Friday, January 16, 2015
Austria could be the next Eurozone shoe to drop
"Spoiler alert: nothing good" Looks like Austria is in deep doo. 9% of its mortgages and 20% of retail lending is in Swissie. Highly deflationary. Not as bad as Hungary or Poland, but the size of the Austrian economy makes this a greater headache for the EU. Bear in mind that the Swiss currency is likely to retrace the earlier 40% currency appreciation over the next year or so. GBP has appreciated about 30% the last three years against Euro, but not in one day, and we take out mortgages in our own currency. What IDIOT allowed the EU's "free trade" rules to allow citizens to take out mortgages in foreign currencies, on the hope that pegs don't break?! This is totally irresponsible. At least Hungary facilitated conversion into local currency after 2008. Poland and Austria have not.