For those with memories longer than the time it takes to read this article, the month of May is quickly approaching, and with it, the one-year anniversary of not only the “Flash Crash”, but also the moment when the European Debt Situation grabbed financial headlines, causing an immediate crisis of global proportions. Capital suddenly flew to safe havens in the form of treasury bills and precious metals. The Euro fell from its lofty perch relative to the greenback, and “PIIGS” was a euphemism that forever joined our daily lexicon of favored terms.
The Euro had strengthened from its debut to the $1.60 range, but the recession pulled it back. As it began to recover afterwards, it staged another assault, rising to $1.51 until news of debt problems surfaced at the end of 2009. In May, the full import of the debt problems became common knowledge, and the downdraft plummeted the Euro to its lowest value in four years, a startling $1.18. Greece was the initial focus, but then the malaise spread to concerns over Portugal, Ireland, Italy, and Spain, the remaining members of the “PIIGS” anagram.
TIME TO GO ON A DIET