You can always depend on http://theeconomiccollapseblog.com/ to find a dark lining in a silver cloud. This guy makes me seem like a raging optimist.
Oh Crud! 19 Reasons Why It Is Time To Start Freaking Out About The Global Economy
The big problem is that there is simply way, way, way too much debt in the United States and Europe. It has been a lot of fun spending all of this borrowed money, but now we get to pay the price.
The following are 19 reasons why it is time to start freaking out about the global economy….
#1 The yield on 10 year Italian bonds has now risen to more than 6 percent.
#2 The yield on 10 year Spanish bonds has now risen to more than 7 percent. This is considered to be an unsustainable level.
#3 Citigroup Chief Economist Willem Buiter says that both Italy and Spain are going to need major bailouts.
#4 The Spanish banking crisis continues to get worse. The following is from a CNN article that was posted on Monday….
But the depth of the nation’s crisis has raised doubts about whether €100 billion will be enough to recapitalize the banks. For example, the Bank of Spain, the nation’s central bank, released data Monday showing that “doubtful” loans — those that are more than 3 months overdue — rose to €152.7 billion in April, equal to 8.7% of all the loans held by the nation’s banks.
#5 Unemployment in Spain is sitting at a record high of over 24 percent with no hope in sight.
#6 Unemployment in the eurozone as a whole has hit a brand new all-time record high.
#7 The socialists won an outright majority in the recent parliamentary elections in France. That means that France and Germany are now headed in completely different directions. The close cooperation that we have seen between France and Germany in recent years is now over.
#8 New French President Francois Hollande has promised to implement a top tax rate of 75 percent on those making over 1 million euros a year.
#9 German Chancellor Angela Merkel has declared that Germany will not budge at all on the terms of the Greek bailout.
#10 Analysts at Citigroup Global Markets are projecting that the odds of Greece leaving the euro over the next 12 to 18 months are still between 50 and 75 percent.
#11 Money is being transferred from banks in southern Europe to banks in northern Europe at an astounding pace….
Financial advisers and private bankers whose clients have accounts too large to be covered by a Europe-wide guarantee on deposits up to 100,000 euros ($125,000), are reporting a “bank run by wire transfer” that has picked up during May.
Much of this money has headed north to banks in London, Frankfurt and Geneva, financial advisers say.
“It’s been an ongoing process but it certainly picked up pace a couple of weeks ago We believe there is a continuous 2-3 year bank run by wire transfer,” said Lorne Baring, managing director at B Capital, a Geneva-based pan European wealth management firm.
#12 As I wrote about recently, about 500 million euros a day has been pulled out of Greek banks so far this month.
#13 The Bank for International Settlements is warning that global lending is contracting at the fastest rate that we have seen since the end of the last financial crisis.
#14 Lloyd’s of London has publicly admitted that it is making preparations for a collapse of the eurozone.
#15 Government debt levels all over the industrialized world have exploded in recent years. The following is from a recent article by Stephen Lendman….
Five years ago, OECD countries sovereign debt/GDP ratios were 70%. Today it’s 106% and rising.
Anything over 100% is considered to be an extremely dangerous level.
#16 The economic problems in Europe are already taking a toll on the U.S. economy. At this point U.S. exports to Europe are way down.
#17 One recent poll found that 75 percent of Americans are either “very or somewhat worried” that the U.S. economy is heading for another recession.
#18 Under Barack Obama, the United States has been indulging in a debt binge unlike anything ever seen in U.S. history. The following is from a recent Forbes article….
After just one year of the Obama spending binge, federal spending had already rocketed to 25.2% of GDP, the highest in American history except for World War II. That compares to 20.8% in 2008, and an average of 19.6% during Bush’s two terms. The average during President Clinton’s two terms was 19.8%, and during the 60-plus years from World War II until 2008 — 19.7%. Obama’s own fiscal 2013 budget released in February projects the average during the entire 4 years of the Obama Administration to come in at 24.4% in just a few months. That budget shows federal spending increasing from $2.983 trillion in 2008 to an all time record $3.796 trillion in 2012, an increase of 27.3%.
Moreover, before Obama there had never been a deficit anywhere near $1 trillion. The highest previously was $458 billion, or less than half a trillion, in 2008. The federal deficit for the last budget adopted by a Republican controlled Congress was $161 billion for fiscal year 2007. But the budget deficits for Obama’s four years were reported in Obama’s own 2013 budget as $1.413 trillion for 2009, $1.293 trillion for 2010, $1.3 trillion for 2011, and $1.327 trillion for 2012, four years in a row of deficits of $1.3 trillion or more, the highest in world history.
#19 Barack Obama almost seems more focused on his golf game than on the problems the global economy is having. He just finished up playing his 100th round of golf since he became president.
If you are looking for some kind of a global financial miracle you can stop watching.
If European leaders had a master plan to save Europe they would have shown it by now.
If Barack Obama had a master plan to fix things he would have implemented it by now.
If the Federal Reserve had a master plan to fix things we would have seen it by now.
The entire house of cards is starting to come down and things are going to get really messy.
A lot of people both in the United States and in Europe are going to lose their jobs and their homes over the next few years.
It is likely that the next recession will be even more painful than the last one was.
Now is not the time to panic. If you acknowledge what is coming and prepare accordingly then you will likely be in good shape.
But if you stick your head in the sand and pretend that everything is going to be okay then the next few years will likely be incredibly painful for you.
Butthurt says:
nothing will happen, just a slow steady collapse lasting a century, that nobody much notices due to the wonderful human ability to cope with slow adjustments. yawn.
Hot debate. What do you think?
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21st June 2012 at 1:02 pm
Maddie's Mom says:
What took him so long???
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21st June 2012 at 1:08 pm
Persnickety says:
Another one of these silly lists – I thought this was an AWD post until I checked.
Anyhoo, a lot of this list is melodrama. I especially like the Italian bond yields going to 6%. Back in the 1980′s I got more than that on my savings passbook account at a regular for-profit bank. In the long view 6% on a government bond isn’t all that high. What makes it worrisome is what has been building up for many years – that most countries are in such bad financial shape that a measly little 6% interest rate threatens to make them collapse. It’s the build up you should worry about, not the insignificant yield at the moment.
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21st June 2012 at 1:08 pm
AWD says:
Can’t tell if Butthurt is a dopple, or just a stupid fucking wingnut.
Very Stuckey-esque.
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21st June 2012 at 1:11 pm
AWD says:
Snicky:
“Another one of these silly lists – I thought this was an AWD post until I checked.”
Blow me
Hot debate. What do you think?
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21st June 2012 at 1:12 pm
Administrator says:
Wow. Butt hurt with more wisdom. What an intellectual heavyweight we’ve brought to the site. Yawn.
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21st June 2012 at 1:14 pm
AWD says:
Butthurt:
Thanks for another deep and meaningful comment. How’s life on the Hershey Highway?
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21st June 2012 at 1:15 pm
card802 says:
If there was a plan it would have been implemented by now.
The problem with that statement is there are many who have a plan, who have ideas, but the main stream doesn’t listen, the only press they get is ridicule.
How fucking stupid are we? The fucking morons in charge ridicule those who think outside the box, because as we can see, the fucking morons in charge are doing so magnificently.
“May you live in interesting times”
An old Chinese curse.
We are living in some very interesting times indeed.
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21st June 2012 at 1:47 pm
Thinker says:
Charles Hugh Smith has a great post today: Centralization Has Failed
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21st June 2012 at 2:27 pm
Administrator says:
CHS sent me an email yesterday telling me how much he liked my Middle Class article.
Well-loved. Like or Dislike:
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21st June 2012 at 3:15 pm
card802 says:
Well, I also enjoyed your article on the Middle Class.
So I made another donation.
Keep up the great work! You are helping me to covert many blind drones to the joys of seeing for the first time.
You know how it is, they won’t believe you, but, if someone else says the same thing, well then….
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21st June 2012 at 3:34 pm
Administrator says:
card802
Thanks for the donation. I appreciate it.
It will help pay my son’s traffic violations.
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21st June 2012 at 3:37 pm
efarmer says:
“Thanks for the donation. I appreciate it.
It will help pay my son’s traffic violations.”
Well I hope you at least bought a decent ass bottle of wine with some of mine.
EF
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21st June 2012 at 6:16 pm
ZombieDawg says:
Butthurt – I believe the collapse will be fairly quick, like a few weeks (at most) to play out globally.
The damage repair phase will run for decades while the various countries achieve minimal economic growth which will all be used to repay their bailout obligations.
After that, true recovery can occur.
This is what I said 6 months ago and what the experts are now saying too.
Hell, I’m not an economist but even I can see the bleeding obvious…
I call it 1929 x 50 (ie Great depression times 50 in severity)
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21st June 2012 at 7:06 pm
Colma Rising says:
Efarmer:
Administrator could brew 10 cups of coffee at home with my Amazon purchase this month.
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21st June 2012 at 7:07 pm
Colma Rising says:
Pots…. pots of coffee.
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21st June 2012 at 7:08 pm
IndenturedServant says:
I tend to think the collapse will be a drawn out affair with a few sudden monetary events like 2008 however, if ButtPlug thinks it’s going to be a *yawn*, then he ought to stock up on plenty of lube……he gonna need it!
I_S
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21st June 2012 at 8:04 pm
ron says:
China well bail use out. Or a death of a thousand cuts.
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21st June 2012 at 8:26 pm
Thunderbird says:
Who are you talking too; the rich or the poor? Perhaps the rich because the poor are already adapting.
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21st June 2012 at 8:35 pm
Administrator says:
EF
I used your generous donation towards my tuition at the University of Phoenix for my degree in the study of African culture.
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21st June 2012 at 8:47 pm
efarmer says:
shoulda bought the wine………..
EF
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21st June 2012 at 9:01 pm
ZombieDawg says:
GEAB 66 :
http://www.leap2020.eu/GEAB-N-66-is-available-Red-alert-Global-systemic-crisis-September-October-2012-When-the-trumpets-of-Jericho-ring-out_a11079.html
Pretty much sums it up – we have 3-4 months before kaboom.
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21st June 2012 at 12:30 am
Stan says:
Admin. if you want to study African culture, come down here to Chattanooga and hang around the projects. Then take a drive down MLK street. Just don’t go slow.
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21st June 2012 at 5:04 am