2012 is shaping up to be a very tough year for the global economy. All over the world there are signs that economic activity is significantly slowing down. Many of these signs are detailed later on in this article. But most people don't understand what is happening because they don't put all of the pieces together. If you just look at one or two pieces of data, it may not seem that impressive. But when you examine all of the pieces of evidence that we are on the verge of a devastating global recession all at once, it paints a very frightening picture. Asia is slowing down, Europe is slowing down and there are lots of trouble signs for the U.S. economy. It has gotten to a point where the global debt crisis is almost ready to boil over, and nobody is quite sure what is going to happen next. The last global recession was absolutely nightmarish, and we should all hope that we don't see another one like that any time soon. Unfortunately, things do not look good at this point.
The following are 22 signs that we are on the verge of a devastating global recession....
#1 On Thursday it was announced that U.S. jobless claims had soared to a six-week high.
#2 Hostess Brands, the maker of Twinkies and Wonder Bread, has filed for bankruptcy protection.
#3 Sears recently announced that somewhere between 100 and 120 Sears and Kmart stores will be closing, and Sears stock has fallen nearly 60% in just the past year.
#4 Over the past 12 months, dozens of prominent retailers have closed stores all over America, and one consulting firm is projecting that there will be more than 5,000 more store closings in 2012.
#5 Richard Bove, an analyst at Rochdale Securities, is projecting that the global financial industry will lose approximately 150,000 jobs over the next 12 to 18 months.
#6 Investors are pulling money out of the stock market at a rapid pace right now. In fact, as an article posted on CNBC recently noted, investors pulled more money out of mutual funds than they put into mutual funds for 9 weeks in a row. Are there some people out there that are quietly repositioning their money for tough times ahead?....
Investors yanked money out of U.S. equity mutual funds for a ninth-consecutive week despite a bullish 2012 outlook from Wall Street and a December rally that’s carried over into the New Year.
#7 There are signs that the Chinese economy is seriously slowing down. The following comes from a recent article in the Guardian....
Growth had slowed to an annual rate of 1.5% in the second and third quarters of 2011, below the "stall speed" that historically led to recession.
#8 The Bank of Japan says that the economic recovery in that country "has paused".
#9 Manufacturing activity in the euro zone has fallen for five months in a row.
#10 Germany's economy actually contracted during the 4th quarter of 2011. At this point many economists believe that Germany is already experiencing a recession.
#11 According to a recent article by Bloomberg, it is being projected that the French economy is heading into a recession....
The French economy will shrink this quarter and next, suggesting the nation is in a recession as investment and consumer spending stagnate, national statistics office Insee said.
#12 There are a multitude of statistics that indicate that the UK economy is definitely slowing down.
#13 The credit ratings of Italy, Spain, Portugal, France and Austria all just got downgraded.
#14 It is being reported that the Spanish economy contracted during the 4th quarter of 2011.
#15 Bad loans in Spain recently hit a 17-year high and the unemployment rate is at a 15-year high.
#16 According to a recent article in the Telegraph, the Italian government is forecasting that there will be a recession for the Italian economy in 2012....
The Italian government predicts GDP will contract 0.4pc next year, but many economists fear the figure is optimistic.
"We can say without mincing words that we have already slipped into recession," said Intesa Sanpaolo analyst Paolo Mameli. "We expect GDP to keep contracting for the next 3-4 quarters."
#17 Italy's youth unemployment rate has hit the highest level ever.
#18 The unemployment rate in Greece for those under the age of 24 is now at 39 percent.
#19 Greece is already experiencing a full-blown economic depression. About a third of the country is now living in poverty and extreme medicine shortages are being reported. Things have gotten so bad that entire families are being ripped apart. According to the Daily Mail, hundreds of Greek children are being abandoned because the economy has gotten so bad that their parents simply cannot afford to take care of them anymore. The note that one mother left with her child was absolutely heartbreaking....
One mother, it said, ran away after handing over her two-year-old daughter Natasha.
Four-year-old Anna was found by a teacher clutching a note that read: 'I will not be coming to pick up Anna today because I cannot afford to look after her. Please take good care of her. Sorry.'
#20 In Greece, large numbers of people are simply giving up on life. Sadly, the number of suicides in Greece has increased by 40 percent in just the past year.
#21 In many European countries, the money supply continues to contract rapidly. The following comes from a recent article in the Telegraph....
Simon Ward from Henderson Global Investors said "narrow" M1 money – which includes cash and overnight deposits, and signals short-term spending plans – shows an alarming split between North and South.
While real M1 deposits are still holding up in the German bloc, the rate of fall over the last six months (annualised) has been 20.7pc in Greece, 16.3pc in Portugal, 11.8pc in Ireland, and 8.1pc in Spain, and 6.7pc in Italy. The pace of decline in Italy has been accelerating, partly due to capital flight. "This rate of contraction is greater than in early 2008 and implies an even deeper recession, both for Italy and the whole periphery," said Mr Ward.
#22 The major industrialized nations of the world must roll over trillions upon trillions of dollars in debt during 2012. At a time when credit is becoming much tighter, this is going to be quite a challenge. The following list compiled by Bloomberg shows the amount of debt that some large nations must roll over in 2012....
Japan: 3,000 billion
U.S.: 2,783 billion
Italy: 428 billion
France: 367 billion
Germany: 285 billion
Canada: 221 billion
Brazil: 169 billion
U.K.: 165 billion
China: 121 billion
India: 57 billion
Russia: 13 billion
Keep in mind that those numbers do not include any new borrowing. Those are just old debts that must be refinanced.
As I mentioned at the top of this article, things do not look good.
The last thing that we need is another devastating global recession.
As I wrote about yesterday, the U.S. economy is in the midst of a nightmarish long-term decline. The last major global recession helped to significantly accelerate that decline.
So what will happen if this next global recession is worse than the last one?
Sadly, the people that will get hurt the most by another recession will not be the wealthy.
The people that will get hurt the most will be the poor and the middle class.
So what should all of us be doing about this?
We should use the time during this "calm before the storm" to prepare for the hard times that are coming.
As always, let us hope for the best and let us prepare for the worst.
But things certainly do not look promising for the global economy in 2012.
finally people will sart getting enough exercise- at least those who choose to survive.
Just remember, the recession officially ended in July of 2009.
Now, go out and get yourselves some jobs, you lazy bums.
(hey, it didn’t work for me either. I’m still unemployed.)
Yeah, let’s tell “fat-boy Gingrich” to push away from the lard in his life!
If conservative ideas were that much more virtuous than liberal ideas, then conservative parts of the country would have fewer social pathologies than the liberal parts of the country. They don’t. They are actually worse in that the “family values” red states have HIGHER rates of divorce and teen pregnancy than the liberal blue states.
Not only have conservative ideas with respect to morality failed but the most conservative states in the country are also the poorest.
This is data anyone can google and see forthemselves this is true. Sorry right wingers-your policies are a failure.
Some of this was taken from an article by David Brooks in the NYT.
Typical lazy ass regressive. Make a statement as if factual, provide NO evidence, but then expect OTHERS to do the WORK for them. Wonderful.
So you mean those bations of morality like Detroit, Chicago, Memphis and California, eh?
Hey Gary, when you look at Detroit, what makes you think to yourself, “The whole country should be just like this”? That’s what you’re pushing for.
I agree with all of your observations but you never ask the most important question – why? So let me help you. The reason that divorce rates are higher in the conservative parts of the country when compared to the liberal parts is because most liberals don’t get married – so they don’t have to get divorced. The reason that teen pregnancies are higher in conservative states when compared to liberal ones is that in conservative states, the parents are still trying to hold on to some semblence of family and morality. Liberals don’t believe in family or morals so they just put their kids on birth control to begin with. And the reason that conservative states are poorer than liberal ones is that many more liberals work in government and confiscate their prosperity by voting in government officials who given them what they want and let the taxpayer be damned.
So what you say is true but the reasons do count.
That does not surprise me that conservative states are poor. The states that are more liberal, California for example, have industries that cater to pedophiles, sex-freaks, sex trafficking and houses the porn business’s film making. California has terrible unemployment now. The liberals have shut off the water to the farms, due to some small animal that would be overrun or killed. So, the smart liberals that they are, (they are making money, right?), they kill an industry and put most of the people out of work. See 60 Minutes for that report. I would rather be farming and without a lot of the luxuries that the liberal states promise you. I would rather do without the politics of letting my state be overrun with illegal aliens. They don’t and have never upgraded the place. California looks horrible! Why illegals paint their businesses such garish colors amazes me. Do they want to retain what they left? Yup! They dont’ want to fit it. Their businesses have scarred the West Los Angeles area and not upgraded the area.
Yeah, I would rather live in a white populated area. The culture there is one that I understand. There are no language barriers amongst us. No one speaking another language in front of us, rudely. No one with their hand-out. Are all white area like that? No. I just prefer to be with my people, as the black and the brown have stated that they want to be with their people, too. Let’s all surround ourselves with our own cultures. We can be tolerant of others, but we don’t have to live with them.
What a rant. If you read this and post that I must be a Natzi, you are wrong. I am a 50′s kid who was raised in an all white area and that is what I want. People around me like me! People I can understand!
Annette, I feel bad when I read comments like yours but I can understand it. I am Black and I live in a white neighborhood. Most of my neighbors are glad to have me and my wife as neighbors and they have learned from us as we have learned from them. There are a lot of Blacks that aren’t interested in assimilating because they have faced so much resistance that they feel “why should I try to get along with them when they keep treating me like this”. I’m sure those are the type of people you encounter that reinforce the feelings you have. However, after so many decades of observing that most people just want the basics in life, I realized that we spend a awful lot of time focusing on our differences instead of our similarities. There is another thing that you aren’t considering, Annette (I read one of your later posts)…you can’t just have yours and let others worry about getting theirs. The damage that has been done to the Black race is not as simple as “that’s done now so get over it”. It will take a lot of understanding, nuturing and financial assistence and education to get some to normalcy and it is taking so much longer because there are a lot of people with an attitude like yours. What puzzles me is that those with similar attitudes will tout themselves as moral and Christian. I also realized why our neighbors enjoy our presence…it gives them an opportunity to understand some of our differences which makes us all more ‘whole’ as people. There was some discomfort at first but when they realized we were not those Blacks that are easily offended (I admit that is a problem with some Blacks) we all get along just great now and that’s what it’s all about. The opportunity to live alongside and understand each other is essential to a better world. You will never be able to run far enough. I hope that some day you will open your heart but I’m not too optimistic being that you are a child of the 50s. I am too…but I have learned as I’ve grown older.
I think the difference may be that some liberals don’t bother to get married. They just live together. Thus the lower divorce rate. Plus, many liberals appear to have less of a problem with the moral questions surrounding abortion. Thus more abortions; less teen pregnancy. It is important to look at all the facts, not just isolated statistical information.
The mankind will soon be forced to go back to basics, farming, hunting and gathering in that order! Just move your clock 80 years back and you will realize that mankind had been surviving with almost the same lifestyle for more than 2000 years by just doing farming, hunting (includes fishing) and gathering. Everything changed with the advent of oil, machines and computers. This crazyness will stop when the cost of oil becomes unbearable. A time will come when mankind will realise that they will need only three basic necessities in life which is food, shelter and clothing and not Iphone, Ipad and a car. It’s high time the governments take up initiatives to encourage these basic economic activities. Fortunately for you guys America is a huge continent, there is a lot of land, water and resources for all the unemployed youth of your country. And finally the youth must be taught to take care of the old which was how things were a century ago!
How about replacing all this gloom with a list of simple practical ways of turning this mess around, or are you happier to be a latter day Job? We are talking ourselves into a depression.
There might be ways to turn this around, but no one in public office will listen. So, we are watching the decline of America. Get yourself prepared. There is still time to do that. We don’t know when that time will run out, so be careful. Take care of you, cause I won’t. I will be taking care of me and mine. You need to take care of you and yours!
Agreed Alan. Problem is these are stated facts, and who are we going to get to listen to our practical suggestions? Maybe we can buy some ad time on American Idol or even the Super Bowl?
I believe the first crisis for 2012 will be Greece defaulting on their debt. After that, the gradual breakup of the Euro Zone. The various European countries will end the Euro as a common currency and each country will return to their original currency. It will probably take a year to complete.
Fred, have you heard of the Bancor? If not, look it up.
Can someone please explain to me how the maker of Twinkies goes bankrupt in this country?
I can’t believe that there will be no more Twinkies. But what really hurts is the demise of the Chocodiles. It is time to check out “survivalrealestate.com”..The times and the half times are at an end and the time for the changes is at hand. (Edgar Cayce)
well i know i have not had a job for more than a year. took me a year to get a job and then it was making 20 less than the one i had previously. so here i am at 40 working for 1/2 the pay i did 3 years ago, but mind you i am glad i found something. they keep trying to paint a picture of recovery and … i jsut dont see it. i have 2 BS degrees and I have friends that are out of work and been looking etc, theres just nothing there. and everyone is depressed. my best friend lost his home and moved back in with with father and mother at 41. his wife lost her job and they couldnt afford their mortgage payment (3 years ago she was making 80 k a year and after a year of looking landed a job for 24. talk about a pay cut..). the bank wouldnt let them refinance. my cousin has been out of work for 3 years. just working part time as a cable guy (4 years ago he made right at 35 a year). I could go on for hours.
It is a shame to see what so many people are going through and I really trace our demise back to all the (alleged) free trade agreements that moved millions of factory jobs offshore and along with it all the support jobs that depended on those factories.
The factor I remember from back in the debates on free trade was that one factory job supported appx. 4-6 other jobs when considering all the white collar positions as well as small businesses in the community that depended on those factory workers.
I can still remember the sneering, derisive comments made by the politicians (who sold out) about how we unwashed, stupid Americans were clueless when it came to the global economy.
I wish Ross Perot would make a 10 sec. commercial where he bellows: ‘How you like me now!!!’
“#1 On Thursday it was announced that U.S. jobless claims had soared to a six-week high.”
Today the jobless claims fell to an almost 4 year low! Why dont you write a blog about this? Instead of picking every negative story out there and blogging about it!
Be a little more balanced!
Its simple…you do not need an economist or a rocket scientist to explain whats going on..its a “HOUSE OF CARDS” that’s COLLAPSING. So the collapse of one card leads to the collapse of the next…until finally all cards have collapsed. This will take time…like a couple of more years. In economic terms, what it really means is that layoffs in one business, industry or factory is leading to more layoffs in other businesses and industries. Until finally we have a huge population of young, skilled workers/college graduates who are unemployed and without a secure job over the working period of their lives. Just like what happens in third world countries.
GO AND READ YOUR BIBLES…YOU CAN BE SAVED BEFORE IT IS IS TOO LATE….
We all need to remember that we are all in this together. I for one, do mind shareing. Ill also stop a thief in a heartbeat. We are going to be forced to work together and set aside the petty crap. Like it or not
The reason of decline is plain and simple, however it is not something that is allowed to be discussed rationally. It starts and ends with the letter N. In other words, the falling apart of the USA and countries like the UK and France is almost entirely demographic, neither economical, nor political IMO.
[...] Whether their motives are pure or not, they are telling the truth about the global financial situation in this case. As I have written about so frequently, there are a whole host of signs that indicate that we could be on the verge of a major global recession. [...]