While Portuguese bond spreads suggest all-is-well, stocks rally, and the nation’s leaders proclaim the worst is over, there is a hard-to-manipulate statistic that should shock many about the truly dismal state of the troubled nation. As The FT reports in the brief clip, Portuguese road-traffic fell 50% in 2012, and a stunning 68% in Q1 2013.
Not only does this expose the deepening of the current depression but it highlights the massive and successive government mis-allocation of capital in the troubled nation amid “an excessive and disproportionate focus on motorways to the detriment of railways.”
Portugal has 4-times more roadways per-capita than Britain and 60% more than Germany. There are at least nine major motorways that fall notably below the required 10-12,000 vehicles-a-day that ‘justified’ construction.
It seems the doctrine of Keynes remains firm even in the face of entirely non-economic uninhabited ghost cities in China to un-driven ghost roads in Portugal. Will we never learn?
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