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18 Indications That Europe Has Become An Economic Black Hole Which Is Going To Suck The Life Out Of The Global Economy

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Summer vacation is over and things are about to get very interesting in Europe.  Most Americans don’t realize this, but much of Europe shuts down for the entire month of August.  I wish we had something similar in the United States.  But now millions of Europeans are returning from their extended family vacations and the fun is about to begin.  During August economic conditions continued to degenerate in Europe, but I figured that it wouldn’t be until after August that the European debt crisis would take center stage once again.  And as I wrote about last week, if there is going to be a financial panic, it typically happens in the fall.  The stock market has seen quite a nice rally over the summer, and many investors are nervous that we could see a significant “correction” very soon.  The month of September has been the absolute worst month for stock performance over the past 50 years, and it has also been the absolute worst month for stock performance over the past 100 years as well.  Of course that does not guarantee that anything is going to happen this year.  But things in Europe continue to get worse.  Unemployment rates are spiking, manufacturing activity is slowing down, housing prices are crashing and major financial institutions are failing.  What is happening in Europe right now appears to be an even worse version of what happened to the United States back in 2008.

But most Americans aren’t too concerned about what is happening in Europe.

In fact, most Americans don’t believe that a European financial collapse would be much of a problem for us.

Well, just remember what happened back in 2008. When the U.S. financial system started coming apart at the seams it sparked a devastating worldwide recession which was felt in every corner of the globe.

If the European financial system implodes, the consequences could be even worse.


Europe has a larger population than the United States does.

Europe has a larger economy than the United States does.

Europe has a much, much larger banking system than the United States does.

If Europe experiences a financial collapse, the entire globe will feel the pain.

And considering how weak the U.S. economy already is, it would not take much to push us over the edge.

What is going on in Europe right now is a very, very big deal and people need to pay attention.

The following are 18 indications that Europe has become an economic black hole which is going to suck the life out of the global economy….

#1 The unemployment rate in France is up to 10 percent, and the French media is buzzing about the fact that the number of unemployed French workers has now hit the 3 million mark.

#2 The French government has just announced the nationalization of its second largest mortgage lender.  Additional bailouts are likely on the way.

#3 French automaker PSA Peugeot Citroen has announced that it will be cutting more than 10,000 jobs.  But of course major layoff announcements like this are coming out of Europe almost every day now.

#4 Home prices in France are falling rapidly and the recent election of a socialist president has created a bit of a panic in the French housing market….

British people with homes in France were today warned that the property market is in ‘free fall’.

A combination of factors including the election of a tax-and-spend Socialist government means that prices are tumbling.

It means an end to the boom years, when thousands of Britons poured money into rental or retirement investments across the Channel.

#5 A slow-motion bank run is happening in Spain.  The amount of money being pulled out of the Spanish banking system is absolutely unprecedented.  The following is from a recent Zero Hedge article….

The central bank of Spain just released the net capital outflow numbers and they are disastrous. During the month of June alone $70.90 billion left the Spanish banks and in July it was worse at $92.88 billion which is 4.7% of total bank deposits in Spain. For the first seven months of the year the outflow adds up to $368.80 billion or 17.7% of the total bank deposits of Spain and the trajectory of the outflow is increasing dramatically. Reality is reality and Spain is experiencing a full-fledged run on its banks whether anyone in Europe wants to admit it or not.

If this pace keeps up, more than 600 billion dollars will be pulled out of Spanish banks by the end of the year.

Keep in mind that the GDP of Spain for all of 2011 was just 1.49 trillion dollars.

So by the end of this year we could see the equivalent of more than 40 percent of Spanish GDP pulled out of Spanish banks and sent out of the country.

In case you were wondering, yes, that is a nightmare scenario.

#6 The unemployment rate in Spain is over 25 percent.  The youth unemployment rate in Spain is well over 50 percent.  Spain is a tinderbox that could be set ablaze at any moment.

#7 The yield on 10 year Spanish bonds is up to 6.85 percent.  This is an unsustainable level, and if rates don’t come down on Spanish debt soon it is inevitable that Spain will end up just like Greece.

#8 On Monday it was announced that Spanish banking giant Bankia will be getting an emergency “cash injection” of between 4 and 5 billion euros.  Apparently “cash injection” sounds better to the politicians than “a bailout” does.

#9 The housing crash in Spain just continues to get worse.  It is being reported that some homes in Spain are being sold at a 70% discount from where they were at the peak of the market back in 2006.  At this point there are approximately 2 million unsold homes in Spain.

#10 There are persistent rumors that the government of Spain will soon be forced to officially ask for a bailout from the rest of Europe.  But who is going to bail them out?  Most of the other governments of the eurozone are on the verge of bankruptcy themselves.

#11 Manufacturing activity in Europe has contracted for 13 months in a row.  The following is from a recent Reuters report….

The downturn that began in the smaller periphery members of the 17-nation bloc is now sweeping through Germany and France and the situation remained dire in the region’s third and fourth biggest economies of Italy and Spain.

“Larger nations like France and Germany remain in reverse gear… the (manufacturing) sector is on course to act as a drag on gross domestic product in the third quarter,” said Rob Dobson, senior economist at data collator Markit.

Markit’s final Purchasing Managers’ Index (PMI) for the manufacturing sector fell from an earlier flash reading of 45.3 to 45.1, above July’s three-year low of 44.0, but notching its 13th month below the 50 mark separating growth from contraction.

#12 Chinese exports to the EU declined by 16.2 percent in July.  U.S. exports to Europe have been steadily falling as well.

#13 Slovenia and Cyprus are two other eurozone members that are in desperate need of bailout money.  The dominoes just keep falling and nobody seems to be able to come up with a plan to “fix” Europe.

#14 Even the “strong” economies in Europe are being dragged down now.  For example, unemployment in Germany has risen for five months in a row.

#15 According to one recent poll, only about one-fourth of all Germans want Greece to remain a part of the eurozone.  The odds of a breakup of the euro seem to rise with each passing day.

#16 It is now estimated that bad loans make up approximately 20 percent of all domestic loans in the Greek banking system at this point.

#17 The suicide rate in Greece is more than 30 percent higher than it was last year.  People are becoming very desperate in Greece and there is no end in sight to the economic depression that they are going through.

#18 Large U.S. companies have been rapidly getting prepared for a Greek exit from the eurozone.  The following is from a recent New York Times article….

Even as Greece desperately tries to avoid defaulting on its debt, American companies are preparing for what was once unthinkable: that Greece could soon be forced to leave the euro zone.

Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency.

Every time European leaders get together they declare that they have “a plan” that will solve the problems that Europe is experiencing, but as we have seen things in Europe just continue to get worse with no end in sight.

A key date is coming up in the middle of this month.  On September 12th, Germany’s Constitutional Court will determine the fate of the recent fiscal pact and the ESM.  According to UniCredit global chief economist Erik Nielsen, if the court rules against the fiscal pact and the ESM the fallout will be catastrophic….

“If they were to surprise us by striking down Germany’s participation, I would think it’d be an utter bloodbath in markets”

But that is not the only thing that could set off a full-blown panic in the financial markets.

The truth is that Europe is teetering on the edge.

One wrong move and it is going to be 1929 all over again.

As I have maintained all along, the next wave of the economic collapse is rapidly approaching, and this time the epicenter for the crisis is going to be in Europe.

But that does not mean that things are going to be easier for the United States than last time.  We have never even come close to recovering from the last recession.  Most Americans families are just barely getting by.  In fact, 77 percent of them are living paycheck to paycheck at least part of the time.

Right now there are millions of Americans that have lost their jobs and their homes in recent years and that feel forsaken by society.

After this next wave hits us there will be tens of millions of Americans feeling the pain of economic desperation.

The last wave of the economic collapse hurt us.

This next wave is going to absolutely devastate us.

Watch what is happening in Europe very carefully.  What Greece, Spain, Italy and France are experiencing right now is going to hit us soon enough.

  • KL

    Its only a matter of time before the Euro breaks up. Hey Mike here is a clip from Peter Schiff talking about the pending economic collapse. Keep up the good work and thanks once again for all the great information. Watch the clip from Mr. Schiff here…

    • 007

      It can be a good while. The ECB is going to print money to buy all the worthless government bonds. They are going to keep printing money until something stops them. My guess is that something will be inflation so painful the public won’t stand for it. That will be the end of the party. But who knows when that will be.

    • Mat

      this web sites makes the world darker everyday and will not solve problems.

      • “this web sites makes the world darker everyday and will not solve problems.”

        Yeah – “ignorance is bliss”.

      • warren currier

        You wrote:

        “this web sites makes the world darker everyday”

        I say:

        “One man’s darkness is another man’s light”

        And ask:

        “Is someone forcing you to be on this page?”

  • Shamaka

    Well, when banks all over the world are able to lend many times the actual deposits (in many cases 30x the amount of real money) it follows that if money flows out of the bank at huge rates the leverage is going to increase. You need fewer and fewer defaults to bring the whole system down. Everything looks great when the market is going up, becasue you are making ever more money (interest and commissions) and the capital value of the assets goes up as well. Now the banks cannot get the interest (and fewer commissions on new loans) and they can recover less than the original capital value. The worst side effect is that some highly profitable companies would like to get more capital to expand/meet real growth, but cant get it. At least they can grow from retained earnings – unless they are tied to a failing bank! And beleive me, there are companies where the boards have insisted on cash reserves being placed in these risky “high yield” institutions.

    • OldPhart OutIn TheDesert

      The US banking institution is at 60% of deposits. That means for every million in deposits, they have created sixty million. It’s even worse than you think.

      Every payday I withdraw 90% of cash from my bank and put it under the mattress. When I find the ability to buy silver, I make a deposit and place the order.

      • “The US banking institution is at 60% of deposits. That means for every million in deposits, they have created sixty million. It’s even worse than you think.”

        60 % of 1 million is 600,000 – not 60,000,000.

        • warren currier

          Carried through to theoretical limits, an initial $10,000 of reserves
          distributed within the banking system gives rise to an expansion of
          $90,000 in bank credit (loans and investments) and supports a total of
          $100,000 in new deposits under a 10 percent reserve requirement. The
          deposit expansion factor for a given amount of new reserves is thus the
          reciprocal of the required reserve percentage (1/.10 = 10). Loan
          expansion will be less by the amount of the initial injection. The
          multiple expansion is possible because the banks as a group are like one
          large bank in which checks drawn against borrowers’ deposits result in
          credits to accounts of other depositors, with no net change in the total

      • warren currier

        An initial $10,000 of reserves distributed within the banking system gives rise to an expansion of $90,000 in bank credit (loans and investments) and supports a total of $100,000 in new deposits under a 10 percent reserve requirement. The deposit expansion factor for a given amount of new reserves is thus the reciprocal of the required reserve percentage (1/.10 = 10). Loan expansion will be less by the amount of the initial injection. The multiple expansion is possible because the banks as a group are like onelarge bank in which checks drawn against borrowers’ deposits result in credits to accounts of other depositors, with no net change in the total reserves.

  • Traffix

    Went camping last weekend, used to see alot of nice R.V.’s. This time we saw alot of tents, and I have noticed two R.V.’s for sale in parking lots. Probably just my frame of mind.

  • superbighuge

    It is astonishing how people who think they have a clue are completely oblivious to the impending financial holocaust that is on the horizon. I’m a commercial pilot. My training prepared me to recognize problems and correct them before those problems resulted in the death. What is and has been happening, is the equivalent of a passenger attempting to safely land a jet in instrument conditions without any experience. Moreover, it is as if the same person attempting to shoot an ILS approach and fly for the first time, is convinced they will do an adequate job. So much so, that they decide to disregard the experienced captain who is trying to help via radio. The result is academic. Even if that pax believes they will be lauded a hero in the end. Welcome to Amerika. The aircraft = our economy. The pax = Bernanke. The experienced captain = Michael Snyder/Peter Schiff/ et al.

    • Ken Nohe

      As a commercial pilot, how many hours did you spend training?
      The economy of a developed country is far more complex than a jetliner but how many politicians have a clue about finance and economics? To put it in other words, would you board a plane where the captain is chosen by a majority of the passengers after a short campaign of cheap slogans: “Fly higher” “Reach New York faster”? And should we really be surprised with the results?

  • Prepared Pastor

    I do not believe it will be ‘1929 all over again’ which was deflationary because we will continue to expand the money supply to cover ballooning entitlement costs until the dollar crashes.

    If it is The Great Depression all over again we can look forward to getting through the worst of it fairly quickly as real unemployment today is closing in on the high of 25% and within four years the economy had turned around. By 1940 real unemployment was lower than it is today.

    Soon our standards of living will be reduced to the home that is paid off, the cars that are paid off, and the hard assets we put away when times were good. Whatsoever a man soweth; that also shall he reap.

    • SuperBigHuge

      You’re correct. It will not be 1929 all over again…it will be exponentially worse than any collapse the world has ever known. If you are not prepared, you will perish. It doesn’t get any easier to understand than that. Our economy has 200+ TRILLION Dollars in UNFUNDED liabilities. That is a number that no single person can really comprehend. To put it in perspective, One million seconds comes out to be about 11½ days. A billion seconds is 32 years. And a trillion seconds is 32,000 years. 200 Trillion seconds takes 640 thousand years. A stack of 4 trillion $1 bills would reach the moon , and then some. Now contrast that with the debt that the USA had during 1929 which was roughly 17 Billion dollars. Furthermore, the US Government borrows and then spends $2.33 to generate $1 in GDP. The numbers are literally insane. Anyone who believes that this coming collapse is going to be manageable doesn’t understand math. Einstein once said “The most powerful force in the universe is compound interest”. As usual, Al was correct. There is a reason why the DHS purchased 1.4 billion rounds of ammo in the past 6 months (most of it hollow point). What we are about to face is a systemic and complete worldwide economic collapse. No other event created by humans has ever, or will ever have the effect that this collapse will have on humanity. I would be very surprised if our civilization functions post-dollar. My advice…stock as much food, ammo and gold/silver as you can. Otherwise, you’ll starve to death.

      • the ragged trousered philanthropist

        Excellent article, superbly written.
        Any doubters should cut and paste it and print it out and read it EVERY day.
        It’s impossible to find a counter argument and unbelievable that we’ve allowed TPTB get the world into this mess.

        • “It’s impossible to find a counter argument and unbelievable that we’ve allowed TPTB get the world into this mess.”

          Well, who exactly are TPTB?
          Probably Those Who Can’t Be Named (TM). They simply can’t be named… let alone criticized.

          • warren currier

            ” The Powers That Be “

    • Optimistic Pessimist

      Back in 1929 people did not have houses on such vast mortgages that they do today. There wasn’t the easy access to credit then that we have had over the last decade. There weren’t people buying second, third, fourth homes as buy to let to supplement their pensions.


  • Jonno

    How many times do I have to tell you. Get the F out of where you are and come to Australia. Jobs everywhere, waitresses earn $20 per hour, tradesman $50 or $60 , nurses earn $ 1,000 for a weekend. The best beaches in the world, the food is fantastic and most people are happy.
    These are not even great times but I have a business that makes me
    $1,500 per week and I have a full time job that pay $ 1,000 per week. And, I’m in my sixties and I’m treated well by customers from both companies, age means nothing here. I live 50mts from the beach and pay $300 per week rent.And the beach looks like something out of Blue Lagoon. More later, but get out while you can , if you need advice just ask.

    • Mondobeyondo

      Are you sure that isn’t a typo? There’s no waitress in America that earns $20.00 an hour. $2.00 an hour is more like it (that’s without tips, of course.)

      • warren currier

        “Are you sure that isn’t a typo? There’s no waitress in America that
        earns $20.00 an hour. $2.00 an hour is more like it (that’s without
        tips, of course.)”

        Unbelievable comment.

    • Eisenkreutz

      Your country sucks. You morons and your idiotic gun ban. Hows that crime rate working for you? Socialist tool.

    • pranah

      I thought of immigrating to Australia in the 1980s. At that time, when I investigated, there were many requirements to immigrating, such as needing to be in a profession that Australia wanted; had to be a certain age; and so on. Same for Canada. When GWB stole the election for the second time, I looked into moving to Canada. There was a checklist on which one had to score high, including the age and profession requirements; you got credit for having Canadian relatives or speaking French; and so on. I didn’t score high enough for either Australia or Canada to accept me. I’ve known for years that there are other First World countries you can’t just waltz into. If all the requirements have changed, oo-rah for everyone who can get out while the getting’s good, if that’s what they want to do. Good of you to offer to help with info, Jonno.

    • Joe

      Bah you don’t want a bunch of bloody Yank wankers comin down there. As a Johnny Reb I would feal weird being called “yank” anyways.

      In reality for me its like I can see the train comin but I’m tied to the tracks.

      • whitez

        Is your name “Johnny Yuma”?

    • I liked Melbourne a lot, but I was there in 1988. They say it has really changed now. And some aussie girls just loved us yanks, and others didn’t seem to like us much at all. Melbourne is having a housing bust right now. Prices can collapse in Australia too. But, thanks for the info. I’m still not sure if Aussies like yanks or not.

    • annie


    • William

      Australia has the best kids TV series on Netflix. High morals, respect for parents, always allowed in my house.

    • Don


      I live in the US and would love to know more about Australia *************************

    • Kevin2


      Last but not least we speak “kind of” a common language too.

    • Rodster

      Once the Eurozone collapses I don’t think any country on the planet will be left unscathed. It will spread like a US wildfire.

    • Mike Crawford

      I would like more info on Australia. Tell me more about the employment opportunities. I am very interested.

    • GaryToo

      another aussie here. Sounds like you are also in the west where we carry the rest of the country with mining.

      we are only a higher deck on the same titanic. our house prices have dropped 5% a year every year since 08, and international expert say our prices are still in a bubble. Manufacturing and reatil all dying. The mining boom is over. Projeccts being shelved I also have a business that makes usually 1500$/wk USUALLY, but steadily dropping, down 50% in the last 2 weeks. China does not have to buy our ore which price is dropping, when ready they will buy elsewhere. When the US crashes we will go down too. You are complacent brother.

    • JAZ

      Jonno , I’m a fellow Aussie too
      Yes we have been very lucky the past 2 decades both socially and economically. But unfortunately the party is over for us mate. We are very much about to feel the sting the USA is feeling. Our economy is very close to a major correction ie Property values , private debt & unemployment.
      And for the record us Aussies love the yanks , just because we poke fun at you guys doesn’t mean we don’t like ya fact quite the opposite

      • Sim Pill Tun

        All I care about is can I bone a hot australian girl who is tall and tan and likes to be photographed in a bikini?

      • Tom H

        I think you’ve got your head screwed on correctly: Your comments are right on target. Deflation will be the name of the game and nobody will escape the problems. And thank you for your kind comments about we Americans; I like and respect the Aussies as they have been loyal allies forever.

  • Daniel

    Great article Michael! You tell it like it is. I have tried to tell friends and co-workers about your site, your articles, and the terrible pain that is to come but no one wants to believe. Most of these people still think things Will be okey. Really have their heads stuck in the sand.

    • Michael


      All we can do is keep banging away and hope that people will wake up in time. 🙂


    • chiller

      I run into the same thing where I work. At least they can’t come back and say, “Why didn’t you say something?”

    • Jodi

      I’m one who has tried to pass on the word about this site also. I have had success on getting people to read but others still don’t buy that there is a problem. They are in for a rude awakening…soon they will know it’s true.

  • mark

    Europe has a debt problem just like the rest of the world. More debt will not fix the problem. That seems to be the answer more or less from both political parties. One spends faster, but they both borrow more money. We live on a ranch well out in the country and are prepared for hard times. Things are getting worse out there. Are you prepared? If not you had better start.

  • Sara

    If this is all going to hit the fan is now not a good time to buy a house? I just don’t want to waste my life waiting for the right time and missing out on an opportunity.

    Rents in my area are climbing. For example 3 years ago the house we are renting was $725.00 per month. Today the same house rent is now $800.00 per month.

    Currently we are looking at a bank foreclosure and won’t pay more than 40% of list price (if bank would take it) but I just do not know if we should incur debt as we are debt free and have been for 6+ years.

    We did not buy during housing boom because we knew the houses were overpriced and did not want to overpay. Plus we were working on paying back 60K plus between husband and myself in student loans. Which we successfully did.

    But in hindsight I wish I had never taken out so much debt to fund my college education. I just assumed that getting a degree was the right thing to do and would lead to the income and lifestyle my parents have.

    I just want a future for my family that is bright and hopeful. We are self-employed with no health insurance (can’t afford it right now) but pay our bills every month.

    It seems the banks are trying to maximize their profit on these REO’s and the realtors are going along with it by advising them to price the houses at unrealistic levels for the average income in our area.

    What is your take Michael? Is now the time to buy or should we just rent and wait?

    • Michael


      There are pros and cons to both.

      There are a LOT of expenses that come with buying a house. For those that are just scraping by each month I generally recommend against it.

      But for some people buying a house right now would be a good decision. I discussed some of the pros and cons in point #6 of this article….


    • Livinginparadise


      I have been wondering the same thing. The housing was so messed up here in Hawaii…prices went through the roof and people continued to buy. I know several that did and lost so much. They kept telling me to buy and I said no because I knew property was ridiculously over priced. Even with the prices going down recently it still is messed it up here. They are still over priced here. They are asking way too much for foreclosures and the price is not coming down overall as it should be. The housing is always higher here, but it is not the same now. You pay a lot for just junk and then only those that have the money can fix them up….some are not even worth fixing up, but should be torn down. Most are just old and falling apart. Now, the rent prices have gone up a lot and it is harder to find good rental properties with affordable prices. I have been wondering if it is a good time to by on the mainland because of the low interest rate. It’s harder than ever now in Hawaii. Who knows if interest rates would ever be this low again. At this point it seems like buying is better than renting. I personally just do not want to keep moving and worry about where I am going to live. I just wasn’t sure when everything collapses if prices of homes will drop like a rock. I guess there is a possibility that we would pay maybe less in the near future for homes, but then we risk maybe having a lot higher interest rates. It seems kind of like a toss up on that. It is hard to tell which would be more beneficial, wait to see if prices continue to go down or then we might not have the low interest rates. Michael, what do you think about the prices vs. interest rate?

      • Michael

        I think if you do want to buy a home it is good that interest rates are near record lows.


  • Mad Max

    Everything and every place is going to collapse for the simple fact that no one is doing a dammm thing about it. I blame we the stupid people. We sit and complain and that’s it. Like complaining is some kind of solution. Stupid is what stupid does. I guess we got it coming.

    OsiXs (Revolution 2.0 – The Smart Revolution!)

    • NW Prepper

      I’m with you. We all read these posts, watch what is already happening (hell, for most people I know, the collapse is already here), and just wait. We just wait. and do nothing about it. Is there anybody really doing anything about it? or all we all just sitting ducks?

  • Mondobeyondo

    What happens in Vegas may stay in Vegas, but what happens in Europe can and will affect US, big time.. I mean us, as in ourselves, and US, as in the USA.

    Last time, it was Bear Stearns and Lehman Brothers. This time, it may be Paribas or HSBC or other European banks. (disclaimer! This in no way indicates those financial institutions are in imminent trouble. Okay, I feel better now.)

    The point is, we’re going to be affected if there is a major financial calamity in Europe.

    • GaryToo

      classic mondo haha

  • Ben


    Believe me, I’ve been there and sure wish I could spend my days there. However, your economy is no different than ours in Northern Canada – sponsored by foreign investment. And that foreign money does have a bottom, matter of fact, they’ve already surpassed it. If china cannot pour their money into your coal mines, its the same if they or the Japanese tighten their purse strings here. Were belly up.

    • GaryToo

      happening right now here in perth, mining city central.

  • Paul M

    Michael good visuals and analogy with the black hole.



  • John Jackson

    You have got to be crazy not to see the writing on the wall. Seize this moment in time as not a catastrophe but an opportunity. Find out how to thrive during before, during and after the collapse:

    • warren currier

      I think what you’ve posted here is referred to as SPAM, right?

  • Maria

    @Jonno But immigration isn’t the solution for all people who suffer currently.
    what will happen if ten of millions people immigrate in Australia?
    There is a common sense that something huge is comming in Europe.

    • warren currier


      As I see it, part of the entire equation is that you need to ‘save yourself’ whatever you choose that to include.
      You write: “what will happen if ten of millions people immigrate in Australia?”

      As well-meaning this question may be, what you’re asking is not relevant to your life.

      The truth is that tens of millions of people could not even find Australia on a map !!

      “But immigration isn’t the solution for all people who suffer currently”

      You may speak of “immigration” when you are thinking of entering a country.
      What’s the term for leaving a country?

      “all people who suffer currently”

      Again, focus on yourself first.

      Just yourself.

  • k

    Looks like all countries from socialist europe, to capitalist america to communist china, to mixed economies like india and brazil are never immune to slowdowns.

    I wonder which type of economic policy can gaurantee against recession??

    • “I wonder which type of economic policy can gaurantee against recession??”

      I think Capitalism would come closest.

      And no, there’s no such ting as “capitalist america”.

  • zed

    sorry jonno, but i wish to stay in amerika and be witness to Armageddon. also it is my true calling to be the leader of a post-apocalyptal gang. good luck down under.

  • the ragged trousered philanthropist

    As per usual you are dead on the money.
    I live in Europe and experience first hand all you write about.
    Like you in America though, most of us just think –
    Oh! – how bad it is in Greece and that we are OK, non of us seem able to recognise that we are ALL in just as parlous a state.
    There can be little doubt that what is likely to happen globally in the near future will be FAR WORSE than the great depression of the 1920’s/30’s and as my mum (god rest her soul) used to say.

  • sos

    the economy in australia seems to be trending downwards lately. both the retail sector and the job advertisements have gone through a significant reversal, along with a minus in manufacturing sentiment. if this ends up as a trend than it may bode ill for the u.s, since the anglo american economies follow the same trend…whatever the case europe holds the key

  • JustanOguy

    Personally, I think it should be more about focusing on what to do when it happens then worrying about the inevitable.

    When the cards collapse, there is going to be panic and the sheeple are going to be led to do whatever they are told just like 2008 — which turned out being a big mistake.

    Just look at all of the people out there that really do think big Government is the solution.

  • jox

    There are not negative comments about UK and the Pound? You don’t consider it part of Europe? Anyway, my opinion is that the Eurozone is managing the crisis in a quite intelligent way, always at the border of the abyss, to force the social, economical and political changes needed. The changes at the Eurozone that are taking place at full speed, if you look at them with historical perspective. And, contrary to what some Americans and Britons think, or even desire, the actual direction of the changes are towards a more tight integration, and not the explosion of Eurozone.

    The next epicenter will not be Europe. The BCE can always use the trick that UK and USA use extensively: to print money. The epicenter of the collapse will be the anglosaxon financial power, the City and Wall Street, where all this nightmare originated.

  • The picture of that galaxy is beautiful and amazing. God’s creation is unbelievable.

    Your last few lines reminded me of something John Mauldin has illustrated. It’s about putting the grains of sand on top of the sand-pile, and at some point in time there is a very rapid avalanche of sand that happens without warning and very quickly.

  • Bill

    I work as an investment accountant and I can concur with everything that you’re saying in this article.
    1) American companies are hedging against European sovereign debt and corporate bonds. The smart ones have dropped their European sovereign bonds altogether and their corporate bonds as well.
    2) The market for Credit Default Swaps are at an all-time high. Even those companies with a very conservative investment portfolio are getting into the game because their afraid of a gigantic wave of defaults stemming from Europe and then spreading like a plague across the globe.

    What they hope will happen is that an agressive CDS portfolio will protect them. They hope that when there’s a collapse of the global bond market, there will be enough liquidity in the currency market to keep them afloat through the worst of it. They may be right, but everything I’m seeing right now is that all they’re doing is installing water pumps on the Titanic. They’ll stay afloat for a little while longer than everyone else, but in the end we’ll all be sinking.

    Sorry I can’t provide anything more specific, but for now I need to keep my job. 🙂

    • Michael


      That was an excellent comment. I love when others add to the article like this. Thank you for sharing what you are able to share.


  • paul

    Not sure. Germany seems still ok. Just wanted to have a plumbers appointment and was told 4 weeks. They are busy. People are still shopping, the parking lot in front of the DIY market was full. Bus stops got bicycle stands which are full. Which means they use less cars and spend less on petrol.

  • Joe
  • Don

    I would LOVE to live in Australia, but at the age of 62 there is no way that we will be allowed in. I’ve banked there and earn a lot better rates, but I am unable to live where my money is.


  • Richard

    Excellent article but I need to draw your attention to a point of grammar: You say:

    Europe has a larger population than the United States does.

    Europe has a larger economy than the United States does.

    Europe has a much, much larger banking system than the United States does.

    You cannot write like that, Michael. “…than the United States does.” Does? Does what? If you think through the syntax, you will see that the “does” is redundant. It doesn’t refer to anything. You do this quite often and it is a common mistake, by the way.

    You have to say:

    Europe has a larger population than that of the United States.

    Europe has a larger economy than that of the United States.

    Europe has a much, much larger banking system than that of the United States.

    Just trying to be helpful…

  • GA

    “dominoes just keep falling and nobody seems to be able to come up with a plan to “fix” Europe.”
    That’s because there is no way to fix it. It’s too far gone, both over there and here. The big global reset is coming and now is the time to prepare while you still can. Get a preparedness plan in place without delay. Check out for some ideas. Educate yourself, learn skills, and ensure your family’s survival. If you do not, then don’t be upset when your standing hundreds deep in a soup line.

  • Kevin2

    Six weeks of vacation. A 37 hour work week. Medical bills covered. Pension at 55. Life was good until you exported your industrial base to the developing world and decided to maintain the illusion with ever increasing debt.

    • DB200

      Kevin2, don’t talk silly. Spain and Greece didn’t have any industrial base to begin with.

      The illusion of wealth started with the euro, suddenly everybody could take on loans at very low interest rates. This fueled inflation, a construction boom, a growing public sector, ballooning debt and eroded productivity.

      • GaryToo

        correct, the myth of the service based economy, it doesnt service the national debt.

      • jox

        Spain didn’t have any industrial base? Dear sir, I invite you to a trip in Spain. Not in the Mediterranean coast, but in the industrialized areas where there are not tourism. You will see, for instance, a lot of car manufacturing plants, from Renault, Volkswagen, Mercedes, Ford, etc. Of course, it’s not comparable with Germany, but it is more industrialized that many American states.

  • stale played out memes

    If the Euro goes down it is all the fault of George W. Bush.

  • Rodster

    Panicking Spaniards Pull Out Cash, Leave Country…

    Depression, Suicides Rise as Euro Debt Crisis Intensifies…

    Moody’s Changes Euro Zone Rating Outlook to ‘Negative’


    • Michael

      The hits just keep on coming, eh?


    • Rodster

      Pretty much sums up Spain and the EU:

      “After working six years as a senior executive for a multinational payroll-processing company in Barcelona, Spain, Mr. Vildosola is cutting his professional and financial ties with his troubled homeland. He has moved his family to a village near Cambridge, England, where he will take the reins at a small software company, and he has transferred his savings from Spanish banks to British banks.

      “The macro situation in Spain is getting worse and worse,” Mr. Vildosola, 38, said last week just hours before boarding a plane to London with his wife and two small children. “There is just too much risk. Spain is going to be next after Greece, and I just don’t want to end up holding devalued pesetas.”

      • jox

        Cherry picking examples? Would you want to compare the amount of people that leaves Spain and go to UK, with the people that makes the trip in the opposite way?

        • Rodster

          Cherry pick, really?! So the person who lives there says the situation is dire. The economy based on real data and stats released from the EU says the situation is dire! All those economies are spiraling into a depression, Greece is already there. And we are cherry picking. 😕

          Well continue to put your head in the sand because everything will be ok. Oh I forgot tonight is the start of the Football season.

          • jox

            The situation is very bad, that is no secret, in Spain, UK, US, and a lot of places. But I wonder with the interest of the media, specially British and American media, to do finger pointing to Greece before and Spain nowadays. Don’t you think that there are many citizens from UK, US, France, Japan, Ireland, and many other countries, that leave their countries and say EXACTLY the same words than Mr. Vildosola? Of course. The question is, why don’t you see them in the media? Something to think about. And indeed, Mr. Vildolosa leave Spain to go to UK? Wow, as if in UK there were not big problems, jobless, recession and a falling currency. Sorry but to me it looks as an advertisement coming from british government. A message to the thousands of retired britons that come to Spain with their pension. All this reasoning was the meaning of my ‘cherry picking’ expression, and not to deny the existence of very big problems.

            On the other hand, here the season of soccer started two weeks ago. 🙂 Best regards.

  • justamom

    BBC is reporting this morning (Tuesday, September 4) that Moody’s has lowered its EU rating outlook to negative. So the EU is on the brink of losing its AAA credit rating.
    Thanks for another great article, Michael. We count on you to keep us updated!

    • DB200

      The EU is not a country. So it does not have a credit rating. The countries that make up the EU all have credit ratings. And these ratings are now being reviewed.

  • aceraze


    Whats the impact of this to Canada Australia and Asia?

    • DB200

      Less export.

      • aceraze

        So basically there impact on these countries will be less. Do you think immigrating to these palces will be a godo option?

  • Mark


    When do you think the S will HTF bad enough for the uninformed here in America to see it? When it is trending on Yahoo? (sarcasm intended) When Facebook is talking about it? (sarcasm again)

    • Michael


      Sometimes it doesn’t hit home for people until they lose their jobs or they can’t pay their mortgages.


      • Nina

        That is what happened to me and my family, and sobered us up. My husband lost his job, I lost mine … and lost our home too. We are currently renting a cheap apartment in a bad neighborhood, had to apply for food stamps and Family health insurance. … and we have two marvelous college diplomas problably to fan ourselves when there is no more money to pay for the energy bill. But God is good, and I have faith that He will rescue us!

    • RICH99

      The ************** won’t hit for several years , like 5-8 years so don’t panic !!!

    • GaryToo

      when those clowns are tweeting “************************* and COL instead of LOL (crying out loud)”

  • Mark

    I’m from Europe, I know a little about Europe. There is a reason I’m heir in the USA!
    They always blame their problems on someone else.
    And as long as Angela Merkel is around, they blame her, till Germany has nothing left, than they blame the US, till we nothing left.

    Guys we Americans have one thing that the Europe does not have.
    We have a little document that we can point our fingers to.

    Nobody in Europe could ever point their fingers to a thing, only another person, and because of the parliamentary systems, there never was any individualism, only special interest groups. Do not under estimate the power of this document; The Constitution of the United States.

    Am afraid it might get a lot worse in our economy before it could rebounds but I have faith in it, we are the only ones in the whole world that has a constitution focused on what government can and cannot do. As most European countries have a Ground Law for every individual, including government.
    See the fundamental difference?

    O, and don’t forget, The Declaration of Independence,…read it…. Amazing… Than think about what it must have been like, under King Gorge III.

    Please keep the lights on Ron Paul.

  • RICH99

    This is all the same crap we have been hearing every year for the past 5 years and we will hear them next year also

    • Mondobeyondo

      Yes, it may happen next year as well – that whole “the sky is falling” thing, and then in 2014 everything might fall apart. And then you’d accuse us of being “the boys who cried wolf”. So, although things seem moderately well at the moment (assuming you have a job!), things can turn around in a heartbeat.

      Don’t count your eggs before they hatch. Chickens don’t hatch… well they do, but technically speaking, it the eggs that hatch, and they are baby chicks that eventually grow up to be chickens… oh gosh, not the whole “which came first” argument again!

  • Thanks for another great article Michael! I include all your articles on my website plus other great content about the banking system an our impending collapse! Keep diversifying away from paper everybody. the only things that are valuable in this world are those that are limited.

  • Germany is the linch pin in this whole mess. If they vote for the ESM to print money, their money will be devalued until it’s almost worthless and Germany remembers the Weimer republic fiasco and does NOT want that. But on the other hand if it votes against the printing of Euro notes and the buying of some of the debts of euro countries like Greece, Spain, Italy etc. then it’s game over immediately and everything comes crashing down big time, everywhere. Big decision for Germany crash now or Crash later..
    Germany is in a NO win situation.
    Better prep hard and fast. FYI with the drought and all Sam’s club 50 lb. bag of beans went from $36 to $39 better get them while you can!!! As the price will ONLY go up, even IF we don’t crash food is a good investment, better than gold if you ask me. You can’t eat gold. And a year from now it very well could cost you an ounce of gold for a 50 lb. bag of beans. Beans and Rice, Guns and bullets and don’t forget water and/or water filters and lots of them…

    • Mondobeyondo

      You can’t eat gold, but you can use gold to buy stuff to eat.
      A one dollar gold coin can buy a lot of potatoes.

  • Maria

    “we are the only ones in the whole world that has a constitution focused on what government can and cannot do.”

    You are wrong.Every European country has its constitution focused on waht goverment cann and cannot do. But currently it is being violated by the banks.
    Wake up ! There is only one law and that is the law of the banks and the bankers anymore.

    • Mark

      Some of their articles in their constitutions are directly to their government, however most of them are directly focused on their citizens, as a common law, including government that is the difference.

      You are right, heir in the US it is violated to an extreme extend, I hate to say it, but don’t blame the banks.

      Except for the Fed, that is a different one.

      It’s our government that got its fingers in the business, And allowed them to go past the principle force of markets.
      And in a competitive world, if something is being allowed by governemt, you better take it, or your neighbor will and takes over your market share.

  • Jonno

    Australia’s population is 21 million on a land mass almost the exact size as the USA. Most of us tend to hang on the coast but the inland is becoming more developed due to the mining boom.
    Yes $20 per hour to wait tables plus tips plus you are treated well by most people.
    Free medical and you are treated kindly. We don’t hate Americans just your governments with Bush the Younger in particular. Howard , who was in charge when Bush was around and who all Aussies considered a lap dog to the USA is vilified by most of Australia for being an arse kisser, something we don’t handle well.
    We would rather have yanks here then Sudanese refugees or Asian boat people.
    Food and fuel are expensive here but the good wages cover it.
    If any employer in Australia tried to pay an adult $10 per hour he would be on the evening news being laughed at.
    BTW we also get 4 weeks annual leave.

    • GaryToo

      “the inland is becoming more developed due to the mining boom”. Great big holes in the ground for chinese export is not development. The entire inland is uninhabited dersert. The boat people were asian in the 70’s, right after we finished liberating vietnam. Now we have finished liberating iraq and afghanistan that is where the boat people are coming from.
      BTW, you can buy as much there with 10$ as you can here with 20$. petrol is $1.50/litre , about 6$/gallon. A big Mac is about $5.

      The former PM JohnHoward was as George W put it “John’s a stand up guy!”, but with our two party political system, they diagre on everything EXCEPT TOTAL BLIND OBEDIENCE AND SUPPORT OF USA, no dissent there to “stay the course, not “cut and run”. So wake up mate they are all asskissers to George W, Clinton, Reagan, Obama all of them all the time.

      And for gods sake not everyone gets 4 weeks annual leave. I only ever had that working for govt. Plenty people have part time, casual or subcontractor jobs with no leave and no benefits. (those who still have jobs for a while)

  • Jonno

    And now the downside. There are so many things that can kill you in Australia it is a miracle any child gets over 10 years of age.
    In the water there are sharks, millions of them and they are a protected species. Also while out surfing one may encounter box jellyfish, blue ringed octopus, sea snakes or damn sea lice that suck blood from under ones arms. And of course when walking along the shore stonefish which will put you in hospital or an early grave. On shore is where it really gets interesting. 5 of the top 10 most venomous snakes, also protected, in the world, and now Steve Irwin, whose zoo is just down the road is not alive to come and take them out of your living room. Spiders as big as saucers and one , the funnel web spider can kill you while your sleeping. We even have a bird, the casowary, that has killed unsuspecting forest travelers. I’ve been clawed by a kangaroo and had my head peaked by a mating magpie. But you will get used to it all, if you survive. Ha Ha

  • Washington

    09/02/2012: While waiting in the Columbus OH airport for our flight to Oakland, I couldnt help but notice the two TSA women that were “testing” any and all liquids that people had in their hands. Now remember that this is inside the terminal, well beyond the security check and purchased inside the terminal…just people waiting to get on the plane!

    • DB200

      Sorry, but I had to laugh. This is so immense silly, I am amazed how these TSA agents can actually look serious doing this “important” work taking the piss out of every traveller they “test”. If I had to do this, I couldn’t keep a straight face for more than a minute.

  • DB200

    Today I hit a personal mark myself. The 100 euro mark!

    Yes, I did it, I managed to fill my tank with 107,48 euro worth of petrol. For the first time in my life I had to pay more than 100 euros for a tank of petrol. It were 60.08 litres or 15.87 gallons to be exact.

    Readers in the USA may wonder what these silly figures mean, well it means the following:

    At an exchange rate of 1.256321 dollars for one euro, I paid – hold your breath – one hundred thirty five dollars and 3 cents for a full tank of petrol. In figures: 135.03 U$.

    The price I paid for a gallon was 8.51 U$.

    Now all you guys paying a measly 4 U$ a gallon should smile and cheer, and stop complaining about high gas prices.

    As for me, I celebrated this fact with a good German beer. Cheers!

    • Michael

      Ouch. If gas was that high here I would never want to leave my home.


      • DB200


        I saw it coming. Petrol prices have been high historically in Europe but now are reaching stratospheric levels. The end is not in sight.

        That is why I entered a 3 year fixed-price energy contract with an electricity/gas company in May 2010. Yes, it will be renewed in May 2013 but the electricity market is also in crisis so prices are stable. Only gas is 30% higher but we don’t use that much of it. Besides, I have taken energy saving measures in the mean time, for instance a bigger fridge that consumes less energy than the old one. Next year I plan to install solar panels. I will try to look for a 5 year fixed price contract beginning 2013.

        That is also why my wife changed jobs one year ago and now works in the place we live.

        I am reading a book called “Living without oil, the new energy economy revealed” and it gives the trends on how the new energy economy will develop. It is not the book that readers of your blog or you will appreciate (neither do I) but it is important to read because it reveals the agenda of certain groups. And the trend watchers who wrote the book provided good trend forecasts in the past, so ignoring their forecasts is not wise.

        A few quotes:
        Page 14: “However, behind all the headlines there is a more optimistic picture – the birth of a new world order”.

        And on the same page 14:
        “As far as the figures quoted in this book are concerned, we have limited ourselves to only the most authoritative sources, such as reports from the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA).”

        Page 38:
        “In our opinion, population control must be tackled fast and with stringent measures. We suggest that the Chinese one-child policy should be implemented internationally, because the real environmental problem is that there are too many people on the earth.”

        This gives an idea, I guess.

    • “The price I paid for a gallon was 8.51 U$.”

      Not too bad. Here I pay about US$ 10 for one gallon diesel.

      What do you think about US$ 11 a gallon for 98 octane gasoline, Michael?

      Well, on a good day and with a bonus/benefit card I might actually get diesel down to US$ 8.51 a gallon. Paying with a credit card also helps me save some as I get interest.

      But with our unfathomable lousy roads and old cars, the fuel expense to distance driven ratio must be way worse than what you find in the USA.

  • Mondobeyondo

    Just when you thought it was safe to go to the hospital….

    You know, that NHS thing they’ve got in England might not be a bad idea.

    • Michael

      Wow that is just crazy Mondo.


      • DB200

        Now I can understand why a lot of people want Obamacare.

        Chandler Regional Medical Center, owned by Dignity Health, charged $39,652 per dose of Anascorp.

        Pharmacies in Mexico charge about $100 per dose.

        This is absurd.

        • Michael

          Yes, our health care system is a complete wreck.

          But Obamacare is only going to make it worse.


  • Jack Harper

    There is no correlation between the dirty ’30’s and what is coming.
    None whatsoever.
    All other depressions were regional.
    During the ’30’s 70% of the population lived on the farm and were self sustaining for most parts.
    We are entering uncharted waters insomuch as we are witnessing the first worldwide depression in all of history.
    When the U.S. $ collapses it be the most awesome God damned event to ever take place.
    Good Luck everyone.

  • no devastation will fall upon me, the reason why? prep,prep,prep,prep,prep,prep,prep,prep,prep,prep,prep, Get the idea?

    • “no devastation will fall upon me, the reason why? prep”

      Perhaps a few or more “non-preppers” will “fall upon” you, causing a heck of a lot of “devastation”; ever thought about that?


    ‘sensitive’ content in violation of a non-disclosure agreement!!!!SOUNDS LIKE A LAWYER!!!

  • richard s.

    friends; has good used Class A or Class C motorhomes for 15K or less, you can either bug out or stay put in comfort. fridge runs on propane so food (and beer) stays cold; microwave, toilet, shower, stove, ect. (make sure it comes with a generator). you are completely self contained and it sure beats sleeping on the ground in a tent. plus, if the economy completely collapses, there may not be anywhere to make your monthly payment!

  • CatNap

    I recall a couple years back Lindsay Williams was being interviewed by Alex Jones and said when the Euro collapses, the dollar has maybe two weeks before it follows.

  • Antonio Gonzalez

    “Do not under estimate the power of this document; The Constitution of the United States.”

    “The Declaration of Independence”

    Please we are living 2012.

  • aceraze

    Why not move to Canada, Australia, Asia then?

  • Syrin

    Care to explain why my posts got filtered out and the Marxist Gary gets post after post through?

    • Michael

      What posts got filtered out?

      I don’t recall deleting any of your posts?


  • Me

    I’m afraid it’s even more fun than you think.

    This is what you shall be up against. Note: This isn’t me. I ran into this on Youtube.

    Chilling. Because he’s correct.

  • kp

    Australia is flooded now with new zealanders and islanders ,taking all the jobs, muslims ,and constant fake refugees on boats arrive everyday, because the gutless Government wont do a thing to stop it ,the government spends millions a year looking after these parasites .white australia is disappearing and will be a thing of the past

  • Steve Harris

    kp, stop your moaning.
    These refugees are looking for a safe place to live to get away from the wars that the West has thrust upon their countries, Thats all I have to say about that.
    The rest of you, this is a sensalionalist article which is full of hysteria but short on facts. Sure the the Worls is going through some tough times and will for another year, but then the good times will resume. Media always highlights the bad and forgets to mention anything good, conveniently, as it so happens

  • Rodster

    “China Sounds Alarm on Global Economy”

  • Ron

    Its funny how many people think they can do better as a stranger in a distant land than at home. Debt is killing a bunch of countrys.My advise is to own a piece of dirt with something paid for to live in,even a small shack thats paid for,kicks butt.Some gardening,pick stuff that almost grows in spite of you.A weapon to defend yourself.Mabe a shotgun with some buckshot.Make friends.Join a local church,make more friends.Do some soul searching and make peace with God,you may join him soon.

  • STFU


    Move along.

  • Washington

    ‘If the euro fails…’ by Lead Editor 31 Aug 2012

  • “18 Indications That Europe Has Become An Economic Black Hole Which Is Going To Suck The Life Out Of The Global Economy”

    I’m not sure if I understand this. I’ve lived in Europe all my life (not far from 33 years) – actually I’ve never even visited any parts of the world outside Western Europa. My personal economy is better now than it’s ever been before. The past decade has seen an year-to-year improvement. Neither unemployment nor inflation rates are high. Salaries keep on growing.

    The low interest rates irritates me a great deal (less return on my savings) – as do the exceptionally high (and rising) prices on buying and renting property. In my view, the worst things going on these days are mass immigration and shockingly high petroleum prices.

    So what’s behind all this screaming about “financial crisis” that’s been going on for the past five years? If we’ve really had a five year (or even five months or weeks) long financial crisis, shouldn’t I have noticed it by now?

    Perhaps this is just a myth, like the AGW theory turned out to be.

  • Why Europe is economically still more sucessful than bankrupt America…see also the books of Emmanuel Todd, a french demographer und sociologist

  • Peak Oil and 9.12.

    15 Mind-Blowing Facts About Wealth And Inequality In America. Information Clearing House, Grafiken über Einkommens- und Vermögensverteilung in den USA

  • I agree, the next wave is going to absolutely devastate us–unless we have a contingeny plan in place. Tell me what you think: Do we need a contingency plan.

  • off grid kid

    “be the change you wish to see”
    Stay positive, start a permaculture farm and learn how to provide for your own family. Stock up on food, water and ammo while you still can. Teach the kids how to live off the land its there only chance at a future. Thats the only solution to this problem that I see. Mother nature can provide enough for everyone if we take care of her in the right ways.

Finca Bayano

Panama Relocation Tours



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