Laughing at Europe’s Bailouts

Remember the old Abbott and Costello routine “Who’s On First?”

Australian political satirists John Clarke and Bryan Dawe recently put together a modern-day version of that 1940s vaudeville classic with a rapid-fire shtick that pokes edgy fun at how much of Western Europe found itself buried under trillions of dollars in sovereign debt, and the scant likelihood that this debt will ever be repaid despite the European Union’s $920 billion bailout plan.

Clarke at one point summarizes the issue with this Costello-esque query: “How can broke economies lend money to other broke economies who haven’t got any money because they can’t pay back the money the broke economy lent to the other broke economy and shouldn’t have lent it to them in first place because the broke economy can’t pay it back?”

All jokes aside, the Aussies are spot-on with their assessment of what’s troubling Europe. Sovereign debt for Germany, France and the UK is above 80 percent of projected GDP for 2011, and these countries are the relatively healthy ones.

Several eurozone nations are still teetering under their debt burden, which could lead to more massive bailouts and a threat to the future of the euro, not to mention the risk of a contagion that could reverse the global economic recovery.

Watch the video.

About Frank Holmes 263 Articles

Affiliation: U.S. Global Investors

Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., which manages a diversified family of mutual funds and hedge funds specializing in natural resources, emerging markets and infrastructure.

The company’s funds have earned more than two dozen Lipper Fund Awards and certificates since 2000. The Global Resources Fund (PSPFX) was Lipper’s top-performing global natural resources fund in 2010. In 2009, the World Precious Minerals Fund (UNWPX) was Lipper’s top-performing gold fund, the second time in four years for that achievement. In addition, both funds received 2007 and 2008 Lipper Fund Awards as the best overall funds in their respective categories.

Mr. Holmes was 2006 mining fund manager of the year for Mining Journal, a leading publication for the global resources industry, and he is co-author of “The Goldwatcher: Demystifying Gold Investing.”

He is also an advisor to the International Crisis Group, which works to resolve global conflict, and the William J. Clinton Foundation on sustainable development in nations with resource-based economies.

Mr. Holmes is a much-sought-after conference speaker and a regular commentator on financial television. He has been profiled by Fortune, Barron’s, The Financial Times and other publications.

Visit: U.S. Global Investors

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