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Mega Fail: 17 Signs That The European Financial System Is Heading For An Implosion Of Historic Proportions

What happens when you attempt a cold shutdown of one of the biggest debt spirals that the world has ever seen?  Well, we are about to find out.  The politicians in Europe have decided that they are going to “take their medicine” and put strict limits on budget deficits.  They have also decided that the European Central Bank is not going to engage in reckless money printing to “paper over” the debts of troubled nations.  This may all sound wonderful to many of you, but the reality is that there is always a tremendous amount of pain whenever a massive debt spiral is interrupted.  Just look at what happened to Greece.  Greece was forced to raise taxes and implement brutal austerity measures.  That caused the economy to slow down and tax revenues to decline and so government debt figures did not improve as much as anticipated.  So Greece was forced to implement even more brutal austerity measures.  Well, that caused the economy to slow down even more and tax revenues declined again.  In Greece this cycle has been repeated several times and now Greece is experiencing a full-blown economic depression.  100,000 businesses have closed and a third of the population is living in poverty.  But now Germany and France intend to impose the “Greek solution” on the rest of Europe.  This is going to create the conditions needed for a “perfect storm” to develop and it means that the European financial system is heading for an implosion of historic proportions.

The easiest way to deal with a debt spiral is to let it keep going and going.  That is what the United States has done.  Sure, “kicking the can down the road” makes the crisis much worse in the long run, but bringing the pain into the present is not a lot of fun either.

Europe has decided to do something that is unprecedented in the post-World War II era.  They have decided to put very strict limits on budget deficits and to impose tough sanctions on any nations that break the rules.  They have also decided that they are not going to allow the European Central Bank to fund the debts of troubled nations with reckless money printing.

Without a doubt, this is a German solution for a German-dominated Europe.  Germany does not want to pay for the debt mistakes of other EU nations, and so they are shoving bitter austerity down the throats of those that have gotten into too much debt.

But this solution is not going to be implemented without a massive amount of pain.

In fact, this solution is going to make a massive financial collapse much more likely.  The following are 17 signs that the European financial system is heading for an implosion of historic proportions….

#1 As noted above, when you reduce government spending you also slow down the economy.  We have already seen what brutal austerity has done to Greece – 100,000 businesses have shut down, a third of the population is living in poverty and there is rioting in the streets.  Now that brand of brutal austerity is going to be imposed in almost every single nation in Europe.

#2 As the economy slows down in Europe, unemployment will rise.  There are already 10 different European nations that have an “official” unemployment rate of over 10 percent and the next recession has not even officially started yet.

#3 Before it is all said and done, the EU nations that are drowning in debt will likely need trillions of euros in bailout money just to survive.  But at this point Germany and the other wealthy nations of northern Europe are sick and tired of bailouts and do not plan to hand over trillions of euros.

#4 The European Central Bank could theoretically print up trillions of euros and buy up massive amounts of European sovereign debt, but this would go against existing treaties and most of the major politicians in Europe are steadfastly against this right now.  But without such intervention it is hard to see how the ECB will be able to keep bond yields from absolutely skyrocketing for long.  In fact, without massive ECB intervention it is hard to see how the eurozone is going to be able to stay together at all.  Graeme Leach, the chief economist at the Institute of Directors, said the following recently….

“Unless the ECB begins to operate as a sovereign lender of last resort function, with massive purchases of eurozone public debt, the inexorable logic is that the eurozone will break up.”

#5 European leaders are hoping that the new treaty that was just agreed to will be ratified by the end of the summer.  In reality, it will probably take much longer than that.  German Chancellor Angela Merkel has made it clear that the solution to this debt crisis is going to take a long time to implement….

“It’s a process, and this process will take years.”

Unfortunately, Europe does not have years.  Europe is rapidly running out of time.  A massive financial crisis is steamrolling right at them and they need solutions right now.

#6 Sadly, the cold, hard reality of the matter is that none of the fundamental problems that Europe is facing were fixed by this recent “agreement” as Ambrose Evans-Pritchard recently noted in one of his columns….

There is no shared debt issuance, no fiscal transfers, no move to an EU Treasury, no banking licence for the ESM rescue fund, and no change in the mandate of the European Central Bank.

In short, there is no breakthrough of any kind that will convince Asian investors that this monetary union has viable governance or even a future.

Germany has kept the focus exclusively on fiscal deficits even though everybody must understand by now that this crisis was not caused by fiscal deficits (except in the case of Greece). Spain and Ireland were in surplus, and Italy had a primary surplus.

#7 Nobody wants to lend to European banks right now.  Everyone knows that there are dozens of European banks in danger of failing, and nobody wants to throw any more money into those black holes.  The U.S. Federal Reserve and the European Central Bank have been lending them money, but a lot of European banks are already starting to run out of “acceptable forms of collateral” for those loans as one Australian news source recently explained….

“If anyone thinks things are getting better, they simply don’t understand how severe the problems are,” a London executive at a global bank said. “A major bank could fail within weeks.”

Others said many continental banks, including French, Italian and Spanish lenders, were close to running out of the acceptable forms of collateral, such as US Treasury bonds, that could be used to finance short-term loans.

Some have been forced to lend out their gold reserves to maintain access to US dollar funding.

So will the U.S. Federal Reserve and the European Central Bank keep lending them money once they are out of acceptable collateral?

If not, we could start to see banks fail in rapid succession.

Charles Wyplosz, a professor of international economics at Geneva’s Graduate Institute, is absolutely certain that we are going to see some major European banks collapse….

“Banks will collapse, including possibly a number of French banks that are very exposed to Greece, Portugal, Italy and Spain.”

#8 Not only does nobody want to lend money to them, major banks all over Europe are also dramatically cutting back on lending to consumers and businesses as they attempt to meet new capital-adequacy requirements by next June.

According to renowned financial journalist Ambrose Evans-Pritchard, European banks need to reduce the amount of lending on their books by about 7 trillion dollars in order to get down to safe levels….

Europe’s banks face a $7 trillion lending contraction to bring their balance sheets in line with the US and Japan, threatening to trap the region in a credit crunch and chronic depression for a decade.

When nobody wants to lend to the banks, and when the banks severely cut back on lending to others, that is called a “credit crunch”.  In such an environment, it is incredibly difficult to avoid a major recession.

#9 European banks are absolutely overloaded with “toxic assets” that they are desperate to get rid of.  Just as we saw with U.S. banks back in 2008, major European banks are busy trying to unload mountains of worthless assets that have a book value of trillions of euros.  Unfortunately for the banks, virtually nobody wants to buy them.

#10 European bond yields are still incredibly high even though the European Central Bank has spent over 274 billion dollars buying up European government bonds.

Up until now, the European Central Bank has been taking money out of the system (by taking deposits or by selling assets for example) whenever it injects new money into the system by buying bonds.  That makes this different from the quantitative easing that the U.S. Federal Reserve has done.  But at some point the European Central Bank is going to run out of ways to take money out of the system, and when that happens either the Germans will have to allow the ECB to print money out of thin air to buy bonds with or we will finally see the market determine the true value of European government bonds.

#11 Bond yields are going to become even more important in 2012, because huge mountains of European sovereign debt are scheduled to be rolled over next year.  For example, Italy must roll over approximately 20 percent of its entire sovereign debt during 2012.

#12 Once the new treaty is ratified, eurozone governments will lose the power to respond to a major recession by dramatically increasing government spending.  So if the governments of Europe cannot spend more money in response to the coming financial crisis, and if the ECB cannot print more money in response to the coming financial crisis, then what is going to keep the coming recession from turning into a full-blown depression?

#13 Credit rating agencies are warning that more credit downgrades may be coming in Europe. For example, Moody’s recently stated the following….

“While our central scenario remains that the euro area will be preserved without further widespread defaults, shocks likely to materialise even under this ‘positive’ scenario carry negative credit and rating implications in the coming months. And the longer the incremental approach to policy persists, the greater the likelihood of more severe scenarios, including those involving multiple defaults by euro area countries and those additionally involving exits from the euro area.”

#14 S&P has put 15 members of the eurozone (including Germany) on review for a possible credit downgrade.

#15 The stock prices of many major European banks are in the process of collapsing.  If you doubt this, just check out the charts in this article.

#16 Bank runs have begun in some parts of Europe.  For example, a recent article posted on Yahoo News described what has been going on in Latvia….

Latvia’s largest bank scrambled Monday to head off a run among depositors who were gripped by rumours of the bank’s imminent ruin.

Weekend rumours that Swedbank was facing legal and liquidity problems in Estonia and Sweden sent thousands of Latvians to bank machines on Sunday, with some lines reaching as many as 50 people.

The Greek banking system is literally on the verge of collapse.  According to a recent Der Spiegel article, the run on Greek banks is rapidly accelerating….

He means that the outflow of funds from Greek bank accounts has been accelerating rapidly. At the start of 2010, savings and time deposits held by private households in Greece totalled €237.7 billion — by the end of 2011, they had fallen by €49 billion. Since then, the decline has been gaining momentum. Savings fell by a further €5.4 billion in September and by an estimated €8.5 billion in October — the biggest monthly outflow of funds since the start of the debt crisis in late 2009.

#17 There are already signs that European economic activisty (as well as global economic activity) is really starting to slow down.  Just consider the following statistics from a recent article by Stephen Lendman….

In November, French business confidence fell for the eighth consecutive month. In October, Japanese machinery orders dropped 6.9%, following an 8.2% plunge in September.

South Africa just reported a 5.6% drop in manufacturing activity. Britain recorded a 0.7% decline. China’s October exports fell 1.7% after dropping 3.8% in September.

Korea’s exports are down three consecutive months. Singapore’s were off in September and October. Indonesia’s plunged 8.5% in October after slipping 2% in September. India’s imploded 18.3% after being flat in September.

Are you starting to get the picture?

Europe is in a massive amount of trouble.

The equation is simple….

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

Unless something truly dramatic happens, the economy of Europe is a dead duck.

There is no way that Europe is going to be able to substantially reduce the flow of money coming from national governments and substantially reduce the flow of money coming from the banks and still be able to avoid a major recession.

Look, I want it to be very clear that I am in no way advocating government debt in this article.  It is just that under the debt-based monetary paradigm that we are all operating under, there is no way that you can dramatically reduce government spending without experiencing a whole lot of pain.

An economic “perfect storm” is developing in Europe.  All of the things that need to happen for a major recession to occur are falling into place.

So does anyone out there disagree with me?  Does anyone think that Europe is going to be just fine?

Please feel free to leave a comment with your thoughts below….

  • http://www.muccings.blogspot.com Gerald Mucci

    When I just look at the mainstream news, not just ABC, NBC, MSNBC, and FOX, but also Bloomberg and the WSJ each day, their short-sighted snippets of events of the day appear to give an upbeat picture of Euro Zone fiscal prospects. But when the data is assembled to show the trends, these short-term positive news snippets appear as specks of pixie dust in a universe of gremlins.

  • Gary2

    And as usual the more socialist Scandinavian countries are doing fine. If you want what they have you have to do what they do. When will people learn that conservatism is a cancer?

    • Kevin2

      Conservatism did not get them in trouble, extravagance did.

      Spending more then you bring in is not conservative.

    • Matt

      Um, you do know that Greece, Italy, Ireland and Portugal have had Socialist policies for decades right? All of Europe has, not just the Scandinavian countries… It almost must be nice relying on the U.S almost entirely for their defense and not having to spend their own money to do it.
      After Europe AND the US collapse under the weight of their free socialist handouts; no different than the USSR, then you can tell us about the cancer of conservativism.

  • Rumsfeld

    Basically correct in that if you have austerity you have falls in tax receipts etc. We may have reached the point of no return in some European countries but also in the USA. The whole Western world’s economic system of dependence on consumer spending and debt has almost reached its zenith point. I await war as Marc Faber has commented on.

  • Jimmy Joe

    Your site has a lot of great articles but what Europe is doing is the right thing. The people of Europe cant keep bailing everyone out. To devalue a currency is taking money out of the pockets of savers and giving it to the people who borrowed and cant repay. How well has inflating debts away worked out for the people of Argentina or Zimbabwe? This new agreement will come with current economic pain but if the euro stands strong it will be the #1 contender to replace the US dollar as the worlds reserve currency.

    • Jeremy

      Agree. There will be massive pain regardless, and that is coming here too. Better to get it over with now.

      You simply cannot spend more than you earn. It is that simple.

  • http://goldenladyfun.blogspot.com Pat

    As an American who lives in Europe I have seen with my own eyes the decline. Living here is something like out of the movie Mad Max. My wife just told me today that sea salt now cost 5 Euros per half kilo. That’s $8 U.S. per pound. Can you imagine 8 dollars for a pound of salt.

    The socialist system really sucks. Our kids in high school learn not only nothing but incorrect information. Hospitals are something like a garbage dump. Fuel is twice as expensive as the U.S.

    I could go on. The point is I know what you will be facing in America based on what we have in Europe.

    There is only one way to secure yourself financially. Buy gold and silver. We sell gold a little at a time so that anyone can afford to start a gold savings account.

    Now is a great time to buy because the prices are low. Today it is at 1666 per ounce. We sell 1 gram bars for 55.97 per gram. See my blog for more info: http://goldenladyfun.blogspot.com or email me at: goldenladyfun@gmail.com

    May God Bless you.

    • Paul

      So between Europe and the US it looks like no-one gets taught “correct” information at school.

    • Paul

      Yes, you can buy sea salt for £5 per pound. And just 30cm besides, in the same shelf, you get table salt for £0.5 per pound.

      And I don’t think England has a socialist system. Last time I looked the Lords still ruled the country. Those who own land have the most power. Sure, capitalists are here, but they have to rent the land from the landlord where they want to erect their factories.

      I grew up in socialism. My experience: everybody had a job, everybody had healthcare, there were no homeless people, education was free of charge, at 18 everybody either had finished highschool and was ready for university or had finished apprenticeship and was ready to join the workforce, and you got actually paid for having an apprenticeship, going to highschool or university. Men retired at 65, women at 60.

      Growth was quite slow, because you couldn’t spend more money than you earned. So all investment had to be financed from income.

      People didn’t like that, they have seen spendthrift working fine across the border in the West. So they changed the system.

  • Tapper P.

    Europe may be toast, but we will be far worst off. As Peter Schiff said, countries that are impoverished now will rise up to the median while we have to sink a long while to meet them in the middle.

    Our standard of living based on the Ponzi debt economy is coming to an end.

    Well at least the nauseating Jesus comments thinned out a little and made way for some real commentary on the failing economy.

    **Jesus is a many times repeated myth of a solar savior, he is risen, is the light of the world and all that nonsense.

    The economic hell we are going into, however, is real.

    **Deluded folks: Please watch the original Zeitgeist movie and come to terms with the fact that you are actually worshiping the SUN of God.

    The New Testament is nothing more than the sun/son’s travels through the houses of the Zodiac starting with John the Baptist/Aquarius. That is why there are 16 ‘saviors’ with the same story dating back to the Early Egyptians. They had Horus, you have Jesus. They had Set, you have Satan.

    No doubt about it, the sun savior nonsense will never go away, but more is expected from rational thinkers.

    This is coming from a 22-yr christian that somehow woke up to the truth. You should try it, it frees up your SUNdays for golf, hiking – other things!!

    • Michael

      Tapper:

      The whole “16 saviors” has been so dramatically debunked that I am amazed that anyone still brings that stuff up. It is based on scholarship that is so laughable that even atheist sites tell people not to trust it….

      “The scholarship of Kersey Graves has been questioned by numerous theists and nontheists alike; the inclusion of his The World’s Sixteen Crucified Saviors in the Secular Web’s Historical Library does not constitute endorsement by Internet Infidels, Inc. This document was included for historical purposes; readers should be extremely cautious in trusting anything in this book.”

      I have been studying this stuff for longer than you have been alive, and I would encourage you to get educated.

      The whole “sun god” tradition goes all the way back to ancient Babylon and an individual known as Nimrod (and by a lot of other names and titles as well).

      There is a very real connection between Nimrod and the one known as Horus. That is something that you should look into.

      But Jesus has nothing to do with those pagan gods. Just because Constantine and the Romans attempted to merge pagan traditions with Christianity in the 4th century does not mean that the original faith is corrupt.

      Not at all.

      Jesus was a real historical person and His story was passed down to us by eyewitnesses….

      2 Peter 1:16 – For we have not followed cunningly devised fables, when we made known unto you the power and coming of our Lord Jesus Christ, but were eyewitnesses of his majesty.

      1 John 1:1 – That which was from the beginning, which we have heard, which we have seen with our eyes, which we have looked at and our hands have touched—this we proclaim concerning the Word of life.

      There is no other religion that has solid evidence behind it like Christianity does.

      For an introduction to some of the basic evidence, I would recommend the following books….

      *More Than A Carpenter by Josh McDowell

      *Christianity: The Faith that Makes Sense by Dennis McCallum

      But those two books are just the tip of the iceberg.

      There is a gigantic mountain of evidence for the Christian faith.

      If you don’t think so, then you have not done the research.

      Michael

      • ironmaan

        Give the dumbass a break, he said he was only 22.

      • Paul

        The extra-biblical evidence for the actual existence of Jesus is weak at best. Either it isn’t there or it was destroyed because the young Church couldn’t afford the memory of a living Jesus interfering with its new-found scam. The Bible is useless as proof of anything as it has been translated, altered, modernized, amended and generally plundered by so many mortals over the years with agendas of their own. It could be said that a “second coming” would be a “worst-case-scenario” for the christian churches.

        • Michael

          Paul:

          Actually we have more and better ancient manuscripts of the Bible than we do for any other piece of ancient literature.

          I would encourage you to look into the evidence more. I am afraid that you have been misinformed.

          Michael

      • JasonD

        Jesus = Mithra

        • Michael

          No, just because the Romans decided to put the birthday of Jesus on the exact same day as the birthday of Mithra (Dec 25) in the 4th century does not mean that they are the same.

          The truth is that Jesus was actually born during the fall during the Feast of Tabernacles.

          Michael

      • Kent Harris

        Honestly, Michael tell me where the Bible is wrong. Tell me how the Bible forecasted Christ coming as a baby to a virgin. Mind you, we have manuscripts of Isiah which precedes the birth of Christ which have been carbon dated 150 B.C. One can debated the legitmacy of the Bible, but no other book has the history and archelogical evidence the Bible has. One more question why would people die for what they know to be a lie.

        • Michael

          Kent:

          Perhaps you were replying to someone else. I was defending the Bible. :)

          Michael

      • Me No Likey

        ok, cool, yea. whatever. believe in what you want. i personally believe in peanut butter and jelly. but do i get on the peanut butter and jelly sandwich train when talking about economics, government, etc.? no. bottom line: if people wanna ride the god bullet train into the sunset, go for it, have at it, more power to ya. just don’t expect/demand/preach at the rest of us to be waiting at the station with you. some of us just like making our sandwiches, get it?

        • Me No Likey

          and don’t get me wrong. i freaking love this blog. in fact, it and others like have really changed how i live my life on a lot of levels.

          and i do believe in god. really. Only mine is The Black Lady. She’s got gorgeous golden brown skin, incredible dreads, an amazing figure, sits in a crimson bikini in a director’s chair at Santa Monica beach, California, orders apple martinis, and calls people up on her cell and says, “I thought I told ya, it ain’t about you.” Then she pops the cell phone shut. End of story. (thankfully, she doesn’t call me as much as she used to).

          this and my previous comment will probably get “moderated” out, but at least i tried…

    • r.bitting

      Sounds like you went back to sleep again. So tell us, because we just want to know what the truth is so that we may believe in it and it’s obvious that you have it, what do you believe, and what do you base that belief on? Your remark about getting your Sundays back is actually more telling of why you abandoned Christianity. Whoever puts his hand to the plow, and even looks back, is not fit for service in the Kingdom of God. Maybe it’s not theology that led you to this, maybe it’s closer to the truth that you can’t give up your life for service to God.

  • kwark

    Sounds like you’re describing the US situation as well. We should force the banks and financial institutions to reveal the toxic “investments” in their vaults, declare most of them insolvent, and write-off the debt that will never be repaid.

  • Nexus789

    First point is that this is not exclusively a European ‘problem’ as the problem is systemic from a global perspective. Next point is that ALL the Banks are INTERLINKED (systemic)….US banks own trillions upon trillions of dollars of ‘toxic’ debt. Next point is that if Europe collapses the US will go as well as well along with Asia and just as fast as all the scummy banks lend to each other (refer to previous point). Next point is that if the European economy collapses and trade volumes collapse then the US will be impacted as orders dry up, factories (the ones that are left) close and people are laid off. The Great Depression will seem like a riotous party compared to this. Lots more points but I have a glass of red wine….

  • ScoutMotto

    The sad thing about all of this is it will end in oppression. Someone once wrote that in democracies, when the people discover they can vote themselves a largess from the public purse, they will always vote for the candidate who promises the most handouts. Then the nation ends up collapsing over loose fiscal policy, and rolls into dictatorship. The US is heading the same direction. Once the US becomes a dictatorship, we won’t have to worry about illegal immigration anymore, since no one will want to go to the US.

  • RSteiner

    This “German Dominated Europe” will not work. In fact the overwhelming majority of Germans are against it – only the EU-politburo is for more centralization, etc.

    This thing is highly unstable and will not exist for more than maybe a couple of years, if that.

    http://in-other-news.com/2011/Greek-bailout-will-cause-much-bigger-problems-in-the-future

    The Germans themselves don’t want to “dominate” Europe – what kind of “Domination” is that supposed to be? To pay and be hated for it?

    90% don’t see the rescue packages as a solution:

    http://www.finanznachrichten.de/nachrichten-2011-09/21259615-umfrage-deutsche-bewerten-euro-rettung-skeptisch-003.htm

    • Paul

      I don’t think Germany is interested in dominating Europe. I just think they are sick of carrying the can for all the other, weaker, less disciplined nations. Most of these countries were economic basket-cases long before the Euro, and fear of them dragging the currency down were expressed by the Germans right from the start.

    • Paul

      It doesn’t matter whether most of the Germans are against it. Most of them have no power anyway. The power comes from a handfull of econonomic heavyweights. And it was always them who said which way to go. Even Hitler was just their puppet.

      For example there is Family Quandt, owner of BMW. They profited from slave labor during Hitler’s reign, but were not punished. Thyssen, Krupp and Flick didn’t lose too much either.

      The German imperialists are not sitting in the parlament. Just recently they sold lots of weapons to Greece. And who paid for them? The German taxpayer!

      If Germans don’t like their government, they don’t change it, they emigrate. America, North and South, Canada, Australia, New Zealand – everywhere you’ll find German ancestry.

  • James Nelson

    You are right, it will be a collapse with a great deal of pain and potential political upheavals. The future here is terrifying, but what is the alternative? Whatever cannot continue will not continue. This pain is coming and we cannot stop it, only delay it and delaying it means it will be even worse when it finally happens.

    • Paul

      One alternative could be to pay people more wages and higher salaries so they can afford their basic life and health and don’t need loans they cannot repay.

      Another alternative could be to build smaller houses and make them from stone and on stilts, so they are not blown away by wind or flooded every year. This way people can protect their property, keep what they own and accumulate wealth.

  • obamaville 2008

    ahhh that strange thing called history is now repeating itself all over again…it begins, as always, with the continent going through social or economic erruptions , both germany and france as a result rise out of the ashes for the umpteemth time… europe then succumbs to their evil mechanisations, and england as always ends up standing alone against the whole sordid mess… and of course there are the appeasers too (peace in our time glegg and co)who are busy doing what comes best for them, selling europes freedoms and rights for a cheap cause, only now that cause is merkel’s fourth reich, and sarkozy’s millionth french empire..well may we say long live history, because nothing will help europe… anyone for some greek yogurt..

  • Chris

    What so your solution is that the ECB should just print money out of thin air until the Euro is worthless, savers and pensioners are destroyed to bail out speculators and the whole thing results in a hyperinflationary depression? Not much of a solution and you even admit that kicking the can down the road will make the pain worse in the long run! If you are not going to take the pain now then when?!

    • Michael

      Chris:

      I am not advocating that “kicking the can down the road” is better. What I am saying is that whatever they choose to do is going to be very painful.

      My solution for them would involve ending central banking and debt-based currency in Europe altogether. But we all know that is not going to happen.

      Michael

  • Davey Jones

    I believe the ECB will be allowed to print money out of thin air and buy the bonds. This is just a pause and not an authentic drive to allow the markets to determine their true value and make a very painful correction. I believe in 2012 we will see money printing that would scare a poltergeist(especially if said poltergeist had their wealth in dollar denominated assets). The suicide bankers are in control, and they are going to pump this debt bubble to the hilt. When they plan a global crash-they don’t hold back.

  • r.bitting

    On Christ the solid rock I stand, all other ground is sinking sand.

    • Ingrid Keskitalo

      The Bible tells us what is to come in the “End-Times”. The Old Testement book of Daniel, ch.2:40-45, ch.7, ch.9:26-27, and Revelation 17:12-18 are a few of the many Scriptures that describe the final Empire of the Antichrist. That Empire is a “divided”kingdom” that come out of the Old Roman Empire boundaries. 10 kings (leaders) will rise up and give their authority to the Antichrist, they together with him will rule the world for a short time. This EU euro crisis is the spring board to that final End-Time scenerio. For more information on this topic please read “Things to Come” by Dwight Pentecost. Also Dr. Ed Hindson has a excellent site on these issues, please view “World Prophetic Ministry. The Rapture of the Church happens first, so time is short. I would not want you to be “Left-Behind”.

  • Tom Damon

    Michael, I have to disagree strenuously with some of the statements in this essay.

    Yes, I think we all agree a massive amount of pain (financial) is coming, but in this case the Europeans are doing it better than we Americans are. Take the pain, get it over with. Look at the Depression of 1921 for your answers. This continual shovelling of money at broke banks needs to stop…right now.

    Take a trillion Euros, divide it into 10 new banks, shut down all the insolvent banks by paying off the depositors and stiffing the equity and bondholders, and voila, you have 10 non-insolvent banks capable of performing banking functions.

    Why is “living within your means” considered to be horrendous austerity when it comes to governments, but A-OK when performed by households ? Really, governments need to stop stealing, ie taking taxes, from some and giving to others. Yes, you hurt the poor, but you also stop the crony government largesse being distributed to its political backers. You also get to stop the overseas “military adventures” we’re engaging with more and more frequency now.

    All in all, it seems to me that after a lot of pain, “living within your means” ie austerity, is a very good thing. Return sovereignty to states by not having the state go into debt.

    Get over it. Life is hard, and it’s harder when you are over your head in debt…whether a state or an individual. Get debt-free and enjoy the freedom.

    • Jeremy

      Great post, and you make an interesting point about our affairs overseas. Don’t know what I think about that yet, but great post nonetheless.

      How difficult is it to understand that you cannot spend more than you earn? This is not directed at Michael, but those on the board that support big government and massive social expenditure type policies.

      • Paul

        Social expenditure is dwarfed by defense spending.

        It wasn’t Medicaid that killed the Romans, it was their endless wars.

  • William

    The Bolshevik Communist Khazars in the City of London who have engineered this problem in Europe, just as they have created wars and collapses for the past 200 years, are LAUGHING at YOU.

    • jagga

      well said i couldnt agree more

  • Matt T

    Europe is toast. Got jelly?

    • mondobeyondo

      And the U.S. is bacon. So is Canada for that matter. But at least they’ll be Canadian bacon.

      (ugh.. grrrr. Now you know why I am not a professional comedian.)

  • zeitgeist

    I agree the euro will collapse and i predict the dollar to quickly collapse shortly thereafter.

  • wilson

    If Europe does this, good for them. At least they are not kicking the can down the road like the clowns in DC are doing. If they take their medicine now it’ll be better than if they do it years from now when the debt is even worse. It is time governments learned to quit spending and to live within their means. It is time for the government to STOP “spreading the wealth around”. You are attempting to sensationalize a story that doesn’t need to be. If anything the Europeans are to be congratulated for making this attempt to rectify their financial mistakes. Kudos to them if they can pull it off.

  • Paul76

    The only thing I’d disagree with is your assessment that the new “plan” to save the EU might be implemented. It’s DOA. By next week they’ll be scrambling to conceive yet another new treaty or “plan”.

    Like you, I expect a European bank failure sometime in the near future, collapsing the Euro with it. Unfortunately, the ripple effect will also cause one or more of the large banks over here to tank, dragging the U.S. down with Europe.

    Of course, the Fed and Treasury WILL attempt to “supply liquidity” to keep the Dollar alive. Although they may attempt to short-circuit the collapse by supplying “unlimited dollar liquidity” to keep the European banks from collapsing at all through some back door form of QE to the IMF.

    Alternately, the good old “bank holiday” might be revived to stop panic from spreading. Might be a wise idea to keep some cash on hand at home as an emergency fund.

    Just as happened a couple of Mondays ago when it was announced that lines of credit were being extended to European banks by the U.S., Canada, et. al.. Over that weekend, somebody was about to collapse (most likely Dexia), but they managed to dodge that bullet. Will they be so lucky the NEXT time????

  • McKinley Morganfield

    ” Europe is rapidly running out of time. A massive financial crisis is steamrolling right at them and they need solutions right now.”

    EU zone passed the point of no return years ago when the PIIGS were encouraged to fatten up on debt. The same goes for America, we are rapidly approaching the point of no return; and there is little will on the part of the public and the political class to take the necessary measures to turn the economy around.

    • Bone Idle

      The U.S. point of no return has already been passed. The only thing that various governments and central banks are doing is trying to stave off a complete disintegration of the financial system and a descent onto anarchy.

      It would only take 24 hours for the complete destruction of the worlds financial system – less in fact. It only takes a single event to trigger this. The world came within hours of this in 2008.

  • http://hotmail XSANDIEGOCA

    We live in interesting times. When the credit bubble deflates it will be Deja Vu 1932 all over again. I am increasingly of the opinion that governments on both sides of the pond are unable to deal with this. Unfortunately, I foresee what we may euphamistically call “military intervention”. Here in America, we have 45MM in the food stamp “bread line”. 75MM Boomers looking for Social Security and Medicare. There is not enough money in the universe to cover those markers. The Chinese will stop the music at some point. There will not be enough chairs to go around. My conclusion is that, yes, there will be a collapse. Whether we shall rise prudently from the ashes is another question.

    • McKinley Morganfield

      I agree that we are about to experience in 2012 a dopplelganger of 1932. After the crash of 1929 things were bad on Wall Street and Main Street soon felt the effects; but at that time the economy was in recession, not in a depression. Then, in 1931 the Austria-Kedit-Anstalt Bank failed and this rapidly caused an epidemic of banks failures in Europe & the USA which culminated in the banking crisis of 1932.

      “Whether we shall rise prudently from the ashes is another question.”

      Good question.

    • Bone Idle

      What’s going on in the worldwide financial world currently mimics what happened in the prelude to the thirties depression.

      The real trigger for the thirties depression was bank runs.

    • mondobeyondo

      Make No Mistake… (trademark and copyright Barack Obama) – 2012 is going to be a repeat of 1932 in many ways.

      You may ask, “Where are the bread lines and soup kitchens?” Well, we have EBT cards and food stamps now. You see, even poverty has to change with the times. But that doesn’t make it any less painful.

      When you are in pain – physical, emotional, economic or otherwise – you are going to beg for relief. People next year will vote for anyone who offers relief from their misery. Anyone. Could be Obama, or Gingrich, Bachmann, Peter Pan, Mickey Mouse, another Roosevelt, or another Lincoln, or another Hitler. They won’t care. They just want the pain to stop.

      Obama may try that “hope and change” platform again in 2012. “And THIS time – I REALLY mean it!!” Guess what? People will vote for him again, just because he said that. Too scary… sounds like Herbert Hoover in 1929. “Two chickens in every pot…” And in 1932, you’d have been lucky to catch a pigeon to cook for dinner.

      The times, they are a-changing. But you know… the more things change, the more they stay the same.

      • Michael

        Yes, I am afraid that 2012 is going to be a very “interesting” year.

        Michael

  • NUF

    Your many dire postings have warned of the collapsing USA and now this: the European financial system is heading for an implosion of historic proportions.

    As mind-blowingly bad as this would be, all you can manage in your conclusion is to call for a “major recession” – you can’t even manage to call it a DEPRESSION – never mind that its likely to be probably the GREATEST EVER DEPRESSION!!!

    Something does not compute here: either you dont believe your own arguments, you are too squeamish to follow them to their logical conclusion, or,- I’m afraid – you have no idea what youre talking about!

  • http://www.thehomeforsurvival.com Survivor Mike

    I think point #5 is the real cause for concern. The length of time it will take to complete will be a lot longer than anticipated.

    Also #16 (bank runs) is a big one. The internet and social media is getting information out there to the masses faster than ever. This will ensure that people that would normally not act quickly will do so. The bank runs will lead to social unrest and then look out.

  • Harold Crews
  • http://kitakitz.com john

    Economics 2011

    Mary is the proprietor of a bar in Dublin . She realises that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronise her bar. To solve this problem, she comes up with new marketing plan that allows her customers to drink now, but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

    Word gets around about Mary’s “drink now, pay later” marketing strategy and, as a result, increasing numbers of customers flood into Mary’s bar. Soon she has the largest sales volume for any bar in Dublin ..

    By providing her customers’ freedom from immediate payment demands, Mary gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages.

    Consequently, Mary’s gross sales volume increases massively. A young and dynamic vice-president at the local bank recognises that these customer debts constitute valuable future assets and increases Mary’s borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.At the bank’s corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into Drinkbonds and Alkibonds.

    These securities are then bundled and traded on international security markets. Naïve investors don’t really understand that the securities being sold to them as ‘AAA’ secured bonds are really the debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation’s leading brokerage houses.

    One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Mary’s bar. He so informs Mary. Mary then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts. Since Mary cannot fulfil her loan obligations she is forced into bankruptcy. The bar closes and the eleven employees lose their jobs.

    Overnight, Drinkbonds and Alkibonds drop in price by 90%. The collapsed bond asset value destroys the bank’s liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community. The suppliers of Mary’s bar had granted her generous payment extensions and had invested their firms’ pension funds in the various Bond securities. They find they are now faced with having to write-off her bad debt and with losing over 90% of the presumed value of the bonds.

    Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

    Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion euro no-strings-attached cash infusion from their cronies in government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Mary’s bar.

    Now, do you understand economics in 2011?”

    • Joe Mama

      John, this is fantastic!!

      Well done.

    • Marco

      This is great John. I’d like to share this with others!

    • Vidhya

      john..superb explanationn in layman’s terms..i like it..true to the core..

    • Highspeed

      I saw the video on youtube.

    • Pete
  • yhung

    Europe first and after that USA….. it’s all planned…..isn’t it obvious?

    • Paul

      Yes, the almost complete lack of investigations and charges against those responsible for this is quite telling.

  • http://food stingray

    agree with you

  • http://portlavacalots.com CTD

    Hello Mike,
    I am your regular reader on your blog daily and would like to understand more. As we all know that the EU financially in trouble and US is not far from them due to global effect and banking businesses, why the down jones go up and up like there is nothing happened, It is very confusing of the reality today. Thank you.

    • Michael

      CTD:

      The stock market will be headed down. Right now a lot of investors are still delusional, but that won’t last indefinitely.

      About six months from now things will look much different.

      Michael

      • Kelly

        I happen to think the market is being manipulated by big hedge funds and Soros types…

        • 007

          Bernanke has absolutely no problem manipulating the bond markets through QE, or the interest rates, or the currency value. He is admitting that he is trying to influence the real estate market. He has also expressed pleasure in the stock market rise. He says it spurs the economy because it makes them “feel” richer. He also has not denied any market manipulation.

          Therefore, it is very reasonable to conclude that the is trying to keep a floor under the stock market. It looks to me that 12,000 on the DOW is where he has drawn the line in the sand. I bet he gets a call every day from Obama asking him to goose the stock market.

  • DeathSpiral

    Are the large banks now preparing for an implosion as they continue to transfer their risky credit default swaps and derivatives into Shadow Banks?

    http://futures.tradingcharts.com/news/futures/DJ_BIS__Derivatives_Dealers_Have_Transferred_Credit_Risk_To_Shadow_Banks_Since_2010_169954367.html

  • Patriot Alice

    This article reminds me someone trying to scare another about the pains of dieting, “Don’t do it, you’ll suffer tremendous long term pain for years”, so keep eating it’s more pleasurable and fun….

  • Zedge Hero

    And after the implosion, will Fascism rise once again? I’m afriad it already has risen as reported at the World Revoltion News last Friday here-

    http://www.youtube.com/watch?v=Vr7ePW44QuU

    And you can see the rise of the Right Wing in Europe here on a nice visual map from the Guardian

    http://www.guardian.co.uk/world/interactive/2011/jul/28/europe-politics-interactive-map-left-right

    Then on Sunday Mr. Paul Krugman(NY times, Harvard econ. grad) must have seen my episode-(yeah right)and might be reading the Economic Collpase blog, because he wrote an interesting article titled Depression and Democracy. Basically saying that yes it is a depression we are in, and Nationalism is on the rise in Europe. All of this could pose a big threat when the inevitable implosion occurs. Good article and nice to see someone besides Michael report the truth, even if it’s too little,too late.

    http://www.nytimes.com/2011/12/12/opinion/krugman-depression-and-democracy.html?_r=1

  • http://www.1913intel.com Matt

    We have been suppressing recessions since 1945, but suddenly it’s not working.

    Why?

    The problem is not the recession. The problem is all the decision makers that got us into this mess. When you suppress recessions, then the bad decision makers get to continue making bad decisions. Over a long period of time the bad decision makers and bad decisions build up to the point of collapse.

    What is the solution?

    We must let the collapse happen in order to burn out the bad decision makers.

  • knightowl77

    No pain, No gain….
    Had we let the whole thing collapse in 2008, we would be coming out of the mess now…Instead we kicked the can down the road and made all the debts and problems BIGGER. So now when it does collapse it will be worse than if we had let it collapse back in 08….

    Let it collapse now, only then can we start over.

    It will be bad for a couple of years and then maybe we can climb out of the hole that we are in..

    • JustanOguy

      Well stated… kicking the can down the road printing up money / more debt is just going to worsen the inevitable pain.

  • Rancher

    Agree to a point. What point that is I do not even know. I simply believe no one ever factors in the unexpected. That is no one but preppers.

    No one factors in or builds in a good buffer for the next volcanoes, earthquakes, title waves, burst dams and all the rest. Trying to balance an over loaded tray of dirty dishes over your head and doing it in the dark is what comes to mind. You have no idea what is in front of you so you trip and fall. Turning on the lights first is sort of like planning for the unexpected ahead of time.

    Another way of saying it could be this article is strictly contained within a boundary of controlled information. Now that is OK if you realize and accept that. However the news is almost daily revealing Mother Nature throwing her weight around. Then add in the card player in this game called terrorists and other nations wanting to see us westerns to fail. Then for spice just remember the new guy in the card game who just bought in with a big stack of chips… Mr. Murphy’s Law.

    The article is not wrong as I see it. Rather it is limited. There is just NOT enough BAD news in it. Just you wait and see…. Enough bad things happen all the time without us shooting ourselves in the foot. At this point in time I see both our feet having been shot up and the gun locked on full auto as it falls to the ground…pointed back at us.

    Have a real nice day….

  • Snoopy-the-economist

    What do you propose instead of austerity – more money printing? Greece is in horrible shape with or without austerity – they were allowed to spend WAY beyond their means (similar to Amerika).

    The best way to stop over-spending to cut back on spending – something USA should try.

    • Michael

      I am just pointing out that all of the options being considered are going to involve a tremendous amount of pain.

      Michael

  • REED RICHARDS

    Michael,

    I don’t disagree with your diagnosis of the situation. What I question is the quasi-beating around the bush method of your last statement. You are not advocating government debt, but you acknowledge that when government spending stops on a dime, depression begins. So the question then becomes: What does Europe and the world do about this mess?

    Again, as I said before when you wrote another article along these same lines, you somewhat mislead your readers because the real solution is rather simple:

    1. Allow all bankrupt banks and unsound businesses to fail. All monopolies should be abolished

    2. Allow a true free market to thrive in which the government is not picking winners and losers via bailouts and corporate welfare and there is true competition amongst all.

    Were it not for the war party, also known as big government conservatives (republicans) and big government liberals (democrats) running everything into the ground, solutions one and two above oculd have been implemented long, long ago…………(LOL)

    • Michael

      Reed:

      I agree with number one and number two. However, if we continue to operate under our current debt-based monetary system and we attempt to go from trillion dollar deficits to a balanced federal budget it will cause a massive amount of economic pain.

      I just want people to understand this reality.

      Michael

      • mondobeyondo

        Which is precisely why it will never happen.

        Fixing this economic system will require a great deal of economic pain, and the American people aren’t ready to cope with more economic pain these days. We’re already at the breaking point.

        But the pain only gets worse the more time passes. And nothing’s getting done. The debt keeps rising. Congress keeps bickering.

        So… I don’t know……

  • Barn Cat

    These people aren’t stupid. The austerity measures are designed to shrink the economy then tighter austerity measures are needed. Which shrink the economy even further. The goal is to force the EU to become one country and end national sovereignty for individual nations. The end game is to create a disaster big enough to create a one-world government. The US will also be destroyed. Once it becomes part of the EU and the EU has America’s nuclear weapons it will be easy to force other countries into the one-world government.

  • Ulrick

    “Unfortunately, Europe does not have years. Europe is rapidly running out of time.”

    How ? Europe didn’t even start printing money unlike the US with their QE and this allow the continent to play the currency war game longer than what Americans would expect.

    Also, don’t forget about the gold. Europe has tonnes of gold and can back its currency with gold any time.

    • Barn Cat

      European countries are on the verge of default. One default will cause other EU countries to default and it will create banking failures across the EU. Governments won’t have money to spend. People will lose their money when the banks close. Businesses won’t have money to make payroll and people won’t have their wages paid. It will cause a severe depression.

  • http://survivalmedicineblog.com survivingshtfmom

    Sounds to me like Europe is bankrupt and like individuals who declare bankruptcy…they are in trouble. Its coming, it not a matter of IF anymore but WHEN. My own private business that I have had for 10 yrs online is already feeling the effects of their problems…I can already imagine what it will be like when they do finally give up and quit pretending that everything is going to be okay and sooner rather than later. Get it over with, move on and it will come back around again…that is a proven economic cycle.

  • Ulrick

    Also, there are no Lehman Brothers and MT Global collapse in Europe to this day.

    And even if the European financial explosed, Europe will survive cause its wealth and economy does not depend exclusively on the financial sector like in the US and in the UK.

    The US and their satellites Great Britain and Japan are few steps forward in the collapse.

  • Ulrick

    sorry I meant “more than a step forward”

  • http://www.recoverypartners.biz Alex Jurshevski

    I agree totally. What you need in this situation is a writedown and reckononing of the bad debts at the banks and the spovereign and a soft exit from the euro of the weaker eurozone countries. Consolidation in the banking sector cannot be avoided. It has been the refisal of the banks to submit to this reckonong that has pushed the Eurozone to the brink.

    read:http://www.recoverypartners.biz/blog/2011/12/12/living-in-the-past/

    and

    http://www.recoverypartners.biz/blog/2011/12/04/frau-merkel-just-say-%e2%80%9cnein%e2%80%9d/

  • Zoltanne

    Your equation sums it up beautifully. Great piece.

  • 007

    …there is no way that you can dramatically reduce government spending without experiencing a whole lot of pain….

    This is true for everyone and why it is childish and irresponsible to spend like a drunken sailor. It hurts too to get off of haroine,crack alcholal or tobacco. But to continue these habits leads to certain destruction.

    Like Bernie Madoff the government should not have made impossible promises to people. The public was stupid to believe the government would honor their promises.

    At the end of the day we all have to face the music. I give them a hell of a lot of credit for trying to face it now. The sooner they take the pain the sooner they can recover.

  • 007

    While I admire the effort, I do think the temptation for The ECB to step in and buy worthless government debt will prove to powerful to resist. When this happens, it will probably mark the beginning of the hyper-inflation phase of this economic disaster.

  • 007

    Also, this is setting up a interesting set of economic circumstances. Imagine if Europe gets it’s act together through strict deficit control. Then the ECB comes in and buys up just enough sovereign debt to bring the currency under control. The world would then breath a sigh of relief for a moment.

    The world would then turn it’s attention to the U.S. And say Europe looks good comaped to the U.S. This could mark the beginning of the dramatic decline in U.S. Treasuries followed by high interest rates and high inflation.

    If Europe gets under control with it’s spending with reasonable deficit control, this could spell disaster for the U.S. The world hates parking their money in our Treasuries. All they want is a safer place to park their money. When they find it, it will be a disaster for us.

    Remember, Revelations predicts a major European entity surviving composed of 10 countries that will be the most powerful economic entity in the world.

    • Kevin2

      Traditionally the US raised interest rates when it needed to borrow more. The previous game plan of cause and effect is no longer valid. The US just prints more bypassing the sale of T bills to others. The Federal Reserve “buys” the debt with more newly created money devaluing the present supply. The US does not fall alone because of the status of the USD as the Reserve Currency.

      “All they want is a safer place to park their money. When they find it, it will be a disaster for us.”

      Once the sale of Treasuries begins in earnest the wealth of the entire world goes with it as their remaining dollars decline in value. The mere mention of any policy that challenges the oil peg and reserve currency status of the USD invites attack directly (Iraq) or indirectly (Libya). There is absolutely nothing the power elite will not do to maintain the present system.

      It’s my belief that the one world currency will be the USD. Accept it or starve. Accept it or get overthrown. Accept it or be invaded. You can hold your pretty pieces of paper with birds and historic figures that your people respect but with one issuing authority and the currency exchanges frozen you have a de-facto one world currency. The power elite maintain rule with the mighty US military and nations of significant power share some of the spoils. “Let me control a nations money supply and I care not who writes it’s laws”, there you have it a one world government. Banga-Banga gets to have it’s holiday on the second Tuesday of the 5th week in the month and your women may be required to dress according to local custom. But on the REAL issues you have no local say. Think of a giant world with the individual countries as states without a 10 amendment. The groundwork has been laid right here.

      Everyone is looking at something new when in reality look at something old.

  • Dave in Scenic City

    Does not history teach us that war is the option of choice?

  • mondobeyondo

    So, who’s going to bail out the European Central Bank? (Hint: It won’t likely be the U.S. Federal Reserve. Hey, we’re broke, too!!)

    Yep, Europe is about to experience some big league pain. “Man up”, take your spanking as it comes (“Thank you sir, may I have another?”) – and hope for the best.

  • xander cross

    I agree with you Michael. Its time for people to grow up and get ready for this collpase. What is happening in Europe will happen in the United States. I feel bad for those that continue to deny and pretend that everything is okay. We must be ready.

  • David M

    I am in full agreement a collapse is headed our way.

    But for arguments sake, what acts or facts could be pointed to to say things are getting better. That a bottom has been hit and things are starting to recover.

  • James

    Michael,

    “Some have been forced to lend out their gold reserves to maintain access to US dollar funding.”

    Lend out to who? Do you know? I get the feeling the answer to this question is one of the big keys as to why things are going down in the manner they are.

    • 007

      Who is dumb enough to sell gold for dollars.

      • knightowl77

        People who have to cover their losses immediately or face ruin…they’re behind the fall in Gold prices now as many sell to pay debts.

      • James

        Anyone in government or banking?

  • JMorcan

    The Western debt crisis is the result of many things. On the other hand, propserity has but one solution – economic growth. Until politicians take action to ban imports made by $0.50/hr workers in Asia, we will continue our decline into poverty.

    • MBecker

      Been tried before, ever hear of Smoot-Hawley?

  • http://fotozine.eu Rae Merrill

    Damned if you do damned if you don’t. The author suggests either choice will fail so I think the austere package is the only fiscally responsible solution and of course other posters are correct in saying that the best solution for these governments is a major war. That way you can wipe out lots of ‘useless eaters’ as the NWO thinks of us, create a massive demand for armaments and then, once you’ve destroyed the infrastructure of each country you can set the survivors to task with the rebuilding process and that will create a boom period lasting decades. Of course, human nature being as it is, we will once again be back in the same position again needing further wars to keep the cycle going. That is of course, if the planet is habitable by that time.

  • Pitchfork Ready

    This new agreement between the European nations will collapse for other reasons that the basic lousy economics.

    It’s tyrannical for some unelected Technocrat chosen by losers in Brussels, Berlin, and Paris to impose these reforms on a sovereign nation. This is what parliaments are for. I can’t for a second believe that people are going to accept this in the long run.

    However, these are Europeans and soft serfdom is in their DNA so maybe I’ll be wrong.

  • mondobeyondo

    Tick, tock. Tick, tock. Tick, tock… KABOOM!!

    Yes, you guessed it! A time bomb!

    Will Europe’s troubles affect America? Of course they will. The banking industry is so interconnected. What affects Europe, affects America, which affects China and Japan, which affects India, and so forth.

  • Cinderella Man JD

    Im getting pretty tired of all the Christian bashing. We have to put up with being told we cant pray in public, we cant have the ten commandments in public, no Jesus statues, ridiculed, persecuted, excecuted, (in other countries but I fear coming soon to America) but we’re supposed to bend over backwards for our Muslim “friends” at every time. (example public foot baths and forced Islamic images at private Catholic colleges). This is crap. Im about ready to take Eric Cartman’s advice that the only way to fight hate is with MORE HATE!! LOL. Just kidding. But seriously Tapper, you are so full of it. Youre 22. Nobody listens to 22 yr olds. Just get over it. I love Jesus Michael loves Jesus, Tim Tebow loves Jesus, and lots of these readers love Jesus. If you opened your heart to him, you would find that life is happier and more fulfilling than being a simple minded atheist. People without faith are afraid of anything that is not easily explained in a nice, rational, scientifical, way. God is a supernatural force that guides our lives in every way. If you look around, miracles happen all the time. “Walk on water, change coke to pepsi, found my f**king car keys. You cant judge this shit on merit.” -Samuel L. Jackson from Pulp Fiction.

    • backStabber

      Keep your religious delusions to yourself mate, not everybody and especially us secular Europeans believe in your insane fantasies. Do you seriously think for one minute that the sky will open and some bloke in a beard is going to save our ass ?. Unless we GROW UP and deal with our MAN MADE problems we’ll be back to blaming cats and burning witches for our misfortunes. Idiots.

      • knightowl77

        “Do you seriously think for one minute that the sky will open and some bloke in a beard is going to save our ass ?. ”

        Ummm, we don’t think he is going to save your ass per se…You have to believe before he gets here…Your ass is toast.

    • Xander cross

      According to the bible, you are not supposed to pray in public at all. But then again, most Christians ignore that part of the bible.

      • knightowl77

        Where does it say that, exactly???

        • 007

          Jesus prayed in public, gave us Lord’s prayer, gave thanks for everything including meals.

      • Lennie Pike

        We’re not supposed to pray in public the same way that the Pharisees prayed in public. They prayed in public in a way that was not sincere, and that is what Jesus was saying – not that praying in public was wrong.

        It is important to learn to discern the English language – exactness and focus is always needed to avoid drawing unintended meanings and conclusions.

  • Gary2

    Dan Beucke, Top Income Tax Rate: How’s 83% Sound? Bloomberg BusinessWeek, December 9, 2011. Three of the world’s top experts on the incomes of the ultra rich estimate how high taxes on the rich could go without any adverse economic impact.

    The world needs to tax the rich hard and spread the wealth!

    • knightowl77

      So then we can all be poor? Yea like I am going to follow some guy in a minimum wage job that saw his income go from $7.50 an hour to $9.50 an hour because you spread it around…Meanwhile the Big Mac went from $3.85 a sandwich to $4.52 a sandwich due to inflation… Get a clue, read an econ book about creating wealth….Or read a fairy tale since you are into those…Read about Killing the Goose that laid the Golden Eggs…

  • Jim

    Michael… For a man with an education you do way too much bible thumping. It amazes me that educated people, who understand science, and can see the facts, still fail to see the forest through the trees. When I was three years old I thought that everyone was on TV. I could see people on TV and assumed that because I could see them, they could see me. Eventually, after my stupidity was pointed out a few times, I realized that I was simply wrong. Since then I’ve been wrong on several other occasions, but it gets easier to admit it each time it happens. You should try it… Or find a good drug… Either would present a far greater sense of reality.

    • Michael

      Jim:

      When people ask me a question about my faith I am going to give them an answer.

      And in my many years of investigation, I have found that logic, reason, science and all the evidence points to the fact that Christianity is true.

      Michael

      • http://www.robbysworks.com Robert

        Your statement is not true. There is in fact some evidence which points to Christian belief as being not only false but harmful. But I think your error is due more to inattention to the quality of your writing, as you are writing, than it is due to insincere intentions on your part. I think what you have probably really done, instead of having engaged in investigation, is selectively concentrated on identifying ideas which support your belief. You need to look at things anew. Examine ideas for the purpose of discovering what is wrong with them, or, at least, examine them to understand what is true, and not merely believing those to be correct which tend to support your beliefs.

    • r.bitting

      Jim, Yes, you have been wrong on many occasions since then. This is yet another. Please share what you believe and what you base it on. You see, it’s not the Christian only, who has to provide evidence for their beliefs ( thats a common misconception ), it’s also applies to all other worldviews, even yours, whatever that may be.

    • kyky

      Get over it.

    • Hendrik Mills

      Jim, I also used to be a skeptic and disbelieved in God the Creator. When I actually started investigating (one example among many: actually reading Darwin’s Origin of Species from cover to cover, looking for scientific, quantitative data) I found that evolution is like the emperor’s new clothes…without hard, empirical substance. Likewise other theories that try to debunk Christianity and God’s miracles…they are not based on rigorous, exacting historical research. I am a Christian, and traditional Catholic, precisely because I use logical reasoning …not in spite of it.

  • Newton

    The interesting thing about history repeating itself is that you don’t know it was repetition
    until well after the fact.

    While the repitition may have similarities in the aftermath; while still engaged their are just too many different variables to know exactly what the outcome will be. Everyone has fingerprints; but their all different.

    Michael seems to know a good deal about this European crisis – I do not. What I do know is that like it or not; their is one country in the world with valuable paper; the USA and countries still trust our paper; worthless or not – which is why we were able to basically give the ECB 7 Trillion — in DOLLARS.

    Which brings me to my next point about the dollar. You like to say; and imply, that the printing of more dollars in some way debases
    the currency in some way. Were it actually backed by something of value; I would agree – but we are talking about the worlds reserve currency – a fiat money with only one value and that my friend is perception. They/We THINK it’s valuable & as long as that is in place; the Fed can and will print, digitize and otherwise guarantee greenbacks and the whole world will continue to gobble them up in their various forms.

    • 007

      It will work, until it stops working. Know one knows when the Dollar will be abandoned. My bet is that the dollar will be in trouble the day the world believes that Europe has stabilized. As painful as What Europe is doing, they are headed in the right direction and light years ahead of the U.S.

  • Jo

    The next Step is to take you to WAR!!!!!!

    Remember, the country that Controls Eurasia…WINS!!!

  • Jo

    Country that Controls EURASIA wins on The Grand Chessboard as ZBIG put it.

    The next step is WAR!!!!!!!!

  • JustanOguy

    Greece was forced to raise taxes and implement brutal Austerity measures?

    Brutal? Really? Could you point those out?

    I guess it’s brutal for Greek standards of socialism but for the real world? I don’t think so…. considering how they ended up where they are in the first place.

    http://www.guardian.co.uk/business/2011/nov/01/greece-austerity-measures

    Granted… they can’t print up money like the U.S. does but their Govt. has had it pretty cushy for quite some time.

  • Klean

    the end is here… we are a failed species, obviously. not just some men, all men want to watch the world burn, so hurry up already.

  • http://EconomicCollapse Already Gone

    Out of the frying pan and into the fire.

  • http://worldendsat5newsat11.blogspot.com Tony Lamb

    Things are just fine, go back to sleep, and sleep sound, quiet and confident in our political leaders to make the best decisions, in our best interest.
    Nighty-Night
    http://surviving12-21-2012.blogspot.com

  • BenjiK

    #17 “There are already signs that European economic activity (as well as global economic activity) is really starting to slow down….”

    And yet we are media-fed economic statistics everyday that proclaim personal spending has been steadily increasing, along with record-breaking holiday-sales numbers.

    Admittedly, I’m not easily convinced of conspiracy theories, but I am not convinced these numbers are accurate, but falsely inflated to spur economic activity akin to “everybody else is spending, why aren’t you?”

    Exactly who is spending at record levels? It sure isn’t me, my family, neighbors, friends, co-workers or anyone else I know, and I have a feeling this is true for the majority of the U.S. population.

  • Paul

    The Euro is still more expensive to buy than years ago. Go to finance.yahoo.com and check the exchange rates of 5 years back.

    And to give you an idea:
    20 years ago the DM traded at between 3.5 and 5.2 to the HK$. 1 EU= DM1.95.
    And now 1 EU gives you HK$10.1, compared with the time of EU introduction of HK$ 6.50.

    Before I buy into EU and get rid of my other currencies the EURO needs to fall much further.

  • Paul

    What do you mean by “brutal austerity” in Greece?

    That they have to pay tax now?

  • vij

    Mega Fail: 17 Signs That The European Financial System Is Heading For An Implosion Of Historic Proportions
    ————————————————-
    If you you think that everybody can be fooled continuously than it is all right. But now is not the case. Consciousness is rising very fast. Soon no body can fool the others.
    Future looks dim of USA and City not of EU

  • MIEKEN

    Hello out there,
    I am from Germany(sorry for my bad language)

    The people in Germany have 19 Billions of Euro!!!! the Goverment can “steal” us!
    They have the Right to do that in our Groundrights!!!
    So if trouble comes ,Germany get(takes) this money and finsh Euro!

    Good luck to all of u

  • Lennie Pike

    Many of you commenters are mistaken. Although it certainly doesn’t help the situation, European government debt and socialism is not what is causing “Europe’s” economic system to collapse.

    U.S. government debt and socialism is not what caused the “too big to fail crises” in the U.S. in 2008 – the European Crisis is a repeat of that, and 2008 will be repeated in the U.S. (but it will be fatal next time) since absolutely nothing was done to prevent it from happening again – we should wonder why nothing was done.

    Europeans are being attacked by banksters through derivatives in the attempt to make debt slaves out of them so to cause enough suffering that the (it already exists) one world currency will not only be welcomed, but will be demanded.

    The ones profiting from this gambling and the attacks on taxpayers may not be aware that the one world currency is the reason banksters are being allowed to continue gambling, but the ones who have control obviously do – it’s the age-old plan of their master.

    In Iceland the attack didn’t work, the people told the banksters to go f***-off. The people were well informed of the con so their politicians could not obey the criminal banksters that were bribing or threatening them without risking their necks. Also, there were not any Icelanders willing to don the black storm trooper riot gear to do violence against their own protesting fellow citizens.

    In Europe and the U.S. there are plenty of ignorant non-thinking order takers willing to do violence against their innocent and for the most part peacefully protesting fellow citizens.

    There is no rule of law for the people who own this financial system or for the thousands of politicians, regulators, police, military, etc. who work for them and benefit from it.

    Noticed how there is a rule of law for the rest of us though? The number of laws and regulations for us to obey keeps increasing at a very high rate.

    The end-game will be the full implementation of the one world currency, and most people will gladly accept it in the mistaken belief that it will stop the misery – that is the reason the financial chaos has been engineered.

    Why would there not be any regulation of derivatives knowing that they are destroying the economic system? Who rules over the regulators – Congress? (Not the EPA.) Who rules over Congress? – we the people? – Yea right.

    Ever heard of the Golden Rule? He who has the gold makes the rules. In this case “they” incredibly have been able to convince everyone that their paper is gold. Who do I speak of? What kind of people are they?

    Wake up before you are dead! “They” will kill you, they love to kill etc., etc., etc..

  • http://www.spiritofjubilee.com spiritofjubilee

    Hey Theeconomiccollapseblog,
    Speaking of which, A successful book title does more than just sell your book by describing the change–or benefit–it offers. The best book titles create lasting brands for their authors. These brands ensure years of healthy sales, while helping authors sell future books and creating a brand for the author’s business.
    Great Job!
    In America: governments, businesses, individuals are now buried under a mountain of debt. A mountain of debt that will never be repaid.

    Who will borrow when they can’t make the payments on the debt that they have already? The math alone calls for a system reset, a debt jubilee.

    Investors are already losing… in a rigged monetary casino that rewards usury, speculation, and currency manipulation while looting main street.

    There is a moral principle that debts should be honored. That is, debts between businesses that buy and sell real products, not bundled ponzi schemes, debts between individuals, between friends and businesses that know each other to be rational and moral, debts based on investments where there is a rational expectation of return.

    There is also a moral principle that unjust debts should be cancelled, and usury legislated against. Debts that are ‘odious’, debts based on fraud, debts to dictators, debts arranged by oligarchs without the consent of the general population (the 99 percent who have been left out of the equation), debts based upon compound interest upon compound interest, that should have been written off long ago, the debts need to be cancelled in a general jubilee. Think outside the box. It’s time for a jubilee.

  • JamesAt17

    All of this has been ‘made’ to be so confusing that no one can come up with an answer to solving the debt problems of the world. Gadaffi had one for the African nations, and look what happened to him. Every nation printing their own debt free money as it was before the world had a central bank/federal reserve should be the answer used to solve this banksters debt problem. Let any country attempt to try that and watch NATO come right in and disrupt the country saying their leader is killing people so that they can bomb the crap out of everyone and take the nation over, set up a central bank and rob the people of that nation into poverty. Look at Lybia and find the real truth about what happened there and you will see the same people are leading the world into the same kind of conflict.

    • Lennie Pike

      True. Syria, Iran, and Russia are next – actually they’re already being worked on.

      That’s real smart – messing around with Russia. The people who have overthrown the U.S. Government are completely insane.

  • JamesAt17

    Lennie Pike – Your right. I read your comment after I made the one before this. That is one reason they killed Gadaffi. He was going against the one world currency and those that were/are forcing it on the world at this time.

    • Lennie Pike

      John F. Kennedy also tried to interfere with their plans for a one world currency. This plan is not something they have just come up with. It was probably discussed at Jekyll Island in 1913 and even before that.

  • sumlaude

    The Governments have to acknowledge a terrible fact to help the economy and our future as humans:
    There are too many people in this world
    The planet was sufficient for up to 3000 million persons. We are 7000 million. Poverty has increased and will accelerate, the economic system will deteriorate further very fast and the sustainability of our lovely Earth will die and thus we humans.
    I wonder where the bright minds that can look a bit farther than their noses are ? .….clearly not in any government that can be seen.
    On my part I ask for pardon to my grandchildren. The world you are to live in will be sad and terrible.

    • Lennie Pike

      The planet is not sufficient? WROOOOOOOOOONG!!!

      There easily could be “sufficient” for 100 thousand million. What, are you saying that God would not make possible the care of his creations – Human Beings? He promised to give us our “Daily Bread”

      Poverty is caused by selfish assholes that “want the whole scene for themselves baby”, and they use the threat of violence carried out by their agents to get it. Their cowardice and hypocrisy prevents them from carrying out the actual violence themselves.

      “Now you’re out”

      There could be peace, and plenty to go around if it were not for these few sick pricks.

      Your English ain’t bad, but not good enough. We Americans – mostly Christians still, don’t put up with that crap as well as the rest of the world does.

  • Bob

    The answer is simple and inevitable. Pay off the debts with devalued curremcy. Simply print Euros until it drops to some realistic value. It is 40% overvalued. A Euro should only be worth about $US0.9
    It’s a no brainer not a crises. Anyway, it will happen.
    Gold is the perfect greater fool investment. There’s always a greater fool who thinks it’s worth more. Aged single malt scotch makes more sense.

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