The Greeks have voted "no". Portuguese, Spanish and Italian bond yields are rising very quickly, meaning investors are dumping these bonds out of fear that the populations in these countries will also reject austerity, and refuse to pay their debts. The European Central Bank will no doubt start to print money to buy these bonds to drive prices up and yields down, maintaining the illusion of calm and normalcy.
Portugal's next legislative elections are from September 20 to October 11, 2015. Spain's next parliamentary election is on December 20, 2015. In both countries, anti-austerity political parties (the Socialists in Portugal who implemented austerity in 2010, but who have had a change of heart, and Podemos in Spain) were leading public opinion polls earlier this year. The economic contagion that could be unleashed on the world's economies following years of mismanagement by the world's central banks could be triggered by the democratic rejection of the banker's "solutions" starting first in Greece, but later in Portugal then in Spain. From the perspective of the future of the equities markets, the stage may have been set for what could be a very significant "Year of Change" rivalling 1929, 1987, and 2008.
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