What do Portugal, Greece, and the state of California have in common?
The municipal bonds of these three government agencies have hit junk bond status.
Nobody wants them; nobody wants to trade them; these governments cannot even borrow the exorbitant amounts which threaten to dissolve them into irreparable bankruptcy.
Now Portugal, the sea-side county which has descended into political and economic decline since the ominous earthquake of 1753, cannot even pay its bills from day to day.
Following the resurgence of the conservative party to power, and a massive austerity package to receive an enormous bailout from international creditors, riots and protests throughout the country have threatened law and order, casting a darker hue over the already dim hue that international markets have given to the former imperial power.
Trade unions are on strike. Massive walkouts are crippling the country. Perhaps the spirit of General Salazar or of Henry the Navigator must be conjured up in order to ensure not just political stability, but a pathway to fiscal solvency for the Portuguese.
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