Posts
18
Signs That Massive Economic Problems Are Erupting All Over The Planet
Michael
Snyder
2
June, 2013
This
is no time to be complacent. Massive economic problems are
erupting all over the globe, but most people seem to believe that
everything is going to be just fine. In fact, a whole bunch of
recent polls and surveys show that the American people are starting
to feel much better about how the U.S. economy is performing.
Unfortunately, the false prosperity that we are currently enjoying is
not going to last much longer. Just look at what is happening
in Europe. The eurozone is now in the midst of the longest
recession that it has ever experienced. Just look at what is
happening over in Asia. Economic growth in India is the lowest
that it has been in a decade and the Japanese financial system is
beginning to spin wildly out of control. One of the only places
on the entire planet where serious economic problems have not already
erupted is in the United States, and that is only because we have
"kicked the can down the road" by recklessly printing money
and by borrowing money at an unprecedented rate. Unfortunately,
the "sugar high" produced by those foolish measures is
starting to wear off. We are going to experience a massive
amount of economic pain along with the rest of the world - it is just
a matter of time.
But
for the moment, there are a lot of skeptics out there.
For
the moment, there are a lot of people that are declaring that the
problems of the past have been fixed and that we are heading for
incredibly bright economic times ahead.
Unfortunately,
those people appear to be purposely ignoring the economic horror that
is breaking out all over the globe.
The
following are 18 signs that massive economic problems are erupting
all over the planet...
#1
The eurozone is now in the midst of its longest recession ever.
Economic activity in the eurozone has declined for
six quarters in a row.
#3
Industrial production in Italy has fallen for 15
months in a row.
It has now fallen to its lowest level in about 25 years.
#4
The number of people that are considered to be "seriously
deprived" in Italy has
doubled
over the past two years.
#6
The number of unemployed workers seeking a job in France has hit a
brand new all-time record high.
Many unemployed workers in France are utterly
frustrated
at this point...
"I've
sent CVs everywhere, I come to the unemployment agency every day, for
3 or 4 hours to look for work as a truck driver and there's never
anything," said 42-year old Djamel Sami, who has been unemployed
for a year, leaving a job agency in Paris.
#7
Unemployment in the eurozone as a whole has just hit a brand new
all-time record high of 12.2
percent.
#8
Youth unemployment continues to soar to unprecedented heights in
Europe. The following is from an article that was recently
posted on
the website of the Guardian
that detailed how bad things are getting in some of the worst
countries...
In
Greece, 62.5% of young people are out of work, in Spain it's 56.4%,
then Portugal with 42.5%, and then Italy with 40.5%.
#9
Youth unemployment is being partially blamed for the worst rioting
that Sweden has seen in many years. The following is how the
Daily Mail
described the riots...
Sweden
is reeling after a third night of rioting in largely run-down
immigrant areas of the capital Stockholm.
In
the last 48 hours violence has spread to at least ten suburbs with
mobs of youths torching hundreds of cars and clashing with police.
It
is Sweden's worst disorder in years and has shocked the country and
provoked a debate on how Sweden is coping with youth unemployment and
an influx of immigrants.
#10
An astounding 10
percent
of all banking deposits were pulled out of banks in Cyprus during the
month of April alone.
#12
Suddenly Australia is experiencing some tremendous economic
challenges. The following quotes are from a recent Zero
Hedge article...
-“We’re
seeing a much sharper contraction in the Australian economy than we’d
anticipated four or five months ago”. Coffey MD, John Douglas. The
engineering group has seen its shares, which traded above $4 in 2007,
hit 10c last week.
-“By
10am, the Fitness First gym in the city is packed full of brokers
who’ve had a gutful of sitting at their desk doing nothing –
salary cuts are starting and next it will be jobs” Perth broker
-“Oh
mate, the funding market is dead. You are now seeing a few deeply
discounted rights issues for those that are reaching desperate levels
….. liquidity has completely disappeared” Perth broker
#13
The financial system in Japan is beginning to spin wildly
out of control.
The Japanese stock market has now declined about
15 percent
from the peak, and many believe that the yen will continue to get
weaker and that interest rates in Japan will start to rise
significantly.
#14
Global cash flow is declining at a rate not seen since
the last recession.
This indicates that we could be headed for a global credit crunch.
#15
Real wages continue to decline in the United States. Even
though we are being told that the U.S. is experiencing an "economy
recovery", real weekly earnings have declined from $297.79
in 2010 to $295.49
in 2011 to $294.83
in 2012. (The preceding calculation is based on 1982-1984
dollars)
#16
Wall Street is buzzing about the fact that "the Hindenburg Omen"
appeared at the end of last week. So exactly what is "the
Hindenburg Omen"? The following are the
criteria
that are used to determine whether it has appeared or not...
1.
The daily number of NYSE new 52 Week Highs and the daily number of
new 52 Week Lows must both be
greater than 2.2 percent of total NYSE issues traded that day.
2.
The smaller of these numbers is greater than or equal to 69 (68.772
is 2.2% of 3126). This is not a rule but more like a checksum. This
condition is a function of the 2.2% of the total issues.
3.
That the NYSE 10 Week moving average is rising.
4.
That the McClellan Oscillator ( a market breadth indicator used to
evaluate the rate of money entering or leaving the market and
interpretively indicate overbought or oversold conditions of the
market)is negative on that same day.
5.
That new 52 Week Highs cannot be more than twice the new 52 Week Lows
(however it is fine for new 52 Week Lows to be more than double new
52 Week Highs).
When
the Hindenburg Omen makes an appearance, it supposedly means that the
U.S. stock market is likely to experience a serious decline within
the next 40 days.
#17
As I wrote about the
other day,
the SentimenTrader Smart/Dumb Money Index is now the lowest that it
has been in
more than two years.
That means that lots of "smart money" has been getting out
of the market and lots of "dumb money" has been pouring in.
#18
Margin debt on the New York Stock Exchange has set a new all-time
high. The following is from a recent Market
Oracle article...
Margin
debt—that’s the amount of money borrowed to purchase stocks—on
the New York Stock Exchange (NYSE) reached its all-time high in
April. Margin debt on the NYSE registered at $384.3 billion as the
key stock indices hit new record-highs. (Source: New York Stock
Exchange web site, last accessed May 29, 2013.) The highest margin
debt ever reached prior to this was in July of 2007, when it stood
just above $381.0 billion. At that time, just like today, the key
stock indices were near their peaks and “buy now before it’s too
late” was the prominent theme of the day
Whenever
margin debt spikes like this, a stock market crash almost always
follows. If you doubt this, just check out the chart in this
article.
Wall
Street has had a good couple of years, but it has been a "false
prosperity" that has been pumped up by reckless money printing
by the Federal Reserve. Just like all of the other stock market
bubbles that we have seen in recent years, this one is going to burst
too. And as Marc
Faber
recently pointed out, this bubble has been particularly beneficial to
the wealthy...
The
Fed has been flooding the system with money. The problem is the money
doesn't flow into the system evenly. It doesn't increase economic
activity and asset prices in concert. Instead, it creates dangerous
excesses in countries and asset classes. Money-printing fueled the
colossal stock-market bubble of 1999-2000, when the Nasdaq more than
doubled, becoming disconnected from economic reality. It fueled the
housing bubble, which burst in 2008, and the commodities bubble. Now
money is flowing into the high-end asset market - things like stocks,
bonds, art, wine, jewelry, and luxury real estate.
Money-printing
boosts the economy of the people closest to the money flow. But it
doesn't help the worker in Detroit, or the vast majority of the
middle class. It leads to a widening wealth gap. The majority loses,
and the minority wins.
The
fact that the U.S. stock market has set new all-time record high
after new all-time record high in recent months means very little.
At this point, the stock market has become completely divorced from
economic reality. When this current bubble bursts, the
adjustment is going to be very painful. Wall Street will likely
whine and complain and ask for more bailouts, but they may find that
authorities are not nearly as sympathetic this time.
Much
of the rest of the world is already experiencing the next major wave
of the economic collapse. Reckless money printing by the Fed
and reckless borrowing and spending by the federal government may
have delayed the inevitable in the United States for a little while,
but those measures have also made our long-term problems even worse.
There
was one piece of advice that Ben Bernanke included in his
commencement
speech
to students at Princeton recently that I thought was particularly
ironic...
"Don't
be afraid to let the drama play out."
Will
he take his own advice when the next great financial crisis strikes
the United States?
That
seems very unlikely.
Unfortunately,
things are not going to be so easy to fix this next time.
What
happened back in 2008 was just a preview.
What
is coming next is going to absolutely shock the world.
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