USA is the country that provided the effort to win both wars. More significantly, neither war was ever on USA soil except for Pearl Harbor. This attests to our military strength, strategic abilities and why the USA is by far the most powerful country today.

After World War II, Europe was heavily damaged including Germany. Guess who helped them rebuild? Good guess. The USA. Guess who helped rebuild Japan after they attacked us? Good guess. The USA. The net effect of World War II was that England and Europe officially lost their power after 500 years. And if they were going to rebuild and survive, they had to do something.

One result was the formation of the EU. Fast forward and the EU decided that if they were going to grow up in the shadows of the USA, they had to create a common currency (the creation of the Euro), and have a national policy for emergency events. Unfortunately for the EU, they couldn’t come up with a plan for all countries to merge into one union like the USA so each country still has its own political system, police and so forth.

Germany is by far the biggest economic country but having lost two wars, the last thing they want to think about is another. France is second but they too had enough of wars. That is one reason why the USA is so involved with wars while other countries watch on the sidelines: They simply don’t have the wherewithal to be involved. Again, another reason why the USA is the most powerful and will be for at least another 100 years.

Fast forward to today and here is why Greece, Portugal and Spain debt issues matter to hairdressers, manicurists and in reality, everyone in the world. They are all part of the EU. The reasons why Greece is in debt don’t matter although government pensions will be the undoing of most governments including California’s. What matters is how the EU manages this crisis and most importantly, what Germany does. Germany needs to step up to the plate and fund most of it and so does France. They hate doing it and so far, haven’t committed. Not good, not good at all.

Greece is on strike since the government announced plans to cut pensions and cut costs so they can get the billions needed to survive. The unions don’t want any part of it so schools, airports and shops are closed. Civil wars are a possibility. And if this can happen in Greece, it can happen in Portugal, Spain and even California.

The future of the EU is critical to the USA, Japan and the UK. Any doubt of its survival will send shutters through Wall Street and Main Street. We haven’t seen anything yet. Bottom line: Germany and France must step in now and do what it takes. This is one mess the EU needs to handle without the USA’s support. Let’s see if they can clean this up while we clean up the Gulf of Mexico.

Happy Wednesday!