Posted on 05/02/2012 5:59:23 AM PDT by Oldeconomybuyer
Europe is in recession. Portugal, Italy and Greece are basket cases. The British and Spanish economies have contracted for the last two quarters. It seems highly likely that France and Germany are in a double dip as well.
Why should we care? Because a recession in the world's third-largest economy (Europe) combined with the current slowdown in the world's second-largest (China), spells trouble for the world's largest (that's still us).
Don't blame Europe's problems on its so-called "debt crisis." There was no debt crisis in Britain, for example, which is now experiencing its first double-dip recession since the 1970s.
Blame it on austerity economics -- the bizarre view that economic slowdowns result from excessive debt, so government should cut spending.
In their haste to cut the public debt, Europeans forgot the denominator of the equation. By reducing public spending, they removed a critical source of demand at a time when consumers and the private sector are still in the gravitational pull of the Great Recession. The resulting slowdown is worsening the ratio of Europe's debt to its total GDP.
A large debt with faster growth is preferable to a smaller debt sitting atop no growth at all. And it's infinitely better than a smaller debt on top of a contracting economy.
(Excerpt) Read more at baltimoresun.com ...
Bill Whittle declares BEST SENTENCE EVER: "Love of Theory is the Root of All Evil"
A must see, as is ALL of his commentary!
Also, the power shift in manufacturing from the US to Asia ensures that any mop up afterwards will be painful and slow.
Also, the power shift in manufacturing from the US to Asia ensures that any mop up afterwards will be painful and slow.
Also, the power shift in manufacturing from the US to Asia ensures that any mop up afterwards will be painful and slow.
” Absolutely. The ZIRP Trap, 1-3-5% returns if you are lucky, can’t keep up with the rate of hidden inflation. Dropping asset prices. Wealth disappears; middle class wipe-out.
Also, the power shift in manufacturing from the US to Asia ensures that any mop up afterwards will be painful and slow. “
Correct.
Sorry for the triple-post reply. Lousy connection.
BHeen there : )
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