Overseas Market in Trouble
One of the main reasons behind the drop was concerns about the Spain Economy. There are fears that the European country will need a sovereign bailout to avoid defaulting on its debts. Another topic in the news about the European markets is that Greece is getting ready to get out of the Euro zone. Market analysts, individual investors, as well as many others involved in the world of global finance are monitoring the situation in Europe with a lot of attention. Any type of financial turmoil in the European continent could have global repercussions. More specifically, many are looking at what European countries and the international community are going to do to prevent further economic problems for Europe. There are many regions in Spain that are currently experiencing a lot of economic problems. Just recently, it has been reported that about 6 regions of Spain are going to take advantage of a government program that would keep their finances in order, for the time being.
As far as Greece is concerned, there is still a lot of uncertainty. Even though there has been a lot of talk lately as to whether the country will finally leave the Euro zone, there isn't anything that has been confirmed yet. Some European politicians and financial experts believe that Greece will be gradually reverting to its previous currency - the Drachma. There is speculation that up to half of the government's pensions and salaries, they will soon begin to being paid out in Drachmas as opposed to Euros. But the main question is: what does all of this mean for individual investors and small businesses, both in Europe and abroad? We already know that for many businesses in Europe, especially in Spain and Greece, the two countries that have been the most affected by the economic troubles - things are really difficult. Sales numbers are down and many businesses have been forced to either close down completely or to lay off some of their staff. Retail merchants are trying to cut down on their prices to attract customers, but very often, this didn't have the effect that they were hoping for.
In Greece, a lot of people have lost trust in local banks, especially now that the country may revert back to the Drachma. Instead of deposit accounts, many are opening up safe deposit boxes to store paper currency. Some people with more resources are buying US Dollars, or gold bullion. There are also those who are opening offshore accounts to keep their money, believing that they're safer than local banks. In America and other parts of the world, investors are now finding it useful to consult a financial adviser for professional advice on where to invest their money and to see what investments they can make that would be safer. It should be remembered that no matter what the economic conditions are, there will always be some investments which will allow for more safety, and for those with a higher tolerance for risk, some long term growth.