Greece

It Is About To Get Ugly: Oil Is Crashing And So Is Greece

February 4, 2015February 4, 2015 by Michael

The price of oil collapsed by more than 8 percent on Wednesday, and a decision by the European Central Bank has Greece at the precipice of a complete and total financial meltdown. What a difference 24 hours can make. On Tuesday, things really seemed like they were actually starting to get better. The price of oil had rallied by more than 20 percent since last Thursday, things in Europe seemed like they were settling down, and there appeared to be a good deal of optimism about how global financial markets would perform this month. But now fear is back in a big way. Of course nobody should get too caught up in how the markets behave on any single day. The key is to take a longer term point of view. And the fact that the markets have been on such a roller coaster ride over the past few months is a really, really bad sign. When things are calm, markets tend to steadily go up. But when the waters start really getting choppy, that is usually a sign that a big move down in on the horizon. So the huge ups and the huge downs that we have witnessed in recent days are likely an indicator that rough seas are ahead.

A stunning decision that the European Central Bank has just made has set the stage for a major showdown in Europe. The ECB has decided that it will no longer accept Greek government bonds as collateral from Greek banks. This gives the European Union a tremendous amount of leverage in negotiations with the new Greek government. But in the short-term, this could mean some significant pain for the Greek financial system. The following is how a CNBC article described what just happened…

“The European Central Bank is telling the Greek banking system that it will no longer accept Greek bonds as collateral for any repurchase agreement the Greek banks want to conduct,” said Peter Boockvar, chief market analyst at The Lindsey Group, said in a note.

“This is because the ECB only accepts investment grade paper and up until today gave Greece a waiver to this clause. That waiver has now been taken away and Greek banks now have to go to the Greek Central Bank and tap their Emergency Liquidity Assistance facility for funding,” he said.

And it certainly didn’t take long for global financial markets to respond to this news…

The Greek stock market closed hours ago, but the exchange-traded fund that tracks Greek stocks, GREK, crashed during the final minutes of trading in the US markets.

The euro is also getting walloped, falling 1.3% against the US dollar.

The EUR/USD, which had recovered to almost 1.15, fell to nearly 1.13 on news of the action taken by the ECB.

But this is just the beginning.

In coming months, I fully expect the euro to head toward parity with the U.S. dollar.

And if the new Greek government will not submit to the demands of the EU, and Greece ultimately ends up leaving the common currency, it could potentially mean the end of the eurozone in the configuration that we see it today.

Meanwhile, the oil crash has taken a dangerous new turn.

Over the past week, we have seen the price of oil go from $43.58 to $54.24 to less than 48 dollars before rebounding just a bit at the end of the day on Wednesday.

This kind of erratic behavior is the exact opposite of what a healthy market would look like.

What we really need is a slow, steady climb which would take the price of oil back to at least the $80 level. In the current range in which it has been fluctuating, the price of oil is going to be absolutely catastrophic for the global economy, and the longer it stays in this current range the more damage that it is going to do.

But of course the problems that we are facing are not just limited to the oil price crash and the crisis in Greece. The truth is that there are birth pangs of the next great financial collapse all over the place. We just have to be honest with ourselves and realize what all of these signs are telling us.

And it isn’t just in the western world where people are sounding the alarm. All over the world, highly educated professionals are warning that a great storm is on the horizon. The other day, I had an economist in Germany write to me with his concerns. And in China, the head of the Dagong Rating Agency is declaring that we are going to have to face “a new world financial crisis in the next few years”…

The world economy may slip into a new global financial crisis in the next few years, China’s Dagong Rating Agency Head Guan Jianzhong said in an interview with TASS news agency on Wednesday.

“I believe we’ll have to face a new world financial crisis in the next few years. It is difficult to give the exact time but all the signs are present, such as the growing volume of debts and the unsteady development of the economies of the US, the EU, China and some other developing countries,” he said, adding the situation is even worse than ahead of 2008.

For a long time, I have been pointing at the year 2015. But this year is not going to be the end of anything. Rather, it is just going to be the beginning of the end.

During the past few years, we have experienced a temporary bubble of false stability fueled by reckless money printing and an unprecedented accumulation of debt. But instead of fixing anything, those measures have just made the eventual crash even worse.

Now a day of reckoning is fast approaching.

Life as we know it is about to change dramatically, and most people are completely and totally unprepared for it.

Radical Leftists Win Election In Greece – Future Of Eurozone In Serious Jeopardy

January 25, 2015January 25, 2015 by Michael

Radical leftists have been catapulted to power in Greece, and that means that the European financial crisis has just entered a dangerous new phase. Syriza, which is actually an acronym for “Coalition of the Radical Left” in Greek, has 36 percent of the total vote with approximately 80 percent of the polling stations reporting. The current governing party, New Democracy, only has 28 percent of the vote. Syriza leader Alexis Tsipras is promising to roll back a whole host of austerity measures that were imposed on Greece by the EU, and his primary campaign slogan was “hope is on the way”. Hmmm – that sounds a bit familiar. Clearly, the Greek population is fed up with the EU after years of austerity and depression-like conditions. At this point, the unemployment rate in Greece is sitting at 25.8 percent, and the Greek economy is approximately 25 percent smaller than it was just six years ago. The people of Greece are desperate for things to get better, and so they have turned to the radical leftists. Unfortunately, things may be about to get a whole lot worse.

Once they formally have control of the government, Syriza plans to call for a European debt conference during which they plan to demand that the repayment terms of their debts be renegotiated. But the rest of Europe appears to be highly resistant to any renegotiation – especially Germany.

Syriza says that it does not plan to unilaterally pull Greece out of the eurozone, and that it also intends for Greece to continue to use the euro.

But what happens if Germany will not budge?

Syriza’s entire campaign was based on promises to end austerity. If international creditors refuse to negotiate and continue to insist that Greece abide by the austerity measures that were previously put in place, what will Syriza do?

Will Syriza back down and lose all future credibility with Greek voters?

Since 2010, the Greek people have endured a seemingly endless parade of wage reductions, pension cuts, tax increases and government budget cutbacks.

The Greek people just want things to go back to the way that they used to be, and they are counting on Syriza to deliver.

Unfortunately for Syriza, delivering on those promises is not going to be easy. They may be faced with a choice of either submitting to the demands of their international creditors or choosing to leave the eurozone altogether.

And if Greece does leave the eurozone, the consequences for all of Europe could be catastrophic…

Syriza risks overplaying its hand, said International Capital Strategies’ Rediker. “Given that the ECB controls the liquidity of the Greek banking system, and also serves as its regulator through the SSM (Single Supervisory Mechanism), going toe-to-toe with the ECB is one battle that could end very badly for the Greek government.”

If the ECB were to stop funding the liquidity of the Greek banks, the banks could collapse—an event that could lead to Greece abandoning the euro and printing its own money once more.

Milios didn’t believe it would come to that, saying, “No one wants a collapse of banks in the euro zone. This is going to be Lehman squared or to the tenth. No one wants to jeopardize the future of the euro zone.”

Hopefully cooler heads will prevail, because one bad move could set off a meltdown of the entire European financial system.

Even before the Greek election, the euro was already falling like a rock and economic conditions all over Europe were already getting worse.

So why would the Greeks risk pushing Europe to the brink of utter disaster?

Well, it is because economic conditions in Greece have been absolutely hellish for years and they are sick and tired of it.

For example, the BBC is reporting that many married women have become so desperate to find work in Greece that they are literally begging to work in brothels…

Some who have children and are struggling to support them have turned to sex work, to put food on the table.

Further north, in Larissa, Soula Alevridou, who owns a legal brothel, says the number of married women coming to her looking for work has doubled in the last five years.

“They plead and plead but as a legal brothel we cannot employ married women,” she says. “It’s illegal. So eventually they end up as prostitutes on the streets.”

When people get this desperate, they do desperate things – like voting radical leftists into power.

But Greece might just be the beginning. Surveys show that the popularity of the EU is plummeting all over Europe. Just check out the following excerpt from a recent Telegraph article…

Europe is being swept by a wave of popular disenchantment and revolt against mainstream political parties and the European Union.

In 2007, a majority of Europeans – 52 per cent – trusted the EU. That level of trust has now fallen to a third.

Once, Britain’s Euroscepticism was the exception, and was seen as the biggest threat to the future of the EU.

Now, other countries pose a far bigger danger thanks to the political discontents unleashed by the euro.

At this point, the future of the eurozone is in serious jeopardy.

I have a feeling that major changes in Europe are on the way which are going to shock the planet.

Meanwhile, the rest of the globe continues to slide toward another major financial crisis as well.

So many of the things that preceded the last financial crisis are happening once again. This includes a massive crash in the price of oil. Most people have absolutely no idea how critical the price of oil is to global financial markets. I like how Gerald Celente put it during an interview the other day…

I began getting recognition as a trend forecaster in 1987. The Wall Street Journal covered my forecast. I said, ‘1987 would be the year it all collapses.’ I said, ‘There will be a stock market crash.’ One of the fundamentals I was looking at were the crashing oil prices in 1986.

Well, we see crashing oil prices today and the banks are much more concentrated and levered up in the oil patch than they were in 1987. From Goldman Sachs to Morgan Stanley banks have been involved in major debt financing, derivatives and energy transactions. But much of this debt has not been sold to investors and now we are going to start seeing some big defaults.

By itself, the Greek election would be a significant crisis.

But combined with all of the other economic and geopolitical problems that are erupting all over the planet, it looks like the conditions for a “perfect storm” are rapidly coming together.

Unfortunately, the overall global economy is in far worse shape today than it was just prior to the last major financial crisis.

This time around, the consequences might just be far more dramatic than most people would ever dare to imagine.

If You Are Waiting For An “Economic Collapse”, Just Look At What Is Happening To Europe

January 8, 2014 by Michael

If you are anxiously awaiting the arrival of the “economic collapse”, just open up your eyes and look at what is happening in Europe. The entire continent is a giant economic mess right now. Unemployment and poverty levels are setting record highs, car sales are setting record lows, and there is an ocean of bad loans and red ink everywhere you look. Over the past several years, most of the attention has been on the economic struggles of Greece, Spain and Portugal and without a doubt things continue to get even worse in those nations. But in 2014 and 2015, Italy and France will start to take center stage. France has the 5th largest economy on the planet, and Italy has the 9th largest economy on the planet, and at this point both of those economies are rapidly falling to pieces. Expect both France and Italy to make major headlines throughout the rest of 2014. I have always maintained that the next major wave of the economic collapse would begin in Europe, and that is exactly what is happening. The following are just a few of the statistics that show that an “economic collapse” is happening in Europe right now…

-The unemployment rate in the eurozone as a whole is still sitting at an all-time record high of 12.1 percent.

-It Italy, the unemployment rate has soared to a brand new all-time record high of 12.7 percent.

-The youth unemployment rate in Italy has jumped up to 41.6 percent.

-The level of poverty in Italy is now the highest that has ever been recorded.

-Many analysts expect major economic trouble in Italy over the next couple of years. The President of Italy is openly warning of “widespread social tension and unrest” in his nation in 2014.

-Citigroup is projecting that Italy’s debt to GDP ratio will surpass 140 percent by the year 2016.

-Citigroup is projecting that Greece’s debt to GDP ratio will surpass 200 percent by the year 2016.

-Citigroup is projecting that the unemployment rate in Greece will reach 32 percent in 2015.

-The unemployment rate in Spain is still sitting at an all-time record high of 26.7 percent.

-The youth unemployment rate in Spain is now up to 57.7 percent – even higher than in Greece.

-The percentage of bad loans in Spain has risen for eight straight months and recently hit a brand new all-time record high of 13 percent.

-The number of mortgage applications in Spain has fallen by 90 percent since the peak of the housing boom.

-The unemployment rate in France has risen for 9 quarters in a row and recently soared to a new 16 year high.

-For 2013, car sales in Europe were on pace to hit the lowest yearly level ever recorded.

-Deutsche Bank, probably the most important bank in Germany, is the most highly leveraged bank in Europe (60 to 1) and it has approximately 70 trillion dollars worth of exposure to derivatives.

Europe truly is experiencing an economic nightmare, and it is only going to get worse.

It would be hard to put into words the extreme desperation that unemployed workers throughout Europe are feeling right now. When you can’t feed your family and you can’t find work no matter how hard you try, it can be absolutely soul crushing.

To get an idea of the level of desperation in Spain, check out the following anecdote from a recent NPR article…

Having trouble wrapping your head around southern Europe’s staggering unemployment problem?

Look no further than a single Ikea furniture store on Spain’s Mediterranean coast.

The plans to open a new megastore next summer near Valencia. On Monday, Ikea’s started taking applications for 400 jobs at the new store.

The company wasn’t prepared for what came next.

Within 48 hours, more than 20,000 people had applied online for those 400 jobs. The volume crashed Ikea’s computer servers in Spain.

Of course that should kind of remind you of what I wrote about yesterday. We are starting to see this kind of intense competition for low paying jobs in the United States as well.

As global economic conditions continue to deteriorate, things are going to get even tougher for those on the low end of the economic food chain. Poverty rates are going to soar, even in areas where you might not expect it to happen. In fact, one new report discovered that poverty has already been rising steadily in Germany, which is supposed to be the strongest economy in the entire eurozone…

A few days before the Christmas holidays, the Joint Welfare Association published a report on the regional development of poverty in Germany in 2013 titled “Between prosperity and poverty—a test to breaking point”. The report refutes the official propaganda that Germany has remained largely unaffected by the crisis and is a haven of prosperity in Europe.

According to the report, poverty in Germany has “reached a sad record high”. Entire cities and regions have been plunged into ever deeper economic and social crisis. “The social and regional centrifugal forces, as measured by the spread of incomes, have increased dramatically in Germany since 2006,” it says. Germany faces “a test to breaking point.”

Of course poverty continues to explode on this side of the Atlantic Ocean as well. In the United States, the poverty rate has been at 15 percent or above for three years in a row. That is the first time that this has happened since the 1960s.

And this is just the beginning. The extreme recklessness of European banks such as Deutsche Bank and U.S. banks such as JPMorgan Chase, Citibank and Goldman Sachs is eventually going to cause a financial catastrophe far worse than what we experienced back in 2008.

When that crisis arrives, the flow of credit is going to freeze up dramatically and economic activity will grind to a standstill. Unemployment, poverty and all of our current economic problems will become much, much worse.

So as bad as things are right now, the truth is that this is nothing compared to what is coming.

I hope that you are getting prepared for the coming storm while you still can.

All-Time High Unemployment: The Economic Depression In Europe Just Keeps Getting Deeper

October 31, 2013 by Michael

The unemployment rate in the eurozone is higher than it has ever been before. This week we learned that eurozone unemployment came in at an all-time high of 12.2 percent for September. Back in January 2012, it was sitting at just 10.4 percent. So anyone that believes that “things are getting better” in Europe is just being delusional. In fact, the economic depression in Europe just keeps getting deeper. The funny thing is that the mainstream media will barely call what is going on in Europe a “recession” even though the unemployment rates in both Spain and Greece are now much higher than anything that the United States ever experienced during the “Great Depression” of the 1930s. There haven’t been as many headlines about the financial crisis in Europe lately because the ECB has been papering over the debt problems of the periphery (at least for the moment), but the economic conditions on the ground for average Europeans just continue to get even worse. Later on in this article, you will read about a 25-year-old Spanish man with three college degrees that moved to London in a desperate search for a job who is now cleaning up poop for a living. The economic collapse of Europe continues to march on, and there is no end in sight.

All you have to do is look at the latest unemployment numbers to realize that things are getting worse in Europe.

In Italy, the unemployment rate is up to 12.5 percent.

In January 2012, less than two years ago, it was sitting at just 8.9 percent.

In Greece, the unemployment rate is up to an astounding 27.6 percent.

In January 2012, it was sitting at just 21.4 percent.

In Spain, the unemployment rate is up to 26.6 percent.

In January 2012, it was sitting at just 22.8 percent, and all the way back in January 2008 it was just 8.6 percent.

The youth unemployment statistics in the eurozone are even more horrifying…

Unemployment among the under-25s rose by 22,000 in September to 3,548,000 – nudging up youth jobless rate to 24.1%. In France, the youth jobless rate jumped from 25.6% to 26.1%, while in Italy it increased from 40.2% to 40.4%.

But as bad as those numbers are, they are nothing compared to what is going on in Spain and Greece. In Spain, the youth unemployment rate is up to 56.5 percent, and in Greece the youth unemployment rate is up to 57.3 percent.

And of course unemployment is not the only problem that the European economy is dealing with right now. The following are some more facts about the European economy that show that the economic depression in Europe just keeps getting deeper…

-European car sales are on pace to hit a 23 year low in 2013.

-The percentage of “bad loans” in Spain has soared to a new all-time record high.

-The number of mortgage applications in Spain has fallen 90 percent since the peak of the market.

-Citigroup is projecting that the unemployment rate in Greece will reach 32 percent in 2015.

-Over the last several years, Italy has experienced the biggest collapse in GDP growth that it has ever seen. Overall, the GDP of Italy has contracted by about 8 percent since 2008.

-The number of unemployed workers in Cyprus is now five times higher than it was before the financial crisis of 2008.

-It is being projected that Spain’s debt to GDP ratio will rise to nearly 100 percent by the end of next year.

-The debt to GDP ratio of Portugal is already up to 123 percent.

-The debt to GDP ratio of Italy is already up to 127 percent.

-Even though Greece has implemented a whole host of “austerity measures”, the debt to GDP ratio of Greece is now up to 156 percent.

But what these numbers cannot really communicate is the tremendous amount of pain and despair that millions upon millions of Europeans are experiencing right now.

For example, consider the story of Benjamin Serra Bosch, a 25-year-old Spanish man that moved to London in a desperate search for a job. He has three college degrees, including a Master’s Degree from the IEBS Business School in Barcelona. The following is a rough translation of a message that he recently posted on Facebook…

My name is Benjamín Serra, I have two bachelor degrees and a master’s degree, and I clean toilets.

No, it is not a joke. I do it to pay the rent for my room in London.

I’ve been working in a famous chain of cafes in the United Kingdom since May, and for the first time today, after 5 months working there, I see it clearly. I have been cleaning toilets. My thought was: “I received distinction in my two degrees and I clean other peoples’ poop in a country that isn’t my own.” Well, I also make coffee, clean the tables and wash cups.

And I am not ashamed to do so. Cleaning is a very decent job. What embarrasses me is having to do so because no one has given me an opportunity in Spain. Like me, there are many Spaniards, especially in London. “You are a plague,” I was told once here. And let’s not kid ourselves. We are not young people on an adventure to learn the language and have new experiences. We are immigrants.

I’ve always been very proud, I am not going to deny. Those who know me, you know. And I have to bust out a smile at customers who look over my shoulder as I am simply a “barista” (as they call it here). Some are so outrageous that it makes me want to pull out my University and master degrees and put them in their face. But it would not really do anything. It appears that those titles now only serve to clean the poop that I clean from the toilets in the cafe. A pity.

I thought that it deserved something better after putting so much effort in my academic life. It seems that I was wrong.

As economic conditions continue to decline all over Europe, anger and frustration with the “European experiment” continue to grow. UKIP’s Nigel Farage expressed these sentiments very eloquently during a speech on the 23rd of October when he stated that “what we are saying, large numbers of us from every single EU member state is: we don’t want that flag, we don’t want the anthem that you all stood so ram-rod straight for yesterday, we don’t want EU passports, we don’t want political union.”

Unfortunately, the elite of Europe are so obsessed with their little experiment that the only “solutions” to these economic problems that they are even willing to consider involve even more European integration.

And Americans certainly should not be looking down their noses at what is happening in Europe.

What is going on in Italy, France, Spain and Greece will be coming here soon enough. In fact, even during the midst of this so-called “economic recovery”, poverty continues to absolutely explode in the United States.

Economic conditions in both the United States and Europe have never even gotten close to where they were prior to 2008, and now the next major wave of the economic collapse is rapidly approaching.

This is just the beginning. Things are going to get much worse in the years ahead.

41 IMF Bailouts And Counting – How Long Before The Entire System Collapses?

July 4, 2013 by Michael

Broke nations are bailing out other broke nations with borrowed money. Round and round we go – where we stop nobody knows. As of April, 41 different countries had active financial “arrangements” with the IMF. Sometimes they are called “bailouts” and sometimes they are called other things, but in every single case they involve loans. And most of the time, these loans come with very stringent conditions. It is a form of “global governance” that most people don’t even know about. For decades, the IMF has been able to use money as a way to force developing nations to do what it wants them to do. But up until fairly recently, this had mostly only been done with poor nations. But now an increasing number of wealthy nations are turning to the IMF for help. We have already seen Greece, Portugal, Ireland and Cyprus receive bailouts which were partly funded by the IMF, Spain has received a bailout for its banking sector, and as I noted yesterday, it is being projected that Italy will need a major bailout within six months. How long can this go on before the entire system collapses?

Well, that would depend on how much money the lender has.

And so where does the IMF get their money?

The IMF gets their money from a bunch of nations that are absolutely drowning in debt themselves.

The IMF is funded by “wealthy” nations that dominate the global economy. The following is how Wikipedia describes the IMF’s quota system…

The IMF’s quota system was created to raise funds for loans. Each IMF member country is assigned a quota, or contribution, that reflects the country’s relative size in the global economy. Each member’s quota also determines its relative voting power. Thus, financial contributions from member governments are linked to voting power in the organization.

These are the five largest contributors to IMF funding…

United States – 16.75%

Japan – 6.23%

Germany – 5.81%

France – 4.29%

UK – 4.29%

But those countries are in trouble themselves. The U.S. has a debt to GDP ratio of over 100%. Japan has a debt to GDP ratio of over 200%.

The truth is that these countries are funding the IMF with borrowed money.

So what happens when the contributors run out of money and can’t contribute anymore?

All over the globe, an increasing number of countries are reaching out to the IMF for help. For example, on Thursday we learned that Pakistan is getting a new bailout from the IMF…

Pakistan and the International Monetary Fund have reached an initial agreement on a bailout of at least $5.3 billion.

Pakistani Finance Minister Muhammad Ishaq Dar and IMF mission chief Jeffrey Franks announced the agreement at a press conference Thursday.

And the new government in Egypt is hoping that the revolution that just occurred will not stop the flow of IMF funds…

In recent months, a handful of neighboring countries such as Qatar have been keeping Egypt’s economy afloat by loaning the country’s central bank cash. That has bought Morsi government time to delay implementing the politically-sensitive measures the IMF has sought as a precondition before it gives Cairo a $4.8 billion credit line. In particular, the IMF had said that Egypt must raise taxes and begin phasing out fuel subsidies.

It’s not the only cash at stake. Other international donors have vowed another $9.7 billion for the country once the IMF program is in place. Roughly $1.55 billion in bilateral aid from Washington could also be held up: under U.S. law, the administration can’t loan money to countries where the military is involved in an unconstitutional change in government.

But what often happens with these bailouts is that the “conditions” that are imposed prove extremely difficult to meet. For example, Greece has not implemented all of the “reforms” that they were ordered to implement, and so the flow of future funds may be threatened…

As Greece looks set to miss a key reform deadline set by international lenders, which could jeopardize further financial aid, a Greek government minister said it wasn’t Greece’s fault that it couldn’t live up to the demands of a flawed bailout program.

“There are failures [by Greece],but you assume that the program that has been effectively imposed on us is perfect, which is far from the case,” Nikos Dendias, minister of Public Order and Citizen Protection, told CNBC on Thursday.

His comments come after Greek finance ministry officials said on Wednesday that Greece would not meet targets on reforming its public sector by the deadline set by international lenders, putting further financial aid in jeopardy.

Once a nation gets hooked on bailout money from the IMF or from other international sources, it can be very hard to get off of it. But that is what these globalist organizations like – they want to be able to use money as a form of control.

As we saw with Greece, sometimes a nation will need bailout after bailout. And it appears that is also going to be the case with Portugal. The Portuguese government is on the verge of collapsing and their financial situation is being described as “very fragile”…

Portugal had been held up as an example of a bailout country doing all the right things to get its economy back in shape. That reputation is now harder to sustain and even before this latest crisis, the International Monetary Fund reported last month that Lisbon’s debt position was “very fragile”.

Coming soon after the near-collapse of the Greek government, which has been given until Monday to show it can meet the demands of its own EU-IMF bailout, the euro zone may be on the brink of falling back into full-on crisis.

Right now, Portuguese bond yields are absolutely soaring and the Portuguese economy is rapidly heading into depression.

Portugal is going to desperately need the assistance of the IMF.

But what happens when the nations that primarily fund the IMF start failing themselves?

The U.S. is a complete and total financial disaster and so is Japan. Much of Europe is already experiencing a full-blown economic depression and even China is showing signs of trouble.

So if the “wealthy” nations fail, who is going to be there to help the “poor” nations?

18 Signs That Massive Economic Problems Are Erupting All Over The Planet

June 2, 2013 by Michael

This is no time to be complacent. Massive economic problems are erupting all over the globe, but most people seem to believe that everything is going to be just fine. In fact, a whole bunch of recent polls and surveys show that the American people are starting to feel much better about how the U.S. economy is performing. Unfortunately, the false prosperity that we are currently enjoying is not going to last much longer. Just look at what is happening in Europe. The eurozone is now in the midst of the longest recession that it has ever experienced. Just look at what is happening over in Asia. Economic growth in India is the lowest that it has been in a decade and the Japanese financial system is beginning to spin wildly out of control. One of the only places on the entire planet where serious economic problems have not already erupted is in the United States, and that is only because we have “kicked the can down the road” by recklessly printing money and by borrowing money at an unprecedented rate. Unfortunately, the “sugar high” produced by those foolish measures is starting to wear off. We are going to experience a massive amount of economic pain along with the rest of the world – it is just a matter of time.

But for the moment, there are a lot of skeptics out there.

For the moment, there are a lot of people that are declaring that the problems of the past have been fixed and that we are heading for incredibly bright economic times ahead.

Unfortunately, those people appear to be purposely ignoring the economic horror that is breaking out all over the globe.

The following are 18 signs that massive economic problems are erupting all over the planet…

#1 The eurozone is now in the midst of its longest recession ever. Economic activity in the eurozone has declined for six quarters in a row.

#2 Italy’s economy has now been contracting for seven quarters in a row.

#3 Industrial production in Italy has fallen for 15 months in a row. It has now fallen to its lowest level in about 25 years.

#4 The number of people that are considered to be “seriously deprived” in Italy has doubled over the past two years.

#5 Consumer confidence in France has just hit a new all-time low.

#6 The number of unemployed workers seeking a job in France has hit a brand new all-time record high. Many unemployed workers in France are utterly frustrated at this point…

“I’ve sent CVs everywhere, I come to the unemployment agency every day, for 3 or 4 hours to look for work as a truck driver and there’s never anything,” said 42-year old Djamel Sami, who has been unemployed for a year, leaving a job agency in Paris.

#7 Unemployment in the eurozone as a whole has just hit a brand new all-time record high of 12.2 percent.

#8 Youth unemployment continues to soar to unprecedented heights in Europe. The following is from an article that was recently posted on the website of the Guardian that detailed how bad things are getting in some of the worst countries…

In Greece, 62.5% of young people are out of work, in Spain it’s 56.4%, then Portugal with 42.5%, and then Italy with 40.5%.

#9 Youth unemployment is being partially blamed for the worst rioting that Sweden has seen in many years. The following is how the Daily Mail described the riots…

Sweden is reeling after a third night of rioting in largely run-down immigrant areas of the capital Stockholm.

In the last 48 hours violence has spread to at least ten suburbs with mobs of youths torching hundreds of cars and clashing with police.

It is Sweden’s worst disorder in years and has shocked the country and provoked a debate on how Sweden is coping with youth unemployment and an influx of immigrants.

#10 An astounding 10 percent of all banking deposits were pulled out of banks in Cyprus during the month of April alone.

#11 Economic growth in India is the slowest that it has been in an entire decade.

#12 Suddenly Australia is experiencing some tremendous economic challenges. The following quotes are from a recent Zero Hedge article…

-“We’re seeing a much sharper contraction in the Australian economy than we’d anticipated four or five months ago”. Coffey MD, John Douglas. The engineering group has seen its shares, which traded above $4 in 2007, hit 10c last week.

-“By 10am, the Fitness First gym in the city is packed full of brokers who’ve had a gutful of sitting at their desk doing nothing – salary cuts are starting and next it will be jobs” Perth broker

-“Oh mate, the funding market is dead. You are now seeing a few deeply discounted rights issues for those that are reaching desperate levels ….. liquidity has completely disappeared” Perth broker

#13 The financial system in Japan is beginning to spin wildly out of control. The Japanese stock market has now declined about 15 percent from the peak, and many believe that the yen will continue to get weaker and that interest rates in Japan will start to rise significantly.

#14 Global cash flow is declining at a rate not seen since the last recession. This indicates that we could be headed for a global credit crunch.

#15 Real wages continue to decline in the United States. Even though we are being told that the U.S. is experiencing an “economy recovery”, real weekly earnings have declined from $297.79 in 2010 to $295.49 in 2011 to $294.83 in 2012. (The preceding calculation is based on 1982-1984 dollars)

#16 Wall Street is buzzing about the fact that “the Hindenburg Omen” appeared at the end of last week. So exactly what is “the Hindenburg Omen”? The following are the criteria that are used to determine whether it has appeared or not…

1. The daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day.

2. The smaller of these numbers is greater than or equal to 69 (68.772 is 2.2% of 3126). This is not a rule but more like a checksum. This condition is a function of the 2.2% of the total issues.

3. That the NYSE 10 Week moving average is rising.

4. That the McClellan Oscillator ( a market breadth indicator used to evaluate the rate of money entering or leaving the market and interpretively indicate overbought or oversold conditions of the market)is negative on that same day.

5. That new 52 Week Highs cannot be more than twice the new 52 Week Lows (however it is fine for new 52 Week Lows to be more than double new 52 Week Highs).

When the Hindenburg Omen makes an appearance, it supposedly means that the U.S. stock market is likely to experience a serious decline within the next 40 days.

#17 As I wrote about the other day, the SentimenTrader Smart/Dumb Money Index is now the lowest that it has been in more than two years. That means that lots of “smart money” has been getting out of the market and lots of “dumb money” has been pouring in.

#18 Margin debt on the New York Stock Exchange has set a new all-time high. The following is from a recent Market Oracle article…

Margin debt—that’s the amount of money borrowed to purchase stocks—on the New York Stock Exchange (NYSE) reached its all-time high in April. Margin debt on the NYSE registered at $384.3 billion as the key stock indices hit new record-highs. (Source: New York Stock Exchange web site, last accessed May 29, 2013.) The highest margin debt ever reached prior to this was in July of 2007, when it stood just above $381.0 billion. At that time, just like today, the key stock indices were near their peaks and “buy now before it’s too late” was the prominent theme of the day

Whenever margin debt spikes like this, a stock market crash almost always follows. If you doubt this, just check out the chart in this article.

Wall Street has had a good couple of years, but it has been a “false prosperity” that has been pumped up by reckless money printing by the Federal Reserve. Just like all of the other stock market bubbles that we have seen in recent years, this one is going to burst too. And as Marc Faber recently pointed out, this bubble has been particularly beneficial to the wealthy…

The Fed has been flooding the system with money. The problem is the money doesn’t flow into the system evenly. It doesn’t increase economic activity and asset prices in concert. Instead, it creates dangerous excesses in countries and asset classes. Money-printing fueled the colossal stock-market bubble of 1999-2000, when the Nasdaq more than doubled, becoming disconnected from economic reality. It fueled the housing bubble, which burst in 2008, and the commodities bubble. Now money is flowing into the high-end asset market – things like stocks, bonds, art, wine, jewelry, and luxury real estate.

Money-printing boosts the economy of the people closest to the money flow. But it doesn’t help the worker in Detroit, or the vast majority of the middle class. It leads to a widening wealth gap. The majority loses, and the minority wins.

The fact that the U.S. stock market has set new all-time record high after new all-time record high in recent months means very little. At this point, the stock market has become completely divorced from economic reality. When this current bubble bursts, the adjustment is going to be very painful. Wall Street will likely whine and complain and ask for more bailouts, but they may find that authorities are not nearly as sympathetic this time.

Much of the rest of the world is already experiencing the next major wave of the economic collapse. Reckless money printing by the Fed and reckless borrowing and spending by the federal government may have delayed the inevitable in the United States for a little while, but those measures have also made our long-term problems even worse.

There was one piece of advice that Ben Bernanke included in his commencement speech to students at Princeton recently that I thought was particularly ironic…

“Don’t be afraid to let the drama play out.”

Will he take his own advice when the next great financial crisis strikes the United States?

That seems very unlikely.

Unfortunately, things are not going to be so easy to fix this next time.

What happened back in 2008 was just a preview.

What is coming next is going to absolutely shock the world.

20 Signs That The Next Great Economic Depression Has Already Started In Europe

April 29, 2013 by Michael

The next Great Depression is already happening – it just hasn’t reached the United States yet. Things in Europe just continue to get worse and worse, and yet most people in the United States still don’t get it. All the time I have people ask me when the “economic collapse” is going to happen. Well, for ages I have been warning that the next major wave of the ongoing economic collapse would begin in Europe, and that is exactly what is happening. In fact, both Greece and Spain already have levels of unemployment that are greater than anything the U.S. experienced during the Great Depression of the 1930s. Pay close attention to what is happening over there, because it is coming here too. You see, the truth is that Europe is a lot like the United States. We are both drowning in unprecedented levels of debt, and we both have overleveraged banking systems that resemble a house of cards. The reason why the U.S. does not look like Europe yet is because we have thrown all caution to the wind. The Federal Reserve is printing money as if there is no tomorrow and the U.S. government is savagely destroying the future that our children and our grandchildren were supposed to have by stealing more than 100 million dollars from them every single hour of every single day. We have gone “all in” on kicking the can down the road even though it means destroying the future of America. But the alternative scares the living daylights out of our politicians. When nations such as Greece, Spain, Portugal and Italy tried to slow down the rate at which their debts were rising, the results were absolutely devastating. A full-blown economic depression is raging across southern Europe and it is rapidly spreading into northern Europe. Eventually it will spread to the rest of the globe as well.

The following are 20 signs that the next Great Depression has already started in Europe…

#1 The unemployment rate in France has surged to 10.6 percent, and the number of jobless claims in that country recently set a new all-time record.

#2 Unemployment in the eurozone as a whole is sitting at an all-time record of 12 percent.

#3 Two years ago, Portugal’s unemployment rate was about 12 percent. Today, it is about 17 percent.

#4 The unemployment rate in Spain has set a new all-time record of 27 percent. Even during the Great Depression of the 1930s the United States never had unemployment that high.

#5 The unemployment rate among those under the age of 25 in Spain is an astounding 57.2 percent.

#6 The unemployment rate in Greece has set a new all-time record of 27.2 percent. Even during the Great Depression of the 1930s the United States never had unemployment that high.

#7 The unemployment rate among those under the age of 25 in Greece is a whopping 59.3 percent.

#8 French car sales in March were 16 percent lower than they were one year earlier.

#9 German car sales in March were 17 percent lower than they were one year earlier.

#10 In the Netherlands, consumer debt is now up to about 250 percent of available income.

#11 Industrial production in Italy has fallen by an astounding 25 percent over the past five years.

#12 The number of Spanish firms filing for bankruptcy is 45 percent higher than it was a year ago.

#13 Since 2007, the value of non-performing loans in Europe has increased by 150 percent.

#14 Bank withdrawals in Cyprus during the month of March were double what they were in February even though the banks were closed for half the month.

#15 Due to an absolutely crippling housing crash, there are approximately 3 million vacant homes in Spain today.

#16 Things have gotten so bad in Spain that entire apartment buildings are being overwhelmed by squatters…

A 285-unit apartment complex in Parla, less than half an hour’s drive from Madrid, should be an ideal target for investors seeking cheap property in Spain. Unfortunately, two thirds of the building generates zero revenue because it’s overrun by squatters.

“This is happening all over the country,” said Jose Maria Fraile, the town’s mayor, who estimates only 100 apartments in the block built for the council have rental contracts, and not all of those tenants are paying either. “People lost their jobs, they can’t pay mortgages or rent so they lost their homes and this has produced a tide of squatters.”

#17 As I wrote about the other day, child hunger has become so rampant in Greece that teachers are reporting that hungry children are begging their classmates for food.

#18 The debt to GDP ratio in Italy is now up to 136 percent.

#19 25 percent of all banking assets in the UK are in banks that are leveraged at least 40 to 1.

#20 German banking giant Deutsche Bank has more than 55 trillion euros (which is more than 72 trillion dollars) of exposure to derivatives. But the GDP of Germany for an entire year is only about 2.7 trillion euros.

Yes, U.S. stocks have been doing great so far this year, but the truth is that the stock market has become completely and totally divorced from economic reality. When it does catch up with the economic fundamentals, it will probably happen very rapidly like we saw back in 2008.

Our politicians can try to kick the can down the road for as long as they can, but at some point the consequences of our foolish decisions will hunt us down and overtake us. The following is what Peter Schiff had to say about this coming crisis the other day…

“The crisis is imminent,” Schiff said. “I don’t think Obama is going to finish his second term without the bottom dropping out. And stock market investors are oblivious to the problems.”

“We’re broke, Schiff added. “We owe trillions. Look at our budget deficit; look at the debt to GDP ratio, the unfunded liabilities. If we were in the Eurozone, they would kick us out.”

Schiff points out that the market gains experienced recently, with the Dow first topping 14,000 on its way to setting record highs, are giving investors a false sense of security.

“It’s not that the stock market is gaining value… it’s that our money is losing value. And so if you have a debased currency… a devalued currency, the price of everything goes up. Stocks are no exception,” he said.

“The Fed knows that the U.S. economy is not recovering,” he noted. “It simply is being kept from collapse by artificially low interest rates and quantitative easing. As that support goes, the economy will implode.”

So please don’t think that we are any different from Europe.

If the United States government started only spending the money that it brings in, we would descend into an economic depression tomorrow.

The only way that we can continue to live out the economic fantasy that we see all around us is by financially abusing our children and our grandchildren.

The U.S. economy has become a miserable junkie that is completely and totally addicted to reckless money printing and gigantic mountains of debt.

If we stop printing money and going into unprecedented amounts of debt we are finished.

If we continue printing money and going into unprecedented amounts of debt we are finished.

Either way, this is all going to end very, very badly.

Child Hunger Is Exploding In Greece – And 14 Signs That It Is Starting To Happen In America Too

April 24, 2013 by Michael

The world is heading into a horrific economic nightmare, and an inordinate amount of the suffering is going to fall on innocent children. If you want to get an idea of what America is going to look like in the not too distant future, just check out what is happening in Greece. At this point, Greece is experiencing a full-blown economic depression. As I have written about previously, the unemployment rate in Greece has now risen to 27 percent, which is much higher than the peak unemployment rate that the U.S. economy experienced during the Great Depression of the 1930s. And as you will read about below, child hunger is absolutely exploding in Greece right now. Some families are literally trying to survive on pasta and ketchup. But don’t think for a moment that it can’t happen here. Sadly, the truth is that child hunger is already rising very rapidly in our poverty-stricken cities. Never before have we had so many Americans unable to take care of themselves. Food stamp enrollment and child homelessness have soared to brand new all-time records, and there are actually thousands of Americans that are so poor that they live in tunnels underneath our cities. But for millions of other Americans, the suffering is not quite so dramatic. Instead, they just watch their hopes and their dreams slowly slip away as they struggle to find a way to make it from month to month. There are millions of parents that lead lives that are filled with constant stress and anxiety as they try to figure out how to provide the basics for their children. How do you tell a child that you can’t give them any dinner even though you have been trying as hard as you can? What many families go through on a regular basis is absolutely heartbreaking. Unfortunately, more poor families slip through the cracks with each passing day, and these are supposedly times in which we are experiencing an “economic recovery”. So what are things going to look like when the next major economic downturn strikes?

A recent New York Times article detailed the horrifying child hunger that we are witnessing in Greece right now. At some schools there are reports of children actually begging for food from their classmates…

As an elementary school principal, Leonidas Nikas is used to seeing children play, laugh and dream about the future. But recently he has seen something altogether different, something he thought was impossible in Greece: children picking through school trash cans for food; needy youngsters asking playmates for leftovers; and an 11-year-old boy, Pantelis Petrakis, bent over with hunger pains.

“He had eaten almost nothing at home,” Mr. Nikas said, sitting in his cramped school office near the port of Piraeus, a working-class suburb of Athens, as the sound of a jump rope skittered across the playground. He confronted Pantelis’s parents, who were ashamed and embarrassed but admitted that they had not been able to find work for months. Their savings were gone, and they were living on rations of pasta and ketchup.

Could you imagine that happening to your children or your grandchildren?

Don’t think that it can’t happen. Just a few years ago the Greek middle class was vibrant and thriving.

And we are starting to see hunger explode in other European countries as well. For example, in the UK the number of people receiving emergency food rations has increased by 170 percent over the past year.

This is one of the reasons why I get upset when people say that “things are getting better”. Yes, the stock market has been setting record highs lately, but things are most definitely not getting better.

Even during this false bubble of debt-fueled economic stability that we are enjoying right now, we continue to see hunger and poverty rise dramatically in America.

Since Barack Obama has been president, the number of Americans on food stamps has grown from 32 million to more than 47 million.

Will we all be on food stamps eventually?

Will we all become dependent on the government for our survival at some point?

According to the Boston Herald, even Tamerlan Tsarnaev was receiving government welfare benefits…

Marathon bombings mastermind Tamerlan Tsarnaev was living on taxpayer-funded state welfare benefits even as he was delving deep into the world of radical anti-American Islamism, the Herald has learned.

State officials confirmed last night that Tsarnaev, slain in a raging gun battle with police last Friday, was receiving benefits along with his wife, Katherine Russell Tsarnaev, and their 3-year-old daughter. The state’s Executive Office of Health and Human Services said those benefits ended in 2012 when the couple stopped meeting income eligibility limits.

Isn’t that crazy?

And yes, there are some people out there that are abusing the system. In fact, the cost of food stamp fraud has risen sharply to approximately $750 million in recent years.

But most of the people on these programs really need the help. Thanks to our incredibly foolish economic policies, there are not enough good jobs for everyone and there never will be again. The percentage of Americans that are unable to take care of themselves is going to continue to rise, and the suffering that we are witnessing right now is going to get much, much worse.

Not that things aren’t really, really bad already. Here are some signs that child hunger in America has already started to explode…

#1 Today, approximately 17 million children in the United States are facing food insecurity. In other words, that means that “one in four children in the country is living without consistent access to enough nutritious food to live a healthy life.”

#2 We are told that we live in the “wealthiest nation” on the planet, and yet more than one out of every four children in the United States is enrolled in the food stamp program.

#3 The average food stamp benefit breaks down to approximately $4 per person per day.

#4 It is being projected that approximately 50 percent of all U.S. children will be on food stamps before they reach the age of 18.

#5 It may be hard to believe, but approximately 57 percent of all children in the United States are currently living in homes that are either considered to be either “low income” or impoverished.

#6 The number of children living on $2.00 a day or less in the United States has grown to 2.8 million. That number has increased by 130 percent since 1996.

#7 According to Feeding America, “households with children reported food insecurity at a significantly higher rate than those without children, 20.6 percent compared to 12.2 percent”.

#8 According to a Feeding America hunger study, more than 37 million Americans are now being served by food pantries and soup kitchens.

#9 For the first time ever, more than a million public school students in the United States are homeless. That number has risen by 57 percent since the 2006-2007 school year.

#10 Approximately 20 million U.S. children rely on school meal programs to keep from going hungry.

#11 One university study estimates that child poverty costs the U.S. economy 500 billion dollars each year.

#12 In Miami, 45 percent of all children are living in poverty.

#13 In Cleveland, more than 50 percent of all children are living in poverty.

#14 According to a recently released report, 60 percent of all children in the city of Detroit are living in poverty.

For many more facts about the dramatic explosion of poverty in this country, please see my previous article entitled “21 Statistics About The Explosive Growth Of Poverty In America That Everyone Should Know“.

Unfortunately, most of the time statistics don’t really tell the whole story. Numbers alone cannot really communicate the soul-crushing despair that millions of American families are enduring on a daily basis at this point.

How can numbers communicate the pain that a child feels when her grandmother does not eat because there is not enough food for everyone in the family? But this is what some families in America actually go through because there is not enough money…

Vanyshia tells about the sacrifices her Grandmother makes so that she and her siblings can eat. “Sometimes my Grandma can’t even eat because she has to feed me and my brother and sister. Sometimes I don’t eat as much as I want to because I leave some for my Grandma because I don’t want her to sit there and starve. Sometimes she doesn’t have enough money to buy food, so she has to go to the bank and borrow money. It makes me feel sad. I don’t want her to be hungry. I just feel sad sometimes,” says Vanyshia.

Things can be particularly tough when you are a single parent. The BBC recently profiled a single mother that is struggling to raise two young children in Iowa…

“We don’t get three meals a day like breakfast, lunch and then dinner,” says Kaylie. “When I feel hungry I feel sad and droopy.”

Kaylie and Tyler live with their mother Barbara, who used to work in a factory. After losing her job, she was entitled to unemployment benefit and food stamps – this comes to $1,480 (£974) a month.

But they were no longer able to afford to live in their house, which along with bills cost $1,326 (£873) a month, leaving little for food or petrol.

Kaylie supplemented their income by collecting cans along the railway track near their old home – earning between two and five cents per can.

For more examples like this one, I encourage everyone to go watch a recent BBC documentary entitled “America’s Poor Kids” that you can see right here.

I wonder why we don’t see more stuff like this on the mainstream news in this country?

Could it be that the mainstream media does not want to admit how bad things have really gotten?

All of this is also a reminder that we need to be generous to those in need. Times are going to get much, much harder than this, and we are all going to need one another.

So do you have any stories of poverty or child hunger from your area of the country to share? Please feel free to share your thoughts by posting a comment below…

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