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 The warning signs are all around us. All we have to do is open up our eyes and look at them. Almost every single day there are more prominent voices in the financial world telling us that a massive economic crisis is coming and that we need to prepare for the worst. On Wednesday, it was the World Bank itself that issued a very chilling warning. In an absolutely startling report, the World Bank revised GDP growth estimates for 2012 downward very sharply, warned that Europe could be on the verge of a devastating financial crisis, and declared that the rest of the world better "prepare for the worst." You would expect to hear this kind of thing on The Economic Collapse Blog, but this is not the kind of language that you would normally expect to hear from the stuffed suits at the World Bank. Obviously things have gotten bad enough that nobody is even really trying to deny it anymore. Andrew Burns, the lead author of the report, said that if the sovereign debt crisis gets even worse we could be looking at an economic crisis that could be even worse than the last one: "An escalation of the crisis would spare no-one. Developed- and developing-country growth rates could fall by as much or more than in 2008/09." Burns also stated that the "importance of contingency planning cannot be stressed enough." In other words, Burns is saying that it is time to prepare for the worst. So are you ready? (Read More....)
 The European debt crisis has just gone to an entirely new level. Just when it seemed like things may be stabilizing somewhat, we get news of huge financial bombs being dropped all over Europe. Very shortly after U.S. financial markets closed on Friday, S&P announced credit downgrades for nine European nations. This included both France and Austria losing their cherished AAA credit ratings. When the credit rating of a country gets slashed, that is a signal to investors that they should start demanding higher interest rates when they invest in the debt of that nation. Over the past year it has become significantly more expensive for many European nations to borrow money, and these new credit downgrades certainly are certainly not going to help matters. Quite a few financially troubled nations in Europe are very dependent on the ability to borrow huge piles of cheap money, and as debt becomes more expensive that is going to push many of them over the edge. Yesterday I wrote about 22 signs that we are on the verge of a devastating global recession, and unfortunately that list just got a whole lot longer. (Read More....)
 The euro is a dying currency. On Thursday, the EUR/USD fell below 1.28 for the first time since September 2010. In fact, as I write this the EUR/USD is sitting at 1.2791. Back in July, the EUR/USD was over 1.45. But this is just the beginning. The euro is going to go a lot lower. At this point, there are several major European nations that are on the verge of default, the European financial system is overflowing with debt and toxic assets, and most major European banks are leveraged about as badly as Lehman Brothers was when it collapsed. Most Americans simply do not grasp the gravity of what is happening. Just because the Dow is sitting above 12000 and a few U.S. economic numbers have improved slightly does not mean that everything is going to be okay. As I wrote about recently, the EU has a bigger economy than we do and they have a bigger banking system than we do. U.S. banks are massively exposed to European sovereign debt and European banking debt. When the financial system of Europe collapses and the euro falls apart it is going to rock the entire planet. So you better look out below - the euro is coming down and it is coming down hard. After the euro implodes, nothing is every going to be the same again. (Read More....)
 The euro was a doomed project from the start, and now we are starting to see the endgame play out. Today, the euro fell to an 11-month low against the U.S. dollar. As I write this, the EUR/USD is at 1.2983. Back in July, the EUR/USD was over 1.45. As panic has swept the financial markets, the euro has lost more than 3 percent over the past three days. But this is just the beginning. When the euro drops below 1.20, analysts will talk about the collapse of the euro. When the euro falls toward parity with the dollar, headlines around the world will scream about the death of the euro. But when the European financial system finally collapses, we may very well actually see the end of the euro. Yes, it actually could happen. The eurozone, as it is currently constructed, simply does not work. You just can't take 17 different nations that have 17 different fiscal policies, 17 different tax policies and 17 different economic agendas and cram them all into a single currency and expect the thing to work. The euro is a doomed currency, and if a big nation like Germany decides to walk away at some point the game is going to be over. (Read More....)
 Is the world on the verge of another massive global financial collapse? Yes. The western world is drowning in an ocean of debt unlike anything the world has ever seen before, and our financial markets are gigantic casinos that are dependent on huge mountains of risk and leverage remaining very stable. In the end, this house of cards that has been built on a foundation of sand is going to come crashing down in a horrifying manner. Usually in this column I go on and on about why things will soon get much worse. But today I am going to take a bit of a break. Today, I am going to let some of the top financial professionals in the world tell you why things will soon get much worse. Many of the quotes that you are about to read just might make the hair on the back of your neck stand up. Most people out there have no idea what is about to happen. Most people out there are working hard and are busy preparing for the holidays and they are hopeful that the economy will turn around soon. But that is not going to happen. We are heading for another major global financial collapse, and when it happens the U.S. economy is going to get even worse. (Read More....)
 A lot of people were puzzled about what German Chancellor Angela Merkel meant when she recently stated that the ultimate solution to the financial crisis in the EU would "mean more Europe, not less Europe". Well, now we are finding out. A leaked internal German government memo entitled "The Future of the EU: Required Integration Policy Improvements for the Creation of a Stability Union" actually proposes the creation of a "European Monetary Fund" which would be given the power to run the economies of troubled European nations. This "stability union" would be quickly followed by the creation of a full-fledged "political union". Essentially, this leaked memo proposes the creation of a "European Superstate" which will be crammed down the throats of the rest of Europe whether they like it or not. National sovereignty would be a thing of the past and European bureaucrats would run everything. Of course this will never be accepted by the people of Europe until they feel the bitter pain of the coming financial collapse, but we are starting to see that there is already a clear plan for what the Germans wish to implement in the aftermath of the coming crisis. (Read More....)
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The Coming European Superstate That Germany Plans To Cram Down The Throats Of The Rest Of Europe