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View Full Version : European union warns of ‘deep prolonged recession’




seraphson
11-10-2011, 01:40 PM
From APMEX: http://ht.ly/1fA1LR


The European Union (EU) has significantly slashed its 2012 growth forecasts for its 17-country euro zone members. In spring, the 2012 growth forecast for the EU was set at 1.8%, but that has been revised down to a worrisome 0.5%. At a fragile growth rate of 0.5%, the euro zone easily could fall back into a depression on matters related to the current debt crisis. In a CNBC interview Tuesday, Sean Egan of Egans-Jones Rating Co. explained the European debt crisis this way: The EU is dealing with $2.5 trillion euros in debt. Even if it were only $1.5 trillion, that is a huge hole to fill, and there are only four ways to fill it:

1. Experience some massive growth in the economy that comes from out of nowhere.

2. Funds are found to fill in the hole. Although not considered likely, perhaps the United States or China could step up and provide the money.

3. Massive defaults by sovereign nations and large banks. This is a worst-case scenario that should be prevented at all costs.

4. Everyone comes clean and admits they cannot pay their debts, so they roll out the printing presses and begin printing huge amounts of cash that they will use to pay their debts.

Gold prices are moving off morning lows, and the U.S. stock futures are positive on the news that Italian bonds have slipped below 7%. Yesterday, the U.S. stock market experienced its biggest sell-off since August. Also helping today’s rebound, initial claims for jobless benefits fell to 390,000 for the week ending Nov. 5. This was better than estimates by analysts polled by Reuters that the number of claims would be 400,000.

Is it me or do these guys have it backwards? My understanding of their logic.

Don't bail out the banks and let them fail = bad
Printing tons of money to pay the debt = good

Don't the failures NEED to happen so this giant farce that is the banks be over with? Also, how the hell is paying off credit cards with more lower value credit cards help at all (my simplified logic on the issue)?

Also, I'm certain #2 and #4 are about the exact same thing (well, with the exception of China).

Seraphim
11-10-2011, 03:25 PM
#3 will happen either implicitly or explicitly.

Acala
11-10-2011, 03:52 PM
Either the ECB will print vast sums of money to fill the hole and inflate the crap out of the Euro, or there will be an outright default of sovereign debt in several Euozone countries. It is likely to be the later because Germany seems to be digging in its heels on the former.

A massive default of European sovereign bonds will trigger massive collapse of highly leveraged US institutions a la MF Global. This could crush some very large institutions and could literally happen in a matter of days.

After that it will be just a matter of time before pensions plans in the US start going under, and the US bond market folds up. Then, ladies and gentlement, boys and girls, it will be a new world full of adventure.

I'm not really a hoarder, being more interested in participating in a post-collapse economy than holing up in a bunker, but I am making and stashing pemmican as fast as I can.

seraphson
11-11-2011, 08:50 AM
Either the ECB will print vast sums of money to fill the hole and inflate the crap out of the Euro, or there will be an outright default of sovereign debt in several Euozone countries. It is likely to be the later because Germany seems to be digging in its heels on the former.

A massive default of European sovereign bonds will trigger massive collapse of highly leveraged US institutions a la MF Global. This could crush some very large institutions and could literally happen in a matter of days.

After that it will be just a matter of time before pensions plans in the US start going under, and the US bond market folds up. Then, ladies and gentlement, boys and girls, it will be a new world full of adventure.

I'm not really a hoarder, being more interested in participating in a post-collapse economy than holing up in a bunker, but I am making and stashing pemmican as fast as I can.

The "new world of adventure" is where my focus is starting to hone in on. The problem is I really don't think even 9/10 of this country hasn't the slightest clue as to the implications and what the real HARD reality of this situation is. In reference to participating the post-collapse economy; PMs? Hrm, maybe I'll try to make some pemmican in the near future; just find a really good guide on it here: http://www.traditionaltx.us/images/PEMMICAN.pdf