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Page added on February 15, 2014
20 Signs That The Global Economic Crisis Is Starting To Catch Fire
If you have been waiting for the “global economic crisis” to begin, just open up your eyes and look around. I know that most Americans tend to ignore what happens in the rest of the world because they consider it to be “irrelevant” to their daily lives, but the truth is that the massive economic problems that are currently sweeping across Europe, Asia and South America are going to be affecting all of us here in the U.S. very soon. Sadly, most of the big news organizations in this country seem to be more concerned about the fate of Justin Bieber’s wax statue in Times Square than about the horrible financial nightmare that is gripping emerging markets all over the planet. After a brief period of relative calm, we are beginning to see signs of global financial instability that are unlike anything that we have witnessed since the financial crisis of 2008. As you will see below, the problems are not just isolated to a few countries. This is truly a global phenomenon.
Over the past few years, the Federal Reserve and other global central banks have inflated an unprecedented financial bubble with their reckless money printing. Much of this “hot money” poured into emerging markets all over the world. But now that the Federal Reserve has begun “tapering” quantitative easing, investors are taking this as a sign that the party is ending. Money is being pulled out of emerging markets all over the globe at a staggering pace and this is creating a tremendous amount of financial instability. In addition, the economic problems that have been steadily growing over the past few years in established economies throughout Europe and Asia just continue to escalate. The following are 20 signs that the global economic crisis is starting to catch fire…
#1 The unemployment rate in Greece has hit a brand new record high of 28 percent.
#2 The youth unemployment rate in Greece has hit a brand new record high of 64.1 percent.
#3 The percentage of bad loans in Italy is at an all-time record high.
#4 Italian industrial output declined again in December, and the Italian government is on the verge of collapse.
#5 The number of jobseekers in France has risen for 30 of the last 32 months, and at this point it has climbed to a new all-time record high.
#6 The total number of business failures in France in 2013 was even higher than in any year during the last financial crisis.
#7 It is being projected that housing prices in Spain will fall another 10 to 15 percent as their economic depression deepens.
#8 The economic and political turmoil in Turkey is spinning out of control. The government has resorted to blasting protesters with pepper spray and water cannons in a desperate attempt to restore order.
#9 It is being estimated that the inflation rate in Argentina is now over 40 percent, and the peso is absolutely collapsing.
#10 Gangs of armed bandits are roaming the streets in Venezuela as the economic chaos in that troubled nation continues to escalate.
#11 China appears to be very serious about deleveraging. The deflationary effects of this are going to be felt all over the planet. The following is an excerpt from Ambrose Evans-Pritchard’s recent article entitled “World asleep as China tightens deflationary vice“…
China’s Xi Jinping has cast the die. After weighing up the unappetising choice before him for a year, he has picked the lesser of two poisons.
The balance of evidence is that most powerful Chinese leader since Mao Zedong aims to prick China’s $24 trillion credit bubble early in his 10-year term, rather than putting off the day of reckoning for yet another cycle.
This may be well-advised for China, but the rest of the world seems remarkably nonchalant over the implications.
#12 There was a significant debt default by a coal company in China last Friday…
A high-yield investment product backed by a loan to a debt-ridden coal company failed to repay investors when it matured last Friday, state media reported on Wednesday, in the latest sign of financial stress in China’s shadow bank sector.
#13 Japan’s Nikkei stock index has already fallen by 14 percent so far in 2014. That is a massive decline in just a month and a half.
#14 Ukraine continues to fall apart financially…
The worsening political and economic circumstances in Ukraine has prompted the Fitch Ratings agency to downgrade Ukrainian debt from B to a pre–default level CCC. This is lower than Greece, and Fitch warns of future financial instability.
#15 The unemployment rate in Australia has risen to the highest level in more than 10 years.
#16 The central bank of India is in a panic over the way that Federal Reserve tapering is effecting their financial system.
#17 The effects of Federal Reserve tapering are also being felt in Thailand…
In the wake of the US Federal Reserve tapering, emerging economies with deteriorating macroeconomic figures or visible political instability are being punished by skittish markets. Thailand is drifting towards both these tendencies.
#18 One of Ghana’s most prominent economists says that the economy of Ghana will crash by June if something dramatic is not done.
#19 Yet another banker has mysteriously died during the prime years of his life. That makes five “suspicious banker deaths” in just the past two weeks alone.
#20 The behavior of the U.S. stock market continues to parallel the behavior of the U.S. stock market in 1929.
Yes, things don’t look good right now, but it is important to keep in mind that this is just the beginning.
This is just the leading edge of the next great financial storm.
The next two years (2014 and 2015) are going to represent a major “turning point” for the global economy. By the end of 2015, things are going to look far different than they do today.
None of the problems that caused the last financial crisis have been fixed. Global debt levels have grown by 30 percent since the last financial crisis, and the too big to fail banks in the United States are 37 percent larger than they were back then and their behavior has become even more reckless than before.
As a result, we are going to get to go through another “2008-style crisis”, but I believe that this next wave is going to be even worse than the previous one.
So hold on tight and get ready. We are going to be in for quite a bumpy ride.
17 Comments on "20 Signs That The Global Economic Crisis Is Starting To Catch Fire"
Northwest Resident on Sat, 15th Feb 2014 4:38 pm
I read this article over on ZeroHedge last night. Despite the fact that it comes from The Economic Collapse blog — a site chocked full of BS articles and commenters who are clearly whacked out religious freaks waiting for the end-of-times — this particular article tends to ring true. You can’t deny that the emerging economies are experiencing intense pressures, or that those severe problems in the emerging economies won’t have a drag-down effect on our own brittle economy, or the equally brittle global economy for that matter. I stopped visiting The Economic Collapse blog after reading one too many articles that personally blamed President Obama for plotting the end of American supremacy and purposely implementing his evil plans to destroy the U.S. economy — just too much BS IMO. But still, just because a lunatic happens to be speaking the truth for once doesn’t make that truth any less valid.
MSN — where are you? How’s your “market” doing?
Stilgar Wilcox on Sat, 15th Feb 2014 5:07 pm
Agreed NR. What I find fascinating is taper has had the consequence of deflating EM stock markets, with country’s like India blaming Fed taper for their increasing financial difficulties. If someone 10 years ago had told me the reduction of a desperate move by our Fed to continue BAU in spite of high energy costs would do damage to India’s economy in the near future, I would have been incredulous. But in today’s increasingly pressured global economy, the financial butterfly flapping its wings on Wall Street, agitates people’s pocketbooks on the other side of the planet.
How long will it be before riots by unemployed (but not counted in Federal stats) cleaning out grocery stores in Pennsacola reverberate likewise in New Delhi?
bobinget on Sat, 15th Feb 2014 5:55 pm
NW Resident, your initial intuition was correct.
While the article above “rings true” as it happens, every single point presented represents nothing but scare headlines, IOW’s half truths. Colbert defines such propaganda as “Truthiness”.
I’ll not bother to dispute all 20 ‘points’ but urge anyone here to look deeper into ANY of these allegations.
One needs not read further than our ‘collapse’ blog’s initial bold incrimination:
“Over the past few years, the Federal Reserve and other global central banks have inflated an unprecedented financial bubble with their reckless money printing”
Then, these gold salesmen go on to attribute Japan’s
financial ruin not to Fukushima’s nuclear disaster,
ongoing Pacific Ocean contamination, record breaking oil and gas imports, loss of public confidence to a failure on the part of the US Federal Reserve!
Thailand’s middle class revolt against democratic rule
is blamed on the Fed’s ‘tapering’.
Nor is there a reference to Civil (proxy) oil wars in
Iraq or Syria or Sudan or Yemen or Mali or Afghanistan.
Not a whisper or Israel’s threats of nuclear war to prevent Iran’s semblance of arms parity.
In fairness, no mention of America’s falling balance of payments (and LT debt) because of technological breakthroughs in oil and gas E&P.
No mention of WHY Venezuela’s US oil exports and income is tanking because of Chinese loan servicing.
Finally, while unemployment in Australia is mentioned,
not a word about Climate CHANGE as a basic cause.
Global Warming, not The Fed’s pathetic efforts to do the job of Tea Party infected, Republican dominated
congress never even gets a number on this infamous scare headline list..
Denying GW or over population as major Global Disasters in a top 20 list of ‘reasons’ for collapse should be all one needs to know
about fear mongers in general and gold (PM) marketers.
Genuine journalists are not afraid of losing ‘base’
support reporting truth.
J-Gav on Sat, 15th Feb 2014 6:18 pm
Though this article is obviously to be classified in the ‘scare tactics’ category, points n° 11, 13 and n° 20 are worth a little consideration …
As for the rest, I mean, seriously, can anyone tell me why we should expect Ukraine’s debt rating to be higher than Greece’s? And how many times has Argentina already defaulted without causing more than very limited international repercussions? Etc, etc
Northwest Resident on Sat, 15th Feb 2014 6:19 pm
bobinget — You are correct. When I read that post on ZeroHedge, I thought that it might be reposting in the comments section of one of the articles here on peakoil. Then when I realized the source of that article, I refrained because I suddenly doubted the credibility of the arguments made in the article. The Economic Collapse Blog looks to be in the business of selling survival supplies and gold/silver to the group of suckers they attract with all their hype and fear-mongering and racist “Obama is the anti-Christ” type articles. There is enough solid evidence to support peak oil, financial doom and total economic collapse without having to resort to half-truths and outright lies. But I guess if you’re in the business of selling stuff to suckers, then you give the suckers what they want to hear.
MSN fanboy on Sat, 15th Feb 2014 7:25 pm
Markets doing good NorthWest, just need to keep increasing money printing and threatening the rest of the world to use it. Simple really.
Use the Dollar or the Drobama will kill you. Simple, quick clean and makes sure my suv is filled to the brim 🙂
Economic collapse ROLF who cares about real jobs when we can print money… Whats the WORST that can happen?
Davy, Hermann, MO on Sat, 15th Feb 2014 8:39 pm
Fanboy are you poppin, smokin, or drinkin cause you been soundin goofy today!
peakyeast on Sat, 15th Feb 2014 9:26 pm
Certainly paints another picture that the Danish MSM these day:
Danish media today:
1. Greece has 3x the expected positive profit expected.
2. The crisis is over in EU and the economic boom is just around the corner… As it has been since 2009 when they proclaimed it first.
MSN fanboy on Sat, 15th Feb 2014 9:39 pm
I just read guy McPherson going dark….. depressing. Needs to be more of an optimist. Global warming can be good….
The Nuclear issue though just seems…. bad. I admit.
rockman on Sun, 16th Feb 2014 1:05 am
“If you have been waiting for the “global economic crisis” to begin, just open up your eyes and look around”. Perhaps I define “crisis” differently. Seems like we’ve experienced one crisis after another since my teen days and long before.
Granted the impacts have varied from country to country as well as between different groups within a country. For instance 1986 was a freaking nightmare of a crisis when oil prices fell to about $10/bbl. Yes…crisis for us in the oil patch. Thank Dog we’re doing great today with no crisis on the horizon. Likewise a great time for China: with their huge foreign currency reserve they’ve been able to dominate acquisition of energy resources.
So are we in the beginning throws of a new crisis or the hay day of great times with even better coming? Put a hat on and tell me.
ANGEL XIX on Sun, 16th Feb 2014 2:11 am
1. Overpopulation – the root of ALL evil.
2. Derivatives – 12/12 est. $632 Trillon.
By comparison US GDP is about $16 T. World product about $72 T.
Too big to fail? Nope, just criminally insane.
3. climate change. Look outside. That is real change you can believe in.
4. Wealth gap. The widening difference between Main Street (real value) and
Wall Street (invented value – see #2).
5. Perpetual unemployment. Underemployment is the new “Employment” count.
6. Global Trade. Means sharing third world products – like systemic government corruption.
7. Energy mismanagement. Energy is required. period.
8. Military/security expenditures. Against what threat?
9. NSA/Homeland Security empowerment (Big Brother has always been around. It’s his bonafide legalization that suspends democracy and freedom.)
10. China is too big and is failing. Space dominance may be its only salvation now. Oh, and gold is very useful in space. Lots of gold.
11. Failure in governance. a bipartisan leadership gridlock with no attractive alternatives in sight.
12. Dow at record high yet investable reality not even back to normal. Meaningless paper ownership including falsified futures (see #2).
13. Global efficiencies (the profit squeeze) have stripped past natural redundancies required for emergency survival. Excess food, water, shelter, medicine, land resources, local organization, etc. (see #1).
14. Exhausted population. More shrewd and less committed next gens coming.
15. Disenfranchised scientific experts. Once respected solution providers, too.
16. Religious capitalization.
17. Command and control mistaken for intelligence. In fact it is not and why most brains have more than just one cell in charge.
18. The World theatre is as inspiring as cable TV programming. Who’s responsible? (Idiotic extraterrestials).
19. It takes just as much energy to manage a good life. Why not then? Too complex for those big egos to handle?
20. Don’t panic! Statistically, there is another Earthlike planet around here somewhere.
Makati1 on Sun, 16th Feb 2014 2:41 am
I can tell you that the Exchange rate of the Philippine Peso has gone from around 42 per dollar to 45 per dollar in the last two months. About the time the Fed slowed the printing presses. The Philippines are one of best places to invest in S.E. Asia, with a projected 7% GDP growth in 2014.
Many of you make fun of the 20 points as ‘scare tactics’. Which ‘butterfly’ is the one that will take down the dollar? If you know, you can get wealthy. But you do not. There is no way anyone can totally understand the intricate financial web today. No one.
Not one of the 20 items should be ignored as ‘not relevant’ An avalanche can start with just one extra snowflake. A landslide with just one drop of water more than the soil can hold. Which one of the above 20 could be that snowflake/drop of water?
Danny on Sun, 16th Feb 2014 4:51 am
Rock I suggest you should read Gails post on Our Finite World…..I think we are in trouble but she lays it out in a very succinct way.Danny
Stephen on Sun, 16th Feb 2014 5:35 am
I think we will end up having to repeal rules of losing everything when bankers aren’t repaid in the long run. It may be far easier to survive crises like this if things like land, housing, et al are owned indefinitely by the lower class (as in the bankers cannot force sale on them when debt’s aren’t paid) than trying to force more economic growth than won’t happen. As long as we don’t print more money during a deflation, the more debt that gets written off (and no new debt issued), the stronger the currency will be.
Makati1 on Sun, 16th Feb 2014 11:14 am
But Stephen, housing and land is NOT supposed to be in the hands of the common folk. In much of the world, for the last 2,000 years, the land has been owned by the wealthy (kings, bishops, barons, etc.) That is what they want, not the way it is today. Don’t pay your real estate taxes for a few years or your mortgage, and see who ‘owns’ your home/land. Not you.
Davy, Hermann, MO on Sun, 16th Feb 2014 12:56 pm
Stephan, Makati has a point about ownership. We may see a debt jubilee but actions like this have unintended consequences in a nonlinear complex system and probably would collapse the system. We may not survive a collapsed system. If we have a gentle decent we may find a voluntary move back to the land in sustainable practices as BIG Ag dies. Big Ag needs to die slowly to avoid a big die off if we care about our neighbors. If we don’t care then with luck and big die off a 19 century permaculture might spring up. A feudal serf system may spring up. Yet, in the dark ages the peasants did quite well with the commons and the nobility were few. This was mainly because the economics of nobility was not good. Need allot of EROI to support rich folk. We are throwing darts in the dark if we think we can figure decent out. Decent will be nonlinear with the entropic element of chaos. Rational moves may or may not happen. We will see dysfunctions and paradoxes. Actions that will seem rational but actually will make matters worse. BAU folks holding on to the past digging the hole deeper. This decent will be scientific though just look to system theories in ecosystems. The old Egyptian myth of “Nature enjoys nature and only nature can overcome nature” if valid means we will have to reconnect with that which is natural in the ecosystem sense. This means accepting cycles and stages. BAU is fighting this by looking to endless growth. This struggle is becoming brittle and the resulting complexity is ready to break to a lower level of complexity. This is the nature of evolution and extinction. Nothing special about that, yet, very profound for us in its application.
GregT on Sun, 16th Feb 2014 9:45 pm
MSN fanboy,
McPherson isn’t an optimist or a pessimist, he is an evolutionary biologist. His understanding of the implications of climate change on the adaptability of living organisms, should be ringing alarm bells for us all.
Global warming can only be considered good, if one believes that life on Earth is bad.