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August 5th, 2011, 14:33
The three most obvious powder kegs are Spain, Italy, and the US. Spanish or Italian problems will make Greece look like peanuts and shake the entire EU, and those convulsions will hurt the rest of the world too. The US economy is stagnant and plagued by uncertainty due to a political deadlock over budget problems that should be solvable, putting investment and employment on hold.

The BRIC countries dont yet have quite the domestic demand and purchasing power to make up for problems in the west. China made it through the last crisis thanks to a massive Keynesian spending binge and has it's own debt crisis.

Originally Posted by Maylander View Post
It could look like it. Given the situation in various countries (Greece etc), it'll probably vary greatly from country to country. Scandinavia will most likely not be affected too much. We got through the last one without too much trouble (Norway was almost unaffected).
Norway was and is pretty unique due to a chronic labour shortage and a strong oil industry.

Sweden and Finland OTOH are small extremely export-dependent countries (whose economic trajectories are like Germany on steroids during bear and bull markets alike). The manufacturing sector was hit pretty hard during the last crisis. Luckily domestic services and retail held up, but unemployment still went up above 10% for a short while.

Our recovery was faster since we already went through the kind of painful restructuing process that the US and Southern Europe needs in the 90s, making domestic fundaments sound. A new international downturn will hurt us badly again though
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