Europe sleepwalking to economic disaster, say experts

This sounds interesting and frankly a little disturbing to put it mildly...

thejournal.ie

THE EU IS sleepwalking to economic disaster and the Euro is doomed with “incalculable economic losses and human suffering” according to an extraordinary new report by a leading group of economists.

“”We believe that …Europe is sleepwalking toward a disaster of incalculable proportions. The sense of a never-ending crisis, with one domino falling after another, must be reversed,” the Institute for New Economic Thinking, which is backed by veteran investor George Soros, said.

Two members of Germany’s Council of Economic Experts and leading euro specialists at the London School of Economics were among the experts who c0-authored the report.

Among their recommendations, they urged an early, temporary mutualisation of debt, which Germany has ruled out, and for the European Central Bank to become a lender of last resort in the longer term.

“A successful crisis response must be collective and embody some burden sharing across countries. Absent this collective constructive response, the euro will disintegrate.”

So is this...

Europe is sleepwalking towards imminent disaster, warn top economists

The euro has completely broken down as a workable system and faces collapse with “incalculable economic losses and human suffering” unless there is a drastic change of course, according to a group of leading economists.

Europe is “sleepwalking towards disaster”, according to the 17 experts, who warned that over the past few weeks “the situation in the debtor countries has deteriorated dramatically”.

“The sense of a neverending crisis, with one domino falling after another, must be reversed. The last domino, Spain, is days away from a liquidity crisis,” said the economists. They include two members of Germany’s Council of Economic Experts and leading euro specialists at the London of School of Economics, all euro supporters.

“This dramatic situation is the result of a eurozone system which, as currently constructed, is thoroughly broken. The cause is a systemic failure. It is the responsibility of all European nations that were parties to its flawed design, construction and implementation to contribute to a solution. Absent this collective response, the euro will disintegrate,” they added in a co-signed report for the Institute for New Economic Thinking.

The warning came as contagion from Spain pushed Italy’s borrowing costs to danger levels, with two-year yields rocketing 40 basis points to more than 5pc. The Milan bourse tumbled 3pc, led by bank shares. Italian equities have been in freefall since it became clear two weeks ago that the EU’s June summit deal had failed to break the nexus between crippled banks and sovereign states.

The crisis is starting to ricochet back into Germany, where the PMI manufacturing index for July fell to its lowest since mid-2009. Doubts are emerging about the creditworthiness of the German state itself.

And this!


Euro crisis brings world to brink of depression
Commentary: Parallels to 1930s’ missteps unmistakable

Europe is a tinderbox waiting for a spark.

The financial volatility in Europe may have created a situation that is now beyond the capacity of policy makers to control or curb.

When an accomplished fixer like Pascal Lamy, the head of the World Trade Organization and the longtime chief of staff for former European Commission President Jacques Delors, describes the situation in Europe as “difficult, very difficult, very difficult, very difficult,” you know it is time to run for cover.

The crisis has now gone well beyond the prospect of breaking up the euro to the threat of a full-fledged financial and economic collapse in Europe that could plunge the world into a second Great Depression.

Few Americans are aware that a worldwide banking crisis started by cascading bank failures in Austria and Germany was one of the major causes of that earlier Depression.

It was in the summer of 1931 that the collapse of Creditanstalt in Vienna forced one of Germany’s big banks, Danatbank, to fail, leading to a credit crisis that prompted bank holidays around the world and exacerbating an already severe economic crisis.

The spark in the current crisis could come from a bank failure, and not necessarily in Spain. It could be a bank in Italy — or Austria, or Germany. German banks are notoriously undercapitalized and poorly supervised and have created a number of mini-crises in the past few decades since the collapse of the Herstatt Bank in 1974.

The situation has deteriorated since Lindner hoped in vain for some enlightenment on the German side. Instead, German Chancellor Angela Merkel and Bundesbank President Jens Weidmann have held to the prescription Lindner saw leading to disaster: “Germany and the German central bankers demand drastic austerity and only give piecemeal and insufficient help in return — too little, too late.”

The latest austerity measures in Spain, approved by the national Parliament last week even as the economy continues to contract, has led to new riots in the streets, pushing the yields on Spanish bonds above the 7% level deemed manageable, and increasing the likelihood of contagion to Italy.

Meanwhile, German Economics Minister Philipp Roesler whistles in the wind, saying the possibility of a Greek exit from the euro has “lost its horror,” and German Finance Minister Wolfgang Schaueble says Greece must try harder to meet its austerity commitments.

The problem, meine Herren, is not poor little Greece, long since written off by a smug German officialdom. The problem is the growing possibility of defaults in Spain and Italy that will lead to bank failures across the continent and incalculable consequences.

Originally posted by surrealist

Among their recommendations, they urged an early, temporary mutualisation of debt, which Germany has ruled out, and for the European Central Bank to become a lender of last resort in the longer term.

The crisis is starting to ricochet back into Germany, where the PMI manufacturing index for July fell to its lowest since mid-2009. Doubts are emerging about the creditworthiness of the German state itself.

Hmmm...so although the whole system has been in crisis for quite some time, now that it is about to hit Germany it has become an actual crisis. Which of course is right, Germany has an economy supported by industry and manufacturing...the other countries that have been hit up until now don't, unless tourism counts All the bailing out that has been done up until this point has been to keep Germany and the other manufacturing countries from being unduly effected. But long term, any economist surely should have been able to tell them when this all started, that the PMI was going to be effected sooner or later.

Seems to me that this report is stating the obvious...no actual news other than that Germany is getting ready to justify whatever it is that they plan to do next...the real news will be whatever it is that Germany plan to do to improve their 'creditworthiness'. I suspect that we are being 'prepped'.

Also, doesn't the use of 'ricochet back ' seem a little strange...doesn't that imply that they fired the shot...

2012?

Well, let's see :

-there is a bad drought ALL OVER the world, and this is a fact,
-Syria is #ed up.The chance to spill over and push the oil price sky high is very possible.
-the Olympics and the real posibillity for a false-flag or real terror attack.
-Europe is going down...fast.


What can be worse than a world war mixed with a great depression and one of the worst drioughts?