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Page added on January 10, 2014
If You Are Waiting For An “Economic Collapse”, Just Look At What Is Happening To Europe
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.
34 Comments on "If You Are Waiting For An “Economic Collapse”, Just Look At What Is Happening To Europe"
Makati1 on Fri, 10th Jan 2014 1:47 am
“Extend and pretend” has covered the whole Western world these days. If “Denial” is the key word for the beginning of the 21st century, then “collapse” will surly soon follow. “Reset” fits in there also, but not anywhere near the current levels of resource use.
Think … African levels.
Stilgar Wilcox on Fri, 10th Jan 2014 2:03 am
Those unfortunate people in the EU just need some good news to cheer them up. Maybe if they read the other peakoil.com article about how oil is now exhaustible due to fracking, they would start hiring more people to take advantage of this bonanza of new resources. /sarc (I’m in a sarcastic mood today. Maybe what I need are some techno-cornucopianistic ponitifications on how fusion energy and or fuel cells will rescue BAU.)
Jimmy on Fri, 10th Jan 2014 3:26 am
@wilcox
Check out Tom Whipple on FCNP. He’s shilling Rossi and his magic never ending porridge pot again.
Whipple says he’s an ex CIA analyst. I submit that his ‘analysis’ is flawed. The guy is a shill.
http://fcnp.com/2014/01/07/the-peak-oil-crisis-cold-fusion-moves-east/
GregT on Fri, 10th Jan 2014 5:40 am
The 10,000 lb elephant in the room, is overpopulation. Alternate energy sources, promoting any semblance of BAU, will do nothing more, than feed the elephant.
Northwest Resident on Fri, 10th Jan 2014 5:50 am
So which is it going to be to bring on the apocalypse — Europe or China? Or was it one of the Middle East countries? They’re all going down the tubes so fast, its getting hard to keep track.
Stilgar Wilcox on Fri, 10th Jan 2014 5:56 am
correction: change exhaustible to inexhaustible.
Thanks for the link Jimmy. Didn’t know Tom Whipple was ex-cia. Sounds like another techno-savior is out the door. next!
GregT on Fri, 10th Jan 2014 6:25 am
Northwest,
China?
Beery on Fri, 10th Jan 2014 7:28 am
“The unemployment rate in the eurozone as a whole is still sitting at an all-time record high of 12.1 percent.”
…and if the US government measured unemployment levels at all honestly, we would be right there alongside Europe. The “economic nightmare” is worldwide, but only those without work are seeing it right now. That might remain the case too – after all, in the Great Depression, 75% of workers managed to stay in work.
If Americans are patting themselves on the back, looking patronizingly at Europe and thinking that it can’t happen here, they have another think coming.
Arthur on Fri, 10th Jan 2014 8:51 am
OMG, the “Economic Collapse Blog” desperately looking for economic collapse. Now it is Europe. Well, I am living there and I can assure you that, apart from Greece, everything is more or less BAU. Holland for instance is gradually climbing out of the crisis again, with housing prices rising again. Germany is booming.
As usual, foreigners are pointing at the high government debt in Italy, but if you want to judge Italy, you should look at the complete picture and observe the amazing fact that the average Italian HAS NO DEBT! Not even a mortgage!!! Here is the real picture:
http://deepresource.wordpress.com/2012/12/11/the-real-state-of-western-finances/
(graph at the top)
Italy is financially by far the strongest and most stable country of the western world. Usual suspect Germany is doing fine as well. In both cases no real cuts are necessary. France is not too bad either. Britain and Holland are in the danger zone, but the real basket cases of the western world are the US, Ireland and Greece. Greece has endured a decrease in buying power of 40% over the last five years. This would have happened to the US as well, if there had not been the dollar reserve currency, masking the real state of US financial affairs. But the rest of the world is very much aware that the dollar represents an empty IOY and is attempting to break away from the greenback. Then the global Great Financial Reset is next and the US per capita income will likely slide with ca. 40% as well.
Arthur on Fri, 10th Jan 2014 8:57 am
I am sorry, I mixed up Greece with Luxemburg. In fact the US is in far worse shape than Greece. Don’t believe me, here is Ben Bernanke pall and member of the US elite Laurence Kotlikoff saying that in fact the US is in worse shape than Greece:
http://www.youtube.com/watch?v=GFdYT8OI6b0
Don’t worry about Europe. The coming crash will start in the US, like in 2008, and nowhere else. But implicating the rest of the world as well, like it did in 2008.
J-Gav on Fri, 10th Jan 2014 9:30 am
No doubt the next, inevitable, economic crash will rock the world. The questions that go along with that obvious conclusion are hard to answer though: 1 – When?; 2 – Will it be accompanied by war, nation-shattering social collapse, etc?
Makati1 on Fri, 10th Jan 2014 9:58 am
Europe is on its way to financial catastrophe … and all the denials by Europeans will not change it’s direction. It is only a matter of time until all those squabbling tribes are set loose on each other again. Wait and see.
Makati1 on Fri, 10th Jan 2014 10:02 am
J-Gav, war has always been the way out when nations are failing. And this is no exception. It is only a question, as you said, of when and who starts it. We live in exciting times and we appear to be in the last act of this play. The fat lady is spraying her throat and waiting in the wing’s for her cue.
Meld on Fri, 10th Jan 2014 12:49 pm
I don’t know what country Arthur is in but it’s quiet apparent here in the UK that “growth” for all intents and purposes has stopped, petrol prices are very high, food prices are very high, the public sector is cutting everywhere and the private sector is hanging on by it’s finger nails by having pre Christmas sales. Peak oil hit, we are on the plateau, next comes the decline that no amount of solar panels or windfarms is going to prevent.
Quite how Arthur can say everything in Europe is fine with
Spanish youth unemployment at 56%
Greek youth unremployment at 55% (was at 65% until someone at the statistics bereau found a new way to fiddle the numbers)
Italy Youth at 40%
Everything sounds fine to me.
mike on Fri, 10th Jan 2014 3:30 pm
Italy is financially by far the strongest and most stable country of the western world – Arthur
Penso che fa’ scherzare Arturo, compagno mio ollandese. Non sono d’accordo. In Italia e sempre la famighia a casa, corruzione al commercio, e abuso d’ufficio al amministrazione. Sono Italiano, ma abito in Inghilterra, e posso sentire bene la fraudolenza in Italia e l’onesta in Inghilterra. La disoccupazione a Palermo o Milano sta vando doppio a Londra o Birmingham. Sta’ stognando i sogni d’un scemo, Arturo.
Kenz300 on Fri, 10th Jan 2014 5:25 pm
People that can not provide for themselves can not provide for a child. So why do they continue to have more children?
Access to family planning services needs to be available to all that want it.
Alexander on Fri, 10th Jan 2014 5:55 pm
To translate, and paraphrase, Mike’s comment: He’s not in agreement with Arthur’s claim. Mike lives in England but he hears reports of how bad things are in Italy. The unemployment rate in Palermo and Milan is double than that of London or Birmingham.
Northwest Resident on Fri, 10th Jan 2014 6:12 pm
“…Italy (a decrepit republic if there ever was one) ended a tumultuous 2013 with “pitchfork protests” in the streets of its cities. Again as in Spain , Italy is plagued by incessant corruption, social unrest, and is seeing it institutions systematically undermined (due to criminal syndicates) at the expense of the democratic process. Witness the rise in Italy of demagogues, or clownish populists and rising xenophobia. Anti –politicians over there, are taking advantage of the rage against Rome and Brussels (the imperial HQ of the EU).”
http://www.globalresearch.ca/historical-powder-keg-is-2014-going-be-a-1914-redux-for-europe-and-the-world/5364428
Paul on Fri, 10th Jan 2014 6:17 pm
I live in Valencia (Spain) and all of this is true.
I have no job and people are so desperate to find a new one, than they even work for free (yes!, it’s very common here to see people working for free! 10 hours a day) in order to adquire experience to add to the curriculum vitae with the hope than in the future they could find a very bad paid job.
Today 10 January 2014, it’s 100000 (one hundred thousand!) people that have applied to the Ikea shop 400 jobs. And the Valencia city has 800000 inhabitants, so 1 in every 8 people of this huge city have applied for this job! This is crazy! There is a lot of political corruption everywhere, a lot of people sleeping on the street, people eating what they find in garbage, etc. I think i should emigrate, because here the situation is desperate.
paul1689 on Fri, 10th Jan 2014 6:44 pm
I live in Valencia (Spain) and all of this is true.
I have no job and people are so desperate to find a new one, than they even work for free (yes!, it’s very common here to see people working for free! 10 hours a day) in order to adquire experience to ad to the curriculum vitae with the hope than in the future they could find a very bad paid one. Today 10 January 2014, it’s 100000 (one hundred thousand!) people that have applied to the Ikea shop 400 jobs. And the Valencia city has 800000 inhabitants, so 1 in every 8 people of this huge city have applied for this job! There is a lot of political corruption everywhere, a lot of people sleeping on the street, people eating what they find in garbage, etc. I think i should emigrate, because here the situation is desperate.
Twin Performance on Fri, 10th Jan 2014 6:53 pm
Why not print more money, got a debt problem, print away. Our politicians and Bankers have us on the correct path. Print here, debt there. Oil gone up to 200,,, no 300 dollars a barrel, we will just print more dollars. You guys are so 🙁
Arthur on Fri, 10th Jan 2014 7:27 pm
I did not say everything in Europe is fine, just reject the idea of immanent ‘collapse’, as the title suggests. About corruption and unrest in southern countries… That’s not something of the last few years, in fact since 1968, in the seventies and eighties the French protested much more than today. Sure the Italians are corrupt or libertarian or both, since they prefer to pay off their mortage rather than paying taxes, resulting in high government and low private debt.
Kenz300 on Fri, 10th Jan 2014 7:32 pm
How many problems are made worse by unsustainable population growth.
Food crisis, water crisis, unemployment crisis, declining fish stocks crisis, Climate Change crisis are all made harder to solve with the pressures from endless population growth.
GregT on Fri, 10th Jan 2014 7:33 pm
The collapse is already well underway, it may seem like it is taking a long time, but in historical measures, a couple of decades is a mere blip in time.
Arthur on Fri, 10th Jan 2014 7:42 pm
http://en.wikipedia.org/wiki/List_of_sovereign_states_in_Europe_by_unemployment_rate
Unemployment in EU countries in general is below 10%, ignoring dat in 2014 most work is done by machines. Unemployment in Spain has always been ca. 20% as long as I can remember.
Greece owes all it’s trouble to itself, due to reckless lending practices after it became a nember of the euro. In fact it is a sign of the strength of the EU political system that it can impose very harsh measures on Greece without that country exploding. On the contrary, the Greeks are desperate to remain in the euro area.
robertinget on Fri, 10th Jan 2014 7:54 pm
Paul1689, Come to America, if you can manage it.You English is just fine. If you prefer a Spanish speaking nation,
take a good look at Argentina. Educated bilinguals are in strong demand.
robertinget on Fri, 10th Jan 2014 8:13 pm
This century, certainly the first half, belongs to China and South Korea. The trick for Europeans will be to position themselves in a sector that takes advantage of this fairly safe prediction.
Its been pointed out a dozen times the US,still the world’s largest economy, owes a slow but sure recovery to several important factors; perhaps the three most important, USD as reserve currency,
the technology that brought us instant connectivity, affordable natural gas and oil.
paul1689 on Fri, 10th Jan 2014 9:29 pm
Arthur, now the unemployment rate in Spain is 26.7 %, and in some places of my country, it is more than 40 %.
Unemployment rate for young people up to 26 years old is 57.6 %.
paul1689 on Fri, 10th Jan 2014 9:35 pm
robertinget, I am an experienced physicist and I think my future is in the USA. I hope soon I will make my dream come true
GregT on Fri, 10th Jan 2014 9:50 pm
robert,
You forgot Bernanke’s ZIRP, as well as TARP, TALF, QE1, QE2, Twist, and QE3. Not to mention CDSs, and close to 600 trillion in OTC derivatives.
Makati1 on Sat, 11th Jan 2014 8:23 am
Arthur:
http://www.mining.com/coal-use-in-germany-the-highest-in-24-years-48776/
http://www.bloomberg.com/news/2014-01-07/richest-danes-face-benefit-cuts-as-universal-welfare-abandoned.html
And on and on …
Beery on Sat, 11th Jan 2014 8:24 am
Robertinget, why on Earth would anyone want to move to America from Europe? The Europeans, at least, have done SOMETHING to ensure that the crash, when it comes, will affect them less harshly – they’ve taxed gasoline, fed state money into infrastructure upkeep, ensured that a robust social safety net exists, etc. The Americans have done nothing whatsoever – gasoline is still being subsidized, infrastructure is crumbling and there’s no social safety net whatsoever. When the crash comes, Europeans, wherever they are, will be much better-off than Americans.
Arthur on Sat, 11th Jan 2014 11:06 am
This is about the first time I agree with Beery.
So mike is not a ‘Hillbilly’, nor a Brit, but an Italian, who decided to leave the most beautiful and underestimated country in the world with the best food, for a rainy existence in the Midlands and enjoying the lack of corruption of the north. Well, good for you, but you did not debunk the statements I made about the financial state of affairs concerning Italy. The unemployment rate in Palermo has little to do with the fact that Italy has almost zero private debt.
Arthur on Sat, 11th Jan 2014 11:26 am
http://www.directionsmag.com/images/newsletter/2011/03_week4/GfK_purchasing_power_Europe_2010_lg.jpg
Here a recent map showing where the wealth is in Europe: a corridor ranging from London, Brussels, Paris, southern Germany, northern Italy (ignoring short-lived Norwegian oil wealth and fraudulent Swiss black money banking sector).