End of the American
Dream

An economic
nightmare is descending on Europe. With each passing month, the
economic numbers across Europe get even worse. At this point it
is becoming extremely difficult for anyone to deny that Europe is
plunging into a full-blown economic depression. In fact, some parts
of Europe are already there. In Spain the overall unemployment rate
is over 22 percent, and in Greece one out of every five retail establishments
has already been closed down. All over Europe, economic activity
is rapidly slowing down, unemployment is skyrocketing and bad debts
are unraveling. It isn’t even going to take a default by a nation
such as Greece or a collapse of the euro to push Europe into an
economic depression. All Europe has to do is to stay on the exact
path that it is on right now and it will get there. Normally, European
governments would respond to an economic slowdown by increasing
government spending. But this time most of them are already drowning
in debt. Instead of increasing government spending, most governments
in Europe are actually cutting back. All over Europe, national governments
are being encouraged to implement even more tax increases and even
more budget cuts. The hope is that all of this austerity will help
solve the nightmarish sovereign debt crisis that Europe is facing.
But unfortunately, all of these tax increases and budget cuts are
also going to involve a tremendous amount of economic pain.

The frightening
thing is that we are just at the beginning of the process for most
European nations. If you want to see where nations such as Portugal,
Italy and Spain are headed, just take a look at Greece. Greece has
been going down this road for several years, and there is still
no light at the end of the tunnel for them.

The tax increases
and budget cuts that are being implemented right now in Europe will
be felt for years to come. The tremendous economic prosperity that
was fueled by unprecedented amounts of debt will now give way to
tremendous economic suffering.

The following
are 20 signs that Europe is plunging into a full-blown economic
depression….

#1
The unemployment rate for those between the ages of 16 and 24 is
28
percent in Italy, 43
percent in Greece and 51
percent in Spain.

#2
Overall, the unemployment rate for those under the age of 25 in
the EU is
22.7 percent.

#3
Citigroup is projecting that the economy of Portugal will shrink
by 5.7
percent this year.

#4
The total of all forms of debt in Portugal (government, business
and consumer) is equivalent to 360
percent of GDP.

#5
The Greek “recession” is now entering a fifth
year.

#6
The Greek economy shrank by
6 percent during 2011.

#7
It is being projected that the Greek economy will shrink by another
5 percent during 2012.

#8
The overall unemployment rate in Greece is now 18.5
percent.

#9
In Greece, 20
percent of all retail stores have been permanently shut down.

#10
The number of suicides in Greece rose by 40
percent in just one recent 12 month time period.

#11
According to the IMF, the amount of debt accumulated by the Greek
government is equal to approximately 160
percent of GDP.

#12
In total, there are now more
than 5 million unemployed workers in Spain.

#13
Bad loans in Spain recently reached a
17-year high.

#14
The overall unemployment rate in Spain is now a whopping 22.8
percent.

#15
The number of property repossessions in Spain has risen by
32 percent over the past year.

#16
When the maturing debt that the Italian government must roll over
in 2012 is added to their projected budget deficit, the total comes
to approximately 23.1
percent of Italy’s GDP.

#17
Manufacturing activity in the euro zone has fallen for
five months in a row.

#18
The UK economy actually
contracted during the 4th quarter of 2011.

#19
The German economy actually
contracted during the 4th quarter of 2011.

#20
The Baltic Dry Index, often used as a gauge for the health of the
world economy, has fallen a
staggering 61 percent since October.

Economic gloom
is slowly spreading throughout Europe like a dark cloud. Some of
the strongest economies in Europe are only just starting to slow
down. Others are already gripped by tremendous economic pain. Trends
forecaster Gerald Celente recently explained to ABC Australia that
much of the EU is already
experiencing an economic depression….

“If you
live in Greece, you’re in a depression; if you live in Spain,
you’re in a depression; if you live in Portugal or Ireland, you’re
in a depression,” Celente said. “If you live in Lithuania, you’re
running to the bank to get your money out of the bank as the bank
runs go on. It’s a depression. Hungary, there’s a depression,
and much of Eastern Europe, Romania, Bulgaria. And there are a
lot of depressions going on [already].”

As things fall
apart in Europe, the political wrangling is going to become even
more intense.

For example,
over the past few days a shocking new German proposal has come to
light. Germany apparently would like Greece to give a “EU
budget commissioner” the power to veto all Greek decisions on
taxes and spending.

That would
represent an unprecedented loss of sovereignty for Greece, and obviously
Greek politicians are not excited about the idea at all.

In fact, Greek
education minister Anna Diamantopoulou said that the proposal was
“the
product of a sick imagination“.

But the sentiment
in Germany is that since Greece must be bailed out by them, Greece
should be willing to submit to some oversight for a certain amount
of time.

It will be
interesting to see how this plays out.

Meanwhile,
the Greek people continue to become angrier. According to one recent
poll, about
90 percent all of Greek citizens are unhappy with the interim
government led by Prime Minister Lucas Papademos.

Things are
also unraveling very quickly in Portugal. Now there is talk that
private investors will be required to take a “haircut” on Portuguese
debt as well.

The following
is from a recent article in
the Telegraph….

A report
for the Kiel Institute for the World Economy said Portugal would
have to run a primary budget surplus of over 11pc of GDP a year
to prevent debt dynamics spiralling out of control, even in
a benign scenario of 2pc annual growth.

“Portugal’s
debt is unsustainable. That is the only possible conclusion,”
said David Bencek, the co-author, warning that no country can
achieve a primary budget surplus above 5pc for long.

“We
won’t know what the trigger will be but once there is a decision
on Greece people are going to start looking closely and realise
that Portugal is the same position as Greece was a year ago.”

Sadly, that
article is exactly right.

Portugal is
marching down the exact same road that Greece went down.

The yield on
5 year Portuguese bonds is now up to an all-time record 19.8
percent.

A year ago,
the yield on those bonds was only about 6 percent.

This is the
same thing that happened to Greece.

A year ago,
the yield on 5 year Greek bonds was about 12 percent.

Now the yield
on those bonds is more than 50
percent.

The world is
facing a debt crisis unlike anything ever seen before, and Europe
is right at the center of it.

Right now,
the major industrialized nations of the world are 55
trillion dollars in debt.

Everyone knew
that at some point that debt bomb was going to explode.

So what is
going to happen next?

Well, Europe
appears to be heading for a full-blown economic depression.

Will the rest
of the globe be able to escape a similar fate?

Reprinted
with permission from End
of the American Dream.

February
3, 2012

Copyright
© 2012 End
of the American Dream