The Beginning Of The End
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Kicking The Can Down The Road

Has Europe finally been saved this time?  Has this latest “breakthrough” solved the European debt crisis?  Of course not, and you should know better by now.  European leaders have held 18 summits since the beginning of the debt crisis.  After most of the preceding summits, global financial markets responded with joy because European leaders had reached “a deal” which would supposedly solve the crisis.  But a few weeks after each summit it would become clear that nothing had been solved and that the financial crisis had actually gotten even worse than before.  How many times do they expect us to fall for the same sorry routine?  Nothing in Europe has been solved.  You can’t solve a debt problem with more debt.  European leaders are just kicking the can down the road.  More debt will relieve some of the short-term pressure, but in a few weeks it will be apparent that the underlying problems in Europe continue to grow.  Unfortunately, there is not an unlimited amount of EU bailout money, so once all of these “financial bullets” have been fired European leaders are going to find that kicking the can down the road will not be so easy anymore.  The truth is that the financial crisis in Europe has not been cancelled – it has just been put off for a few weeks or a few months.

Do you solve the problems of a credit card addict by giving that person another credit card?  Of course not.  You may delay the short-term financial problems of the credit card addict by giving that person another credit card, but in the process you make the long-term problems even worse.

Well, that is essentially what is happening in Europe.  European governments and the European financial system have become ridiculously dependent on debt.  By giving European debt junkies another “hit” or two it may relieve a bit of short-term suffering but it doesn’t solve anything.

Just think about it.

Did the first bailout package solve the problems in Greece?

No.

Did the second bailout package solve the problems in Greece?

No.

Today, the Greek financial system is a complete and total mess, and Greek politicians are saying that a third bailout package may be necessary.

Many are claiming that Italy and Spain have been “saved” by this new deal, but that is a joke.

Yes, the ability to inject bailout funds directly into troubled banks is going to keep some of them going for a little while.  But the deal also calls for a new governing body to be established that will supervise those banks.  Will that governing body be established in time to even provide the short-term help that is needed?

Yes, spending bailout funds to buy up Spanish debt and Italian debt will artificially suppress bond yields for a time.

We have seen this before.

But what happened?

After the bond buying program was over, bond yields started spiking again.

So do the Europeans plan to suppress bond yields forever?

Of course not.  There is not enough bailout money to do that.

Let’s review the equation that I have shared in previous articles….

Brutal austerity + toxic levels of government debt + rising bond yields + a lack of confidence in the financial system + banks that are massively overleveraged + a massive credit crunch = A financial implosion of historic proportions

Have any of those elements been removed?

No.

Bond yields will be suppressed for a period of time, but that will not last forever, and all of the other underlying issues are still there.

Meanwhile, the rest of Europe continues to follow the Greek economy into economic depression.

The Spanish economy shrunk again in the second quarter of 2012, and austerity in that nation has barely even begun.

As a recent CNBC article detailed, the big spending cuts are still coming….

The conservatives, who inherited from the outgoing Socialists one of the euro zone’s highest public deficits, at 8.9 percent of GDP in 2011, have said they will shrink the shortfall to 5.3 percent this year and 3 percent in 2013.

Austerity has absolutely shredded the Greek economy, and we are starting to see that same pattern be repeated all over Europe.

When you spend far more money than you bring in for decades, eventually you have to go through a very painful adjustment.  What is going on in Greece should be a lesson for all of us.  Debt allows you to live above your means, but the consequences of going into way too much debt can be absolutely horrific.

More debt can delay the consequences of a debt problem but it cannot solve a debt problem.  The following is what Jim Rogers told CNBC on Friday….

“Just because now you have a way to get them (the banks) to borrow even more money, this is not solving the problem, this is making the problem worse,” Rogers said on Friday.

“People need to stop spending money they don’t have. The solution to too much debt is not more debt. All this little agreement does is give them (banks) a chance to have even more debt for a while longer,” he added.

But if you just went by the headlines in most of the newspapers around the world you would think that European leaders had discovered the cure for cancer or something.

Sadly, the truth is that they are simply choosing to fire off a few of the “financial bullets” that they still have left as a recent Washington Post article described….

The European bailout funds don’t have unlimited resources. If they throw $125 billion at Spain’s banks and another couple hundred billion toward Italy, pretty soon they’ll be running low. The only entity with unlimited euros is the European Central Bank. And right now, there’s no talk of using the ECB to provide bailouts. Which means that this latest move might have just forestalled the crisis, rather than ending it permanently.

So what comes next?

Bruce Krasting believes that the “half-life of this bailout will be measured in weeks”.  The following is his summary of what he sees coming next in Europe….

If I’m right, after a few weeks things turn south again in the capital markets. Then what?

- More LTRO. No – there is no more collateral. All of the swill loans have already been hocked.

- Cut ECB % rate. Doesn’t matter. It won’t change conditions in Italian or Spanish funding markets one bit.

- A spending plan of <1% of GDP. That won’t put a dent in the recession that is building.

- Brussels buys more sovereign bonds to avoid a catastrophe of Italian 10-year exceeding 7% (capitulation). Sorry. There are “wise men” in Germany who will simply not allow this to happen in the scale that is required.

- The ECB goes Defcon 1 and launches a E2T QE program. No – same answer as above.

- Merkel does a 180 and embraces Euro bonds. No chance in hell.

-The US or China are going to start buying EU bonds? Lunacy – not happening.

-The IMF will come to the rescue? No way – the IMF does not have the resources to solve anyone’s problems.

In other words, kicking the can down the road is going to get quite a bit harder after the current “sugar high” wears off.

Europe is still headed for the greatest financial crisis since the Great Depression (at least) and European leaders seem powerless to stop it.

Of course the United States is also facing a crisis of too much debt and a great day of reckoning is on the way for this country as well.

So yes, the global economy is still heading for collapse and there is still a multitude of reasons to be extremely concerned about the second half of 2012.

What is your opinion about all of this?

Do you think that European leaders will be able to keep kicking the can down the road?

Please feel free to post a comment with your opinion below….

  • DieselDan

    Great a few more weeks for me to prepare! I’m all for a lil more time to get squared away. On a side note this is my first post and would like to give Michael a big thanks for all the hard work, great site!

    • Michael

      DieselDan:

      Good to hear from you, and I hope that you will comment more often. :)

      And it means a lot that so many people enjoy the site. I work so hard on these articles and it warms my heart to know that people enjoy the final product.

      Michael

      • Larry

        fwiw, I also enjoy your site immensely, and check every couple days for an update, and usually are rewarded! Keep it up, good work.

        • Michael

          Keep on checking because I will keep on writing. :)

          Michael

  • BFH

    There is no way in hell that we in the U.S. can survive. We are fast approaching our own austerity measures and that will topple an already unsteady economy. There are no jobs! Manufacturing will NEVER come back. The value of the buck is dropping and this summer is killing off the food crops. I wish someone would play devils advocate with me and give me ANY,LOGICAL,REASONABLE way we can survive. We are doomed economically. Debt has just about reached the debt ceiling of 16.4 trillion and they will certainly raise it yet again on or about election time. What choice do they have? The question of “if” we collapse is a moot point it is truly just a matter of when. 50% of the people are living pay check to pay check just waiting for some small emergency in their life to come about. My own job has cut hours so much I’d just about be as well off if I quit. It’s coming folks, like it or not!!

    • Mad Max

      We have one last hope. Don’t give up yet. They call the nuclear option because we’ve exhausted all the other options.

      “Be Smart!” –
      FIGHT THE CAUSE – NOT THE SYMPTOM

      U.S. Citizens
      Read “Common Sense 3.1” at ( http://revolution2.osixs.org )

      Non U.S. Citizens
      Read “Common Sense 3.2” at ( http://SaveTheWorldNow.osixs.org )

    • grochef

      Great post, BFH. My wife and I have been discussing these issues for three years. I thought the collapse was coming a year ago.

      Question for Michael:
      If the ECB and Fed can print at will, what is to keep them from doing that indefinitely? This constant tension is killing all of us who see it coming. We continue on with our lives, but with a feeling of dread that at any moment it’s all over. Yet, it keeps on going. The puppet masters are very powerful.

      • Michael

        The ECB is structured a little different from the Fed.

        Right now, Germany won’t let the ECB print wild amounts of money. Unless that changes, that is going to greatly restrict what he ECB is able to accomplish.

        Michael

        • Jeff

          What is Germany afraid of, inflation?

    • Your Johnson

      “the value of the buck is dropping”, “there are no jobs”…………. This is hysteria not based in reality.

      The value of the Euro measured against the Dollar is dropping = Fact.
      There are jobs, but the unemployment rate remains stubbornly high (and is not measured correctly to incorporate underemployment and workers that have permanently dropped out of the workforce). = Fact

      • GaryToo

        the value of the dollar is only the petrodollar. for a start the spiralling us debt clock will eventually lead to a default. secomdly many other up and coming strong economies eg briics are moving away from dollar. this matters in buyiong OIL. so far any country that has tried to sell oil outside us dollar has had regime change enforced, but the countries moving this way now are too big to be toppled. (other than irraann, but that will get out of hand.)

    • El Pollo de Oro

      BFH: I would love to disagree with you, but I can’t. An overwhelming amount of evidence proves that you are absolutely right. We’re screwed. I renamed this country The Banana Republic of America because more and more, we are turning into a Third World economy with a wealthy minority and a poor majority and no middle class. The American middle class is on life support. Exactly HOW poor will this country become? I’ve been saying that economically, we’ll end up like Guatemala or Honduras (a minority of Guatemalans are filthy rich, while most are poor). But what’s really ironic is that as pessimistic as I am, I occasionally meet someone who thinks I’m overly optimistic (go figure) and that the BRA economy is so diseased that we’ll end up like Haiti.

      • Ian

        have you actually visited a third world country? We, in no way, resemble a third world country.

        And guess what, even if we do become a third world country, doesnt mean we wont be happy. I see more smiles on faces in 3rd world hellholes than i ever do in the u.s.

        • El Pollo de Oro

          Ian: I’ve been to both Latin America and North Africa. I’ve seen what life is like in countries with little or no middle class, and that’s what The Banana Republic of America has been turning into. This economic crisis is no joke. The robber barons made a huge mistake when they decided to kill off the American middle class, and they’ll get a nasty dose of reality when they see how violent and dangerous banana republics can be.

  • Rodster

    Q: “Do you solve the problems of a credit card addict by giving that person another credit card? Of course not.”

    In Gary2’s world you do. :)

  • beezer

    Lets play kick the can.
    Who can kick it the farthest.
    But one day we will all pay.
    And that price will be unbearable
    Like our wife AND our children too
    PLUS all we own, our homes, our cars, boats, RV’s, all our money, our jobs, our clothes, and when we are running around naked in the woods they will come for MORE, and we will have to pay MORE!!!

  • McKinley Morganfield

    Its deja vu all over again. :-( Like Yogi says, “When you come to a fork in the road, take it.” There is only one solution and of course they will not take it, it will be forced upon them (and us).

  • jacobdickerson

    That’s why we got smart politicians they figure out how to keep kicking the can down the road

  • ScoutMotto

    We know eventually the poor can is going to get its last kick. Europe is on the edge, and now I am hearing multiple reports that the US has three months, give or take. I may get one last road trip in before it all falls down.

    I have a letter from the US Treasury where some official there in the 90s assured me they have no intention of letting things fall apart. I have it in writing, so it must be true, right? Right…?

    Yeah, I know.

  • mark

    I am not even sure that this current bailout will last two weeks before the interest rates start too creep up. All of the governments in Europe and our own country need to cut spending in a smart way. First governments need to cut wages and benifits of government workers. We need to reduce the pensions of government retired workers. We need to cut all corporate welfare. We need to reduce regulations to business and also reduce the amount of government workers to enforce the regulations. If we are going to continue to fund medicaid and medicare, copayments need to increase. We need to stop cost of living increases to social security. We need to cut defense spending and stay out of wars at least while we pare down our debt. We need to drill our own oil on government owned land. With the huge increase in food stamp use the cost can be lowerd by only allowing bulk foods that are lower cost. This way people will not go hungry and we can cut costs. Many programs have been around forever and somr of them need to go away. If we are to spur business in the US, let’s get rid of some of these unfair so called free trade agreements so that the playing field is more level and jobs come back to the US. We might lower taxes along with the cuts so that the economy could grow. The coming pain will hurt and we will have to do what many Americans have have never learned and that is to really work hard to earn a living.

    • DB200

      Don’t worry. This will be done eventually. However not gradually, so that people have time to adjust. Nope, it will be done overnight, when all faith in the petrodollar disappears. Now, that will give some shock and awe.

      • McKinley Morganfield

        I agree DB200, it will happen suddenly. That is the way of economic catastrophes, one day its all going to work out fine and the next day a bank in AUstria fails and starts an avalanche. One day the DJIA is headed to new highs, then a situation blossoms over night and the market plunges. Its all psychological. One day the ‘experts’ are euphoric and the next day the panic sets in. Bad news travels like wildfire.

    • Snowleopard

      How much of this “debt” was incurred from bailing out banks and other big business? Why should Joe Sixpack suffer to pay it back? These banks are insolvent now anyway, and will fail eventually, so why indebt citizens to put off the evil day? Iceland had the right idea. Put insolvent banks out of business, and cancel the government debt to them.

      Here in the US it is absurd that the government “borrows” its own currency from a banking cartel, currency the Fed creats from nothing! We should just abolish the Fed and cancel the government “debt” to it and deal with the consequences. Better sooner than later.

  • Harry

    I’ve been following your great website for some months now. I live in Indonesia and would like to know your opinion on what would happen to Asian countries, such as mine, when both US and European economies finally fall…

    • Darien

      Asian markets will collapse also because of their dependence on selling most of their goods to the USA and Europe.
      Its finally killing the goose that laid the golden egg. Countries like China have been relentless in making and selling every product imaginable to Americans while buying almost nothing from Americans. They never thought of the consequences of Americans going broke because of this, being unable to pay for anything.

    • Kevin2

      If the US falls apart expect a lot of regional wars over food and energy. Think about what would happen if all of a sudden your police ceased to exist and that should give you a rough idea of what will happen.

      I think the US is pre positioning military forces in the event of the above to secure vital resources.

      • GaryToo

        ‘I think the US is pre positioning military forces in the event of the above to secure vital resources’

        UNDERSTATEMENT of the century. And it is inevitable they will be used, more than already.

  • Mustard Seeds

    The powers that be are incredulous.

    This is what they are thinking….

    How can so many people really not see the truth yet?

    Do they honestly still believe in and expect a solution out of this mess?

    Can they not see that we have already taken 90% of the power by reducing the value of their currency 90%?

    Can they not see that austerity and loans and money printing and bailouts were designed to transfer and centralize power into the new system even more rapidly?

    Wow, our public school system worked better than we hoped.

    They really believe everything we tell them.

  • tappedops

    American inversters who knock down less than 250 thou a day call it “kicking the can”… offshore bankers who make 250 million a day call it “extending leverage”… theres a slight difference…

  • Alex

    Lindsey Williams said it..the dollar will be dead by the end of the year folks :(

  • GaryToo

    Great rant michael one of your best.
    all the hype since the weekend has been only that banks can be “recaptitalized” directly without the debt going on the shoulders of citizens.
    ok fine thats not good but its the lesser of the evils. Now wheres the money coming from to “recapitalize”, oh they havent got an answer for that…I know how unpopular the hat being passed around in this country for a few lousy billion to bailout europe is, the germans have their pockets inside out alrerady.

  • Eschaton2012

    This did not work for a small economy like Greece, on what basis do people believe it can fix Spain and Italy? At some point enough people will be effected to where they will take to the streets to call for a referendum. But as of yet we the people stand by while the same people who got us into this mess dig us deeper in the hole. At what point do you think the world wakes up, if ever?

  • bojangles

    Just need to keep it going until september. then let the bottom fall out.

  • TXMoors

    I agree. My question is, why was the can really kicked down the road this time? The market went up 277 on the DOW on Friday. It normally goes up maybe 100 points. Second question is, why do investors still pump money into the markets knowing that nothing was solved?

    • DaytoDay

      You ever notice how the DOW seems to have record highs and lows month to month…

      It’s a casino…

    • John W.

      Mostly because it is not investors. they all left a long time ago when it became apparent that the market was rigged. These are the insiders at the big trading houses playing with the bailout money and knowing that any losses they incur will be covered by the taxpayers. Mostly they just buy and sell to each other churning the market. Look at the lack of volume almost like a classic pump and dump only really big. That was what was done in the S&L crisis where the scammers churned properties back and forth to each other. Easy when you own the bank and the appraisers.

  • pete

    “They” define what constitutes a “can”, “kicking”, “road” and “down”.

    We have already gotten to the point of Armageddon here and elsewhere and at the last minute….they come up with something to buy more time.

    For a time they could buy years, then months and now we’re down to buying weeks….soon, we’ll be buying days and then hours and finally minutes and seconds.

    In the end….they’ll say they tried everything and have no choice except to attack fill-in-the-blank country to fill-in-the-blank and in order to fill-in-the-blank.

    Remember, if you step half way to the wall, then half the distance again and then half again….you never do get there…..in theory.

  • Excalibur

    I don’t understand how long this road is for “kicking the can” down. There is not one course of action presented across the planet that indicates if we do X then this is how we avoid a global financial collapse. How many shemes does it take before the can is kicked off the cliff?

    • DaytoDay

      Because there is no solution. Total world debt is $200 Trillion, (Not counting derivatives)

      Do you know that means? There is more debt than there is actual physical money in existence. Meaning it can never be paid pack, because there isn’t enough currency in the world to pay it back.

      The ONLY solution is a collapse… It’s the only choice we have left…

      Think of it as God’s wrath on an impotent city (Babylon, Israel, Judah, Sodom, Gomorrah) You get the picture? When it’s unleashed, there is NO turning back…

  • markthetruth

    Litter Bugs !!!!!!!!!!!!!!!!!!!!!!!!!

    The end.

  • Gary2

    Michael–you should not be throwing your beer cans out the truck window when you drive, nor should you be consuming beer when you are driving. You are setting a bad example.

    (sorry Michael-could not resist–I like to think many of the pictures you use are from your photo album)

    We should also be recycling the can and not kicking it anywhere.

    • Michael

      You make me smile.

      I don’t think I would use pictures from my own photo album on the site. I would prefer to keep the focus on the issues rather than on myself.

      Michael

    • Alasha

      you want cookie? lol

    • GaryToo

      the can ended up in the ditch. U R meant to be calling out conservative inconsistencies as u promised. Nothing yet on the race to the bottom the company cannibal catchers mitt won to “get tough with iiirrraaannn. ” slackass.

  • Barn cat

    Austerity is a mixed bag. The eurozone needs massive spending cuts to its entitlement programs but tax increases keep slowing the economy down. The collapse is deliberate. The goal is turning the eurozone into a dictatorship with the endgame being world government.

  • http://Na Helen Macdonald

    You are absolutely right, as always, but the results of the latest can kick will be days, not weeks in my opinion.

  • justamom

    Michael writes:

    More debt will relieve some of the short-term pressure, but in a few weeks it will be apparent that the underlying problems in Europe continue to grow.

    After reading the article link below from the Wall Street Journal, Michael, it may not even last a few weeks!Thanks for a great post. I genuinely appreciate your research and analysis.

    http://www.marketwatch.com/story/euro-compromises-likely-to-unravel-2012-07-02

    • Michael

      Thanks for that link. Interesting analysis.

      Michael

    • GaryToo

      great article, so in a nutshell it is saying whatever promise/concession angela merkel made is a long way from ever having to be honored. So, everyone who thinks the latest agreement is a bailout is off the mark.

  • ScoutMotto

    I’d like to know what those people are saying now, the ones who decried independence as isolationism. Look what “interdependence” has got us. Look at what interlocking all of the nationas together has accomplished. Total ruin. I’m thinking we are just about out of time. Some finance companies are canceling vacations for all their people because they are preparing for a collapse. This coming 4th of July is nothing but a paid holiday to me.

    Happy “Independence” Day.

  • Evie

    Why do the banks get money to gamble and hope for people to take out 75% loans?
    Wow when I grow up I want to be a central planner. Just keep messing up and hope for the best.
    I am not a gambling addict so why should I be responsible?
    Yard sales are great, I never have to buy inflated goods.
    Even the rich will not have money under this kind of regime.

  • Dave in TN

    We’re often quick to attribute Europe’s and even America’s financial problems to the little people living beyond their means. Though true in a sense, it could have never happened had the banking systems been intelligently limited in the amount that they could leverage loans (by virtue of little or no reserve requirements) and because they were not forced to maintain prudent lending standards because the banks can expect (especially, the big banks) to get bailed out when they get in trouble. This is what is known as “privatized profits and socialized losses”. And this is where the REAL socialism has been going on both in Europe and America. Neither Obama nor Romney show any inclination to fix this structural problem for obvious reasons: $$$$$

    • GaryToo

      i was shocked when i learned the truth about “fractiona,l reserve lending” as a property investor/landlord i had aleways thought the bank had at least AS MUCH MONEY AS IT LOANED OUT. No, as it is u should be able to lend me a million or vice-versa with only a few hundred in reserve.

  • justanoguy

    Michael…

    The problem with your posts is that they are too long for the “everything is just fine” who won American Idol? crowd.

    You lose the Snooki followers after your first couple of lines….

    What’s KK up to???

    LOL…

    (Honestly…. your posts are too long for me to even care about reading them all the way through anymore.)

    Just a suggestion…. but if you want to spread the message to all of the simpletons that make up the majority of America nowadays….. you need to keep your posts very simple because it’s information overload for the majority of Americans.

    ;0

    • Michael

      You may have a point.

      What do the rest of you think?

      Are my articles too long? Should I make them shorter?

      Michael

      • Sam

        No your articles are not too long but just right.

      • mark

        I enjoy an article that is well thought out. Your articles are not over long and easy to read. Keep up the good work as I hope that many more will read and learn from your website. Thank You !

        • Michael

          Thank you Mark.

          I want to try to push the envelope and get this information out to as many people as possible. A lot of the readers take these articles and spread them around on the Internet, and I am so thankful for that.

          Michael

        • Cinderella Man

          I dont think theyre long enough!

      • uncurable wound

        Michael, The “everything is just fine” who won American Idol? crowd,is to lost to ever read your work.You are waking the people up who can be.
        What has dumbing down ever done for us?

        Hows that “No child left behind” thing going?

        Stay strong and bold Michael!

        Now for some criticism on a real issue! LOL!

        On a picture note-There is no road left-you should have a picture of a guy on a mountain top at the end of the road,kicking the can straight up in the air………and that can is in way to good of shape!
        God Bless you and your family Michael.

        • Michael

          Thank you.

          And may you be blessed as well. My wife and I often pray that everyone that visits this site would be greatly blessed.

          Michael

      • Someguy

        Michael,

        I think your articles are just fine, in fact I’d like to see more.
        My personal opinion is for the snooki/KK/idol crowd, they will wake up when they get
        hit in the face, unfortunately.

        There are more people awake than we realize.

        • Michael

          One of my goals is always to get this material in front of those people that still do need to wake up.

          So I am very thankful for the people that take a few moments to post these articles to Facebook and Twitter and other websites.

          It is a huge, huge help in expanding the reach of these articles.

          Michael

      • estamos jodidos

        Michael,

        I like your articles. I do not think they are too long, but that part of the problem is attention deficit disorder at a national level. The majority of people have been conditioned to be unable to focus for any length of time. As a result we are becoming less capable of understanding complex issues which can’t be presented in 30 second sound bites. Our news media and entertainment are geared toward re-enforcing this. Teenagers can’t go for 5 minutes without texting or something to keep up with their friends, etc.

        Keep the messages comfortable for your writing style. Those readers who are interested will follow. Please keep up the great effort to get the word out.

      • RickS

        I’m not a fan of the “X reasons why…” format you like to use, but no, your article aren’t too long.

        Those with short attention spans can just read the headline and go straight to the comments.

      • Deborah

        I enjoy every word of every article. Don’t change a thing! This is my favorite news source :)

        • Michael

          Deborah:

          That is very humbling to hear. Thank you.

          Michael

          • Gay Veteran

            Your articles are very informative!

      • DB200

        No they are just fine. Make them shorter and people won’t grasp the message. The length of your blogs is just long enough to let the message sink in.

      • GaryK

        I find your posts are well edited and are usually just the right length to cover the material/make your point. These are complicated issues and you cannot boil them down to sound bites. I suspect that those who are preoccupied with American Idol are not going to come here anyway.

        • Michael

          Another Gary. I am having a hard time keeping track of them all. :)

          Seriously though – thanks for your thoughts. I want to do the best job that I can.

          Michael

      • Excalibur

        I find you sum up articles well made by others that also aren’t part of the cheer leading “experts” that have an agenda to support when they try to spin everything is fine.

        It takes a lot of work to put together an article. Whatever you think it takes to get the information out there – please keep it up! I find myself coming back often just to see if you’ve put something else out there.

        At this point it is getting a bit unnerving that there seems to be such a huge percentage of the (US) population right now that are part of the “snooki/KK/idol crowd” which appear absolutely clueless of the financial global tsunami on the horizon. How they respond when they finally see what is happening as it plays out in front of them is the unnerving part. What may be scarier is it is actually beyond that crowd. My wife works for the president of a financial planning firm. Just last week she saw an email from one of the financial planners asking her boss if their client should sell their physical gold right now. At this point I don’t know what the response was, but we were both dumbfounded that even in the financial planning industry there seems to be a disconnect of what is going on globally.

        Which kick of the can is going to send it off the cliff, causing a fear event that ripples across the planet? There is so much going on I can’t believe it hasn’t happened yet! Your articles are part of my daily regimen to find information to help our family prepare. Keep up the good work. We need people like yourself out there.

      • HecatesMoon

        There is absolutely nothing wrong with the length of your articles.

      • Ranchers wife

        Your Articles are great just the way they are. I get so much good info that I can share with some of the “Idol crowd” (most of my family).Keep up the good work.

      • GaryToo

        they are in fact quite short (concise). If anyone does not have at least that attention span there is no hope for them.

      • JStevens

        Your articles are perfect in length. If somebody has untreated ADHD and can’t read past a few lines, that’s their problem.

        Don’t change a thing.

    • DaytoDay

      No, Michael, you don’t have to worry about the “snooki crowd” because they’re not here anyway…

      This is exactly what a lot of us here talk about… 300 words is too long… Now it’s 100… You know what, just make it audio/video because I’m too lazy (Don’t know how) to read…

      I’m sorry but I’m not worried about the snooki crowd, because as I see it, they’re already gone… And if they want to get woken up then they WILL read the article… I mean, why should we cater to sheep on their way to the slaughter???

  • Loop Garoo

    I give up. Let the Rebellion begin.

  • JJ

    I don’t know about Europe but here in the USA, the math doesn’t add up. 50% of workers in the US don’t pay taxes. Of the remaining 50%, nearly half of those have government jobs. Paying taxes with income derived from taxes is a joke. So it’s up to roughly 25% of us to pay for the other 75%. This was unfair but possible while we still had good paying, middle class jobs in this country. The middle class is being wiped out faster than the rain forest, thus wiping out the tax basis to pay for the other 75%. How long before we’re the center of attention and not Europe?

    • Gay Veteran

      How do 50% od workers in the US not pay taxes?!?!??!

      sales tax

      gas tax

      phone tax

      etc., etc., etc.

      • John W.

        Income taxes, not the same thing and that so many do not pay them is an indicator of economic mis allocations and a piss poor income level. Over half of the economy is based on not just debt but debt paid with counterfeit money by yjr govt. Ever read the leittle story of the hundred dollar bill that makes it’s way around town paying off this and that and when the person leaves taking it with him over a thousand dollars in debts are erased yet nothing was produced.

      • GaryToo

        so those taxes are only an outgoing percentage of free incone derivewd from those paying income tax in the private sector. actually the private sector can not support all that, most is DEBT.

      • JJ

        See John W. for comment.

        Has anyone ever considered how much help it would be to give QE directly to the people of the US? The story John mentioned, only SUPER SIZED!!! Give $1,000,000 to each family in the US and see how fast John & Jane Doe are out of debt. The money is still going to filter up to the top but it would actually do some good on its way there. This idea being an alternative to giving it directly to banks that loose 2 trillion on derivatives, only to say “OOPS”.

        Of course there is another idea, and my personal favorite. Business or personal; if you can’t manage money and you lost everything…..see you in bankruptcy court!!! If you get a second chance, maybe you won’t buy a $500,000 house when you only make $75,000 a year. Maybe you won’t pay executives millions for running a company into the ground and them bonus them even more when they are out the door.

        Back to the original point. The 25% that do pay taxes can no longer pay for the mistakes made above.

        I work away from home 6+ months a year. I go into some nastiest 3rd countries on earth to make a living. A standard work day for me is 12hrs a day. I live like someone who makes less than half of what I make (and in some cases, not as good) but I am virtually debt free. Why do I need to sacrifice all that to give money to others that won’t?

  • http://www.desertbill.com William Lane

    With this dire prediction of the future, one has to wonder not only how to survive, but how to make money from the crises. I wonder how many have the courage to sell stocks short? So far, I cannot muster the courage to do so.

  • Robert

    August – Federal Reserve opens credit window to ECB – 10 Trillion at .025%

    October 31 – ECB defaults on US credit. President Obama declares war on Pakistan and Saudi Arabia.

    300% income tax hike in US – President declares Martial Law as 100.000.00 americans refuse to show up for work. Food riots in all major cities.

    I can’t go on, but you get the picture……

    • http://Theeconomiccollapse Gregge Johnson

      I know you work for the World Bank in Johannesburg South Africa. They are the only ones privileged with this info.

  • Larry Highley

    This European harbinger should act as a warning to the American public. Sadly, there is the teflon mentality in our country that we are somehow protected from economic collapse. A day of reckoning is coming, and probably sooner than most expect. The only hope outside of a miracle straight from God Almighty is reduced spending AND higher taxes for everyone. It is the ugliest of ugly babies, and no politician in this country has the intestinal fortitude to be honest with the public. $16 trillion dollars does not go away magically, and that figure grows by $3.6 billion daily. You don’t have to be an economics major to see the writing is on the wall. The only question is when the Wizard of Oz’s curtain gets pulled back and we have to face the music.

    • mark

      If you make spending cuts along with higher taxes you will get the great depression replayed for a long time. You have to reduce taxes with major spending cuts to have a short depression. It is better to have a shot one than a long one. Look at what took place in the 1920’s vs. the 1930’s. The difference is profound.

  • Pitchfork Ready

    They have, as we have, been amazingly resourceful in kicking down the can down the road. Love these politicians and bankers or hate them, they are the Picasso’s of propping up this decaying, over leveraged fascist financial system. What a sight it will be when it comes crashing to Earth and sends millions into extreme poverty.

    And that will probably be the mundane part. The scary part will be the zombie army of Gary2’s that emerges from the wreckage, angry and bitter at being losers in their former life, and intent on evening the score in this next life. Dangerous, they will be.

  • john.s

    Nope. it’s a Recovery Now! (sarcasm) :-)

  • Ameen

    I hate to agree with every word you have written. That summit’s result was a complete joke, there is SO much pain ahead….

  • jsmith

    The articles are fine Michael! But I don’t think we will have a total collapse yet. The only recourse we have is to devalue the dollar even more. How you devalue a currency that has already been devalued by 95% is beyond me though. I’ll just keep on buying more silver, specially as it has been going down lately. Thanks for the articles, and just keep them coming!

  • Ralphieboy

    I am licking my chops as I accrue more physical gold and silver at very low prices. Also have some investments in some carefully selected mining stocks – my favorite is Silver Wheaton (SLW). When it hit $25 a share this week. I bought a bunch more. This fiasco is so predictable – it is money in the bank. The PTB can only manipulate the precious metals market just so far – and hardly any mainstream investors – with their trillions on the sidelines – have even considered PM invesments. The lid will blow off soon enough – and for too many, it will be too late.

    The present world central banking system is a farce, and most bankers know it. Trust me – a lot of people with money have already taken steps to protect their assets. Those who have not and who still believe in the mantra that all will be well, are living in a pure state of fantasy. Of course, these bozos will do all they can to delay the inevitable, but the day will come when in spite of their efforts to keep the disaster hanging together with baling twine and chewing gum, it will all come apart – there is no alternative. These criminals have been hell bent on milking us all and protecting themselves.

    Fortunately, long ago I learned – from an ecoomics standpoint – to govern my hard earned income based on two rules.

    First rule – He’s who has the gold makes tbe rules.
    Second rule – Once you know the rules these guys play by, you can beat them at their own game.

  • ???? don gill

    MICHAEL-JUST READ THE GUY WHO COULDN’T STAY FOCUSED FOR MORE THAN A FEW NANOSECONDS. I ALWAYS THOUGHT YOU DID A GREAT JOB WHEN YOU DID SUMMARIES(BRUTAL AUSTERITY+TOXIC DEBT=ETC., ETC.) I PERSONALLY ENJOY THE DETAIL AND COMMENTARY OF YOU AND THOSE WHO ARE IN THE KNOW THAT YOU REFERENCE AND I PERSONALLY WOULDN’T WANT TO SEE THAT CHANGE IN ANY WAY. MAYBE A BRUTAL SUMMARY AT THE BEGINNING OF YOUR PIECES(SORT OF A HOOK) WOULD MAKE THEM SEE HOW THINGS ARE GOING TO AFFECT THEM PERSONALLY AND ENCOURAGE THEM TO GO MORE IN DEPTH. JUST A SUGGESTION FOR NIMRODS-THANKS FOR ALL YOUR HARD WORK!! DON

  • William

    The European “condition” will be the American condition shortly. What this means is that there will be a steady and continuous erosion of the standard of living for the average American citizen. So, if you are already living in your Vehicle in CA or Nevada, move over for some company. This all did not have to be this way. The complete fault lies with the US Congress. Be sure to reelect the IDIOT who represents you in the US House and US Senate. There is NO recovery. Real GDP growth properly adjusted for REAL inflation will drop into recession/depression. Got gold or silver?

  • JAH666

    Here’s another voice that (like Michael) realizes that can has about reached the end of the road. The primary players in this game of ‘Kick The Can’ have kept it going this long so that they can drain as much capital from the system as possible, converting it into safe alternatives to protect themselves when the crash can no longer be avoided.

    http://www.oftwominds.com/blogjuly12/EU-death-spiral6-12.html

  • Washington

    Jan 31, 2012 George Soros support Mitt Romney, investor/communist and Obamas supporter want Mitt Romney. It’s not a good day for a republican to get support from communists. On Fed 2 Donald Trump announced his support for Mitt Romney. It can’t be a good day for a republican when Obama supporters see Romney as a good option.

    http://www.youtube.com/watch?v=f6aLQU_nYSM

  • http://www.desertbill.com William Lane

    Simple answer. We borrow all that we can, then announce that we are not going to pay it back. Lenders including China will be left holding the bag. What will they do, invade us to get their money back? Europe could also try this method. It seems simple, but I wonder what is the downside other than our reputation?

    • Race

      William…i agree…the loans banks lent/lend was/is funny money, fake money, counterfeit money. It was a scam. When I received my loans, did the banks/slave masters deposit physical money into my account? No….Why should taxpayers/public/little guy bailout institutions with their “real/physical” money? The solution is simple…discharge the debt, change the system from debt/fiat based economy which had only one intention….enslave everyone who borrows, and return to simple living. Otherwise, when it collapses, hell will break lose, and those responsible have to come out sometime. It won’t be pretty for powers to be.

    • http://TheEconomicVoice Gregge Johnson

      William ,,,the Chineese “Own” bought most the GRAIN futures in Nebraska. They come in with our military to guard them and take all the Grain. What part of no Bread dont you understand,,,,, (CIC) chineese Investment corp is the largest buyer Real Estate in US. When they put up NO TREESPASSING SIGNS and call in our military to protect Their land and kick us out off our houses that they own>>what part of No shelter dont you understand,,,, Read Michials artical about Toledo OHIO, Then LOOK under Forien Nationals VISAS allowing them to take our JOBS>>>>>>>> What part of no work dont you understand…. They are and will take over America without firing a shot Learn to speach Chineese. And PRAY to the LORD ALMIGHTY for MERCY and GACE on our people.

  • Traffix

    Michael,

    Personally I do not find your articles to be to lengthy. If I read you correctly, I think you are trying to go past your regular readership to advise new and current readers of a coming demise. Intelligent people will only change their views on facts and while repetitive, your message is on point. Keep it up.

  • DB200

    Germany’s credit rating has been downgraded from AA- to A+ by Egan-Jones:

    http://247wallst.com/2012/06/26/egan-jones-gives-sovereign-rating-downgrade-for-germany/

    In january Egan-Jones downgraded Germany from AA to AA-.

    A macroeconomist said today the following on radio:
    “The mainstream rating agencies are bogus but this agency has some intellectual integrity.”

    He also said:
    “The US economy is like house that is well painted but its foundations are rotting away.”

  • Evie

    I think health care and entitlements are the whipping boys. The way to decrease entitlement spending is to create well paying jobs, not low wage jobs. Life is too short.
    If entitlements are the problem why is it banks need billions agsin and again to shore themselves up.
    There actually is a soluton. Let the banks all over the world go bankrupt and write off debt instead of selling it to others.
    Put the peoples entitlement money and their own money in accts the elite cannot get their hands on.
    Much suffering as yachts, private jets and estates go to sherif sales. But the money never existed to begin with.
    Preaching to the populace about entitlement spending does not work when billions go to banks for gambling debts.

  • Harley

    I too give up. I just don’t have it in me to care anymore. I’m not filing taxes anymore as I would rather be in jail than continue working myself to death to support a system that hates me. Let the revolution begin. Or not. Whatever.

  • thiscreepingmalaise

    I live in a good neighborhood in a side by side duplex. My wife and I rent. My landlord and his wife live in the other unit and do not work. He is on social security disability and she is trying to get on it. They both are on medicaid and foodstamps. Our rent money pays more than half the rent. He works part time for cash for a neighbor. My wife and I both work for about 10 bucks and hour and because we make too much cannot get on food stamps or medicaid and do NOT want to.
    So basically we pay them rent and our tax dollars pay to let them stay home everyday and own a house that we pay for. No wonder our nation is so screwed up!

    • GaryToo

      actually its win win so dont complain. They get to survive, you get somewhere to live. If you dont like landlords who are only now making a loss as capital gain is a thing of the past. buy a house. find out from a bank what heartless profiteering really is.

  • thiscreepingmalaise

    sorry, more than half of their mortgage.

  • leebo

    you know, i find looking at nature to be rejuvenating. It is so peaceful outside. I keep telling myself, “no matter how bad things get the life still moves on.” We as humans are not alone in this world and as history shows, we always find a way to move forward. I find this all to be rather exciting than frightening. This will be a nice conversation starter for the rest of our lives :)

  • a lot more trouble…

    Kicking the can down the road might work for a short while if it was not for a dead end street.
    Soon very soon things are going to being looking a lot more grim for a lot more Americans very soon.

    More grisly layoffs and we just started the broiling month of July?

    Unity Health System announces layoffs
    ‎Rochester Democrat and Chronicle – 56 minutes ago
    Managers, supervisors and staff are affected; direct patient care is untouched.

    Mass layoffs up at hospitals, down in ambulatory care
    ‎American Medical News – 16 hours ago
    Mass layoffs up at hospitals, down in ambulatory care. Hospitals laid off more employees in May than in prior months…
    Hospital Mass Layoffs More Than Double From April to May‎ Becker’s Hospital Review

    North Las Vegas layoffs take effect, city jail closes
    ‎KTNV Las Vegas – 21 hours ago
    The budget crisis is hitting home for workers in North Las Vegas where layoffs went into effect Sunday. July 1st marks the start of the new fiscal year.

    Verizon laying off nearly 950 at Houston facility
    ‎The Republic – 1 hour ago
    HOUSTON – Verizon Wireless has notified Texas employment officials that it plans to close a call center in Houston and cut nearly 950 jobs.

    JC Penney closure to leave 100+ jobless
    ‎WISH – 2 hours ago
    8 with 121 official layoffs. The company expects 30 additional layoffs on Sept. 15, 10 layoffs on Sept. 22, and 15 layoffs on Sept. 29, according to a news release …

    Hawker Beechcraft lays off another 125
    ‎AOPA Pilot – 5 hours ago
    In the third layoff since April, Hawker Beechcraft laid off another 125 workers at its Wichita, Kan., facility last week, bringing the number of employees to 4075, …

    Avid to cut workforce by 360, sell consumer biz
    ‎Mass High Tech – 6 hours ago
    … 20 percent, or 360 employees, through layoffs as well as the sale of its consumer audio and video businesses, in a $91 million deal to two other businesses.

    The mass layoffs in larger companies we have seen recently, are now taking place in smaller business as well. At least what is left of them.
    There is so many more companies laying off right now that the list would be way too long and too much to read.

    This is stark reminder that more difficulty awaiting the American people and the can is being kicked down a dead end street.

  • Cinderella Man

    That can’s gotta be toast by now!!!

  • Cinderella Man

    Hey I wonder what happened to Gutter Economist? I hope he didnt get black-bagged! Have you seen him anyone?

  • Michael , coleman

    hi , from 1 michael to another , I live in Belfast in Ireland , but still read your stuff , you seem to know what is really happening and coming our way , everyone likes to bury their heads in the sand , websites and leaders , you seem very on the marks .
    Michael

    • Michael

      Michael from Ireland:

      It is a pleasure to hear from you. I have always wanted to visit Ireland, and perhaps someday I will get the opportunity.

      And I am honored to have you stop by my little corner of the Internet. :)

      Michael

    • El Pollo de Oro

      Michael Coleman: Michael T. Snyder doesn’t sugarcoat things. These are perilous times we’re living in, and Michael doesn’t hesitate to say so.

      By the way, I live in Philly and visited Belfast several years ago. I stayed in a B&B on Cavehill Road near Antrim Road.

  • Washington

    Yale’s Shiller to Moneynews: Home Prices Could Plunge Even Lower
    Friday, 29 Jun 2012

    http://www.moneynews.com/Headline/Shiller-Home-Prices-housing/2012/06/29/id/444010?s=al&promo_code=F5CE-1

  • Illuminated soul

    How many times and years how you Michael been writing about them kicking the can further down the road? Many (including my father) stored food for nothing in the 70’ies. Moneyprinting and an almost magical economic manipulation will keep away the economic collapse in EU, Asia and the USA. Israel and Iran will not begin fighting anytime soon and the “war” in Syria is slowly fading away! The earthquake rate is quite normal and there are no catastrophic “climate change” either. If you are longing for the end to come, to bad!, this ***** will continoue on many, many years into the future!

  • Washington

    Reality Check: If Healthcare Law Is A Tax Is It Now Invalid?

    http://www.youtube.com/watch?v=iyLU9-VqVxY&feature=plcp

  • Big Kahoona

    SEPTEMBER…SEPTEMBER…SEPTEMBER!!

    This month has had many events within it over the years, whether it was financial,natural disasters or 9/11 for that matter and there is no doubt in my mind that this coming September will be the moment…the time…the beginning of suffering for all.

    Do forget…not only is the EU a problem but so will Iran as Israel braces for the inevitable.

    • Big Kahoona

      “Don’t forget”!

  • mondobeyondo

    For some reason, the image of Lucy pulling the football away at the very moment Charlie Brown is ready to kick it, comes to mind. We can’t keep kicking the can down the road, and pushing off our financial obligations and responsibilities to the next administration, or the next parliament, or the next generation…

  • patriot alice

    Price of gas? Economic resolutions in Europe? Fiscal cliff? Calm before the storm? Yes, yes and yes, The Presidential election is calling in a lot of favors, from Saudi, Europe, to the Middle East. The sh$t will hit the fan after the election, remember even Pres. Obama told Putin “After the election”..How many things are waiting for the election to be over….

  • Washington

    Obama family cancels summer vacation to Martha’s Vineyard Published: 11:26 AM 07/03/2012

    http://dailycaller.com/2012/07/03/obama-family-cancels-summer-vacation-to-marthas-vineyard/#ixzz1zap1KJo1

  • Optimistic Pessimist
  • CJ

    You need to do an article in conjunction with the USD loosing its reserve status and the state of our economy. More people need to hear that.

    Forgive me if I’ve missed it.

    On topic, Krasting goes on to say he’s hedging for inflation. It is the only out and I agree with him on that. The problem is, the fed and every other central bank won’t allow a one sided debasement of currency.

    Short of universal debt forgiveness, we’re on a race to debase (inflate).

  • DB200

    Today I heard a chief economist from a securities firm – who is well connected and is frequently interviewed by the media – on newsradio talking about Monti and Merkel.

    Chief economist: “Well, the whole idea of the creation of the eurozone is that we will all become Germans.”

    Radio reporter, very surprised with disbelieve in his voice: “What are you saying?”.

    Chief economist: “Er, yeah, I mean that in a monetary and economic sense, of course.”

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