Friday, October 26, 2012
Unemployment in Spain Surpasses 25 Percent - ECB Awaits
The economic news for Spain continues to worsen, as the National Statistics Institute said in Madrid that the unemployment rates has soared past 25 percent, to stand at 25.02 percent. That's up from 24.6 percent in the last quarter.
Projections are the economy of Spain will continue to sputter, with unemployment probably reaching 27 percent in 2014.
Painting a much rosier picture is the Prime Minister Mariano Rajoy, who sees the employment picture improving in 2013, and the Spanish government saying the economy will drop by only 0.5 percent. Economists watching the situation see it contracting by almost 1.5 percent.
This puts even more pressure on Rajoy to apply for the loan aid offered by the ECB, although he asserts he feels no pressure to do so at this time.
According to an analyst with Madrid-based consultant firm Analistas Financieros Internacionales, Sara Balina, she told Bloomberg that the third-quarter wasn't nearly as good as the data suggest, as "they were distorted by a temporary increase in demand before a value- added tax increase and by exports that may suffer from weakening growth in the euro zone.”
Although positioning for time, it's clearly approaching when Spain will have to apply for financial aid, which it is delaying in having to do because of the austerity measures included in the package.
The only question is how far and how long will the politicians in Spain go and wait until they finally do what everyone knows they'll have to do: apply for the aid.
This will result in the price of commodities, especially gold and silver, rising significantly, which along with QE3 from the Federal Reserve in America, will push the price of the precious metals up.