Spain? Isn't That In Europe?

For those of you who think that Grand County and Spain have nothing in common, think again.

Spain is currently sitting on a 22 percent unemployment rate because of--get this--the bursting of their housing bubble. Of all the European countries, Spain's real estate boom--and ensuing bust--was the biggest. European banking exposure to Spanish debt is probably the worst out of all of the PIIGS.

You may have heard of the problems with Portugal, Ireland, Italy, Greece and Spain--collectively known as the PIIGS. Greece and Ireland are ready to default. There's no question about if, but when. Many think it will be within weeks. Once that happens, it will set off a nice set of dominoes in the rest of the PIIGS countries, causing massive upheaval throughout Europe.

Of all the PIIGS countries, Spain exposes European banks to the greatest liability due to their financing of the housing boom. Just like the U.S., where our government has tried to bail out banks that made bad debts on housing, the European Central Bank has done the same with their banks. The problem is that this charade can only last so long before something breaks, and it looks like we're nearing that point now.

As I write this, tens of thousands of young Spaniards are protesting in the streets. They've been there for nearly a week, and are refusing to leave even though the government has made it illegal for them to do so.

Right now, the whole continent of Europe is a powder keg. The fuse is lit--how long the fuse will burn is the question. When Europe goes, the whole world will be affected--much like the financial crisis of 2008, except this time, there will be no bailouts.