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SHOULD INVESTORS TRUST SPAIN?

During the last years investors have trusted Spain so that Spain could borrow. money in the international market. This last days the situation is terrible as investors are fleeing to safer heavens as German bonds.

But are right the investors to flee Spain?

Well, here I will try to discover if investors can trust Spain or not.

In order to do that let us imagine that Spain is just a neighbour. Imagine you have different neighbours and you wish to lend money to some of them. Besides having a Spanish neighbour you also have a German neighboor.

So the obvious way to see if you can trust your Spanish neighbour is to go to the house of your Spanish neighbour …

THE HOUSE OF THE SPANISH NEIGHBOUR

Well, first of all, let me tell you that the first impression will be that the Spanish neighboor is millionaire: you will see that it has the house full of Picassos, Goyas, Dalis and some paintings from Velázquez, Goya, etc.

Another thing that you may notice is that in the Spanish flat you will find the parents and their songs and daughters all in the flat. This is due to the fact that most of the family is jobless. So while the paintings tell you of wealth the fact that the songs ans daughters are jobless may make you scare as money is not entering much the Spanish flat.

While you stay in the Spanish flt you will realise that they have a lot of football cups.

Another thing that you may realise is that the Spanish neighboor has two neighboors: one is a Portuguese neighboor and another is a French neighboor. This should make you see that the Spanish neighbour is much aware that it could end like the Portuguese neighboor and at the same time that the Spanish neighbour can be envious of the French neighbour and try to do all it can in order to be near the level of the French neighbour.

So, as you move through the Spanish flat you will see that the house is not in bad state but that no much money is entering the flat. So you may not be sure about what to do.

Maybe the best would be to know the Spanish neighbour in depth. Should you really trust them? Will the Spanish neighbour do all it can to return back the money you could lend him?

As you may not be sure if the Spanish neighbour could return back the money as not much money is coming to your neighbour you may think about the relations of your neighbour. Soon you will know that the Spanish neighbour and other 16 neighbours use the same currency. So, could it be that the others neighbours could help Spanish neighbour in case of fall? It seems quite difficult as the Spanisgh neighbour is to big to be helped.

So, if you do not do what to do you could put your money in German hands. In this way the German money does not give you much back but you can rest in peace.

So, you have your money in German hands. You are very happy because you see that a lot of people are doing the same. And as you see that other neighbours start not returning back the money you are very happy to have trusted the German neighbour.

So there is one day when your German neighbour is one of the few that still returns back the money.

BUT THEN … you begin to be nervous. As the German neighbour is the only left in that part of the building you here voices of people not trusting so much the German neighbour.

Months later you see in horror how the German neighbour also falls. Then you see fools like you that smile while they are making business with the American neighboor. And then you see how the American neighboor also ends not paying back.

Then, as most of the planet is in total chaos you begin to relise that the question “if investors should trust Spain?” was a wrong question as the question should have been “Should the world trust investors?”

So the question that an investor should make himself is not if he or she should trust Spain but if the world can trust him or her.

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