When I started thinking about locating the next Cyprus is
really anyone's guess. There are a myriad of factors that
can contribute to a financial crisis. One of them is
unemployment, and while it doesn't tell the whole story I decided
to look at that factor to determine who might be next, or at
least who we should be worried about.
According to the Bank of Cyprus, the "harmonized rate of
unemployment" moved from 6% in 2010 to 9.5% in 2011 and ended
last year at 14%. That is some serious growth in a key
factor of economic success for a country.
I then went on to look at the rest of the world... and I found
out that 14% unemployment is an enviable rate for at least 74
other nations. I counted 71 countries that had unemployment
rates of 15% or more... three other countries Syria, Turkey and
Bahamas had rates higher than Cyprus, but less than 15%.
The top of the list was Congo with 67% unemployment, and
Africa placed a significant amount of countries in the Top 35.
Africa being mostly under-developed shouldn't be our focus.
I am not sure that Kenya at 40% or even Ethiopia at 26%
have than big of an impact on the world economy.
Let's at least take a look at few countries that could impact
the world economy, and I will start with my pick for the source
of the next blow up. Spain has an unemployment rate of 26%,
which is a lot for a developed nation, but the blow your mind
part of the Spanish situation is that unemployment was only 8% in
2008 ... so it has more than tripled in over the last 5
Next is Italy with 11.7%, which is up from 8.2% in 2008.
Not nearly the blow up that is Spain, but still an
increasing rate while most of the rest of the developed world has
seen declines in the rate of unemployment.
Finally, we have France... which has avoided many of the big
headlines of being a problem country. I see unemployment
steadily rising in France over the last several quarters.
Their unemployment rate bottomed at 9.5% in mid-2011, but
has since increased in each of the last six quarters. It
currently stands at 10.6%.
Based on all of this, do you think that the rate of increase
in unemployment can tell us where the next blow up might be?
Do you think it's one of the three nations that I
highlighted or are there warning flags elsewhere?
Chime in and let us know!
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