Europe in Recession

Europe is in recession.

A few links for evidentiary articles:

Jan 22, 2012 - Lost decade of growth for the West
www.reuters.com...

Although the United States has shown encouraging signs in recent weeks, the economy remains far too feeble for any upturn to be either strong or sustained. Europe is no better off and already appears to have fallen back into a mild recession.

Jan 20, 2012 - Doll, Hyman: Europe in Recession But U.S. Economy Will Surprise to Upside
www.stateofthemarkets.com...

“Europe for sure is in a recession in many parts [and] Asia is still slowing down in lots of places,” as well, the long time member of Wealth Track’s brain trust and overseer of BlackRock’s three highly regarded Core, Value and Growth mutual funds, said.

Jan 20, 2012 - Recession fears after Australia's job losses the worst in 20 years
www.couriermail.com.au...

The figures mean the Australian economy now finds itself at the crossroads, spooked by a jobs crisis not seen since Paul Keating's "recession we had to have".
...
Speaking just a day after the World Bank slashed growth forecasts and warned of a recession worse than 2008, he cautioned Australia was "not immune".

Jan 19, 2012 - Merrill CIO: Europe Headed for Recession, U.S. Slowdown Later in 2012
www.advisorone.com...

Europe is headed for recession, and markets in the Unites States will experience a solid first half of the year before a significant cool-off.
...
Merrill Lynch clearly believes recession is imminent in Europe, which will necessitate rate-cutting by central banks. As to the 2012 outlook in the United States, Wolfe finds it “more of a cloudy mix.”

Jan 18, 2012 - World Bank Warns of Chaos From New Financial Crisis Worse Than 2008
community.nasdaq.com...

The World Bank warned nations Wednesday to brace for chaos as a new global financial crisis worse than 2008 looms. To indicate how bad the situation would be, the bank slashed its previous 2012 growth forecast for high-income countries.
...
An Australian economist, Chris Richardson, director of Deloitte Access Economics, said that if the World Bank's forecast comes to pass, there will be more jobless Australians, company profits will be hit sharply and the country's economy will slow down even it escapes successive quarters of gross domestic product negative growth thanks to the booming resources sector.

To cover the 2008 crisis, the US, Europe has 'printed' money to where there are doubts on our ability to pay off the accrued debt. Now Europe, Austrailia, and probably in second half 2012, the US will enter yet again into recession. Already the US Debt has passed 100% of GDP.

If in the 2012 phase of the 2008 recession nations need to go further into debt, what's the outlook for paying off that debt?

The Fed began running out of bullets after the 2008 recession. Say the 2012 phase does become worse, if for example Greece exits the Euro since SWIFT and other banks are already preparing for the return of old currencies.

What ammo does the Fed have left for dealing with another round which can actually be worse than the 2008 crisis?

reply to post by Dbriefed

What ammo does the Fed have left for dealing with another round which can actually be worse than the 2008 crisis?

Inflation .... lots ... and lots... of inflation.

Without Government spending increases the GDP drop negative. Take away Government spending in the past 12 months and our GDP growth has been negative.

So if we slide into a recession the Government response will have to be increased spending. It doesn't HAVE to be in debt either.... they can simply create funds from nothing if necessary.. it all depends on the amount of inflation needed. If inflation is needed severely, they will generate the funds instead of "borrowing" from themselves, generating several times more inflation.

Australia is not in recession but there has been a sudden sound of alarms the past couple of weeks that I haven't seen hit the headlines for quite some time. Australia was pretty much yawning throughout 2011, except toward the end of the year, but now the outlook has worsened and the jobs market is deteriorating. If China starts sinking then Australia is in deep poo poo. Our economy is largely buoyed by the minerals boom, China being our main buyer of our earth's resources. It's gonna get interesting here. One good thing for me, is interest rates are coming down which is a flamin' relief on my over-indebted situation.

reply to post by surrealist


I agree with you about Australia's economy - they have a massive housing and debt bubble, similar to the US 6 years ago. Steve Keen is an Australian economist who's been sounding the alarm on this for years now. If China has a hard landing, causing commodities demand & prices to drop, that will hurt Australia and act as a catalyst to pop their bubbles.