Fourteen months have passed since I last warned of a new great depression and in those fourteen months have things gotten any better? No. The situation in Europe has gotten a lot worse. Italy, Spain and Cyprus have joined Greece in needing bailouts. The Americans have not done a thing to reduce their debt, which continues to get worse by the day. The banking industry comes up with scandal after scandal.
Economists, for what it’s worth, which isn’t much, say that Europe is now in recession. Even China’s economy, considered the powerhouse of the world, is slowing.
The only thing that continues to hold up the markets is optimism, optimism that somehow the central banks of the world, particularly those of Europe and the United States, can somehow turn things around. So far all their quantitative easing and twists and printing of money and keeping interest rates low (They don’t have a choice with interest rates.) haven’t worked. Neither have all the meetings of the European leaders to resolve the debt crisis worked. The Germans are growing increasingly tired of sacrificing their economy to save the economies of their weaker neighbors.
It is a given that Greece will formally default on their loans and will leave the Euro Zone. Other European countries, such as Spain, are likely to follow. Once this begins to happen it will trigger an even bigger banking crisis than in 2008 and global economic crisis. As part of this process the Euro will collapse,possibly along with the European Union.
It’s not just me who is warning of this, Elliott Wave International (where I picked this up from), Weiss Research and Comstock Partners, to name a few, are all warning of deflation and depression. They are also all saying we haven’t much time left before this economic crisis happens.
To totally switch gears here, hearty congratulations to Silver Don Cameron for being awarded the Order Of Canada. For anyone not knowing who Silver Don is, he is a great and highly respected writer of long standing. I have nothing but admiration for the quality of his writing skills.