Tuesday, June 19, 2012

19 Reasons to Start Preparing for a Global Economic Collapse

Michael Snyder, Contributor
Activist Post

Yes, it is officially time to start freaking out about the global economy. The European financial system is falling apart and it is going to go down hard. If Europe was going to be saved it would have happened by now. The big money insiders have already pulled their funds from vulnerable positions and they are ready to ride out the coming chaos.

Over the next few months the slow motion train wreck currently unfolding in Europe will continue to play out and things will likely really start really heating up in the fall once summer vacations are over.

Most Americans greatly underestimate how much Europe can affect the global economy. Europe actually has a larger population than the United States does. Europe also has a significantly larger economy and a much larger banking system. The world is more interconnected today than ever before, and a collapse of the financial system in Europe will cause a massive global recession. Once the global economy slides into another major recession, it is going to take years to recover. The pain is going to be immense. Yes, that is going to include the United States. Sadly, we never recovered from the last recession, and it is frightening to think about how much further this next recession is going to knock us down.

The big problem is that there is simply way, way, way too much debt in the United States and Europe. It has been a lot of fun spending all of this borrowed money, but now we get to pay the price.


The following are 19 reasons why it is time to start freaking out about the global economy....

#1 The yield on 10 year Italian bonds has now risen to more than 6 percent.

#2 The yield on 10 year Spanish bonds has now risen to more than 7 percent. This is considered to be an unsustainable level.

#3 Citigroup Chief Economist Willem Buiter says that both Italy and Spain are going to need major bailouts.

#4 The Spanish banking crisis continues to get worse. The following is from aCNN article that was posted on Monday....
But the depth of the nation's crisis has raised doubts about whether €100 billion will be enough to recapitalize the banks. For example, the Bank of Spain, the nation's central bank, released data Monday showing that "doubtful" loans -- those that are more than 3 months overdue -- rose to €152.7 billion in April, equal to 8.7% of all the loans held by the nation's banks.
#5 Unemployment in Spain is sitting at a record high of over 24 percent with no hope in sight.

#6 Unemployment in the eurozone as a whole has hit a brand new all-time record high.

#7 The socialists won an outright majority in the recent parliamentary elections in France. That means that France and Germany are now headed in completely different directions. The close cooperation that we have seen between France and Germany in recent years is now over.

#8 New French President Francois Hollande has promised to implement a top tax rate of 75 percent on those making over 1 million euros a year.

#9 German Chancellor Angela Merkel has declared that Germany will not budge at all on the terms of the Greek bailout.

#10 Analysts at Citigroup Global Markets are projecting that the odds of Greece leaving the euro over the next 12 to 18 months are still between 50 and 75 percent.

#11 Money is being transferred from banks in southern Europe to banks in northern Europe at an astounding pace....
Financial advisers and private bankers whose clients have accounts too large to be covered by a Europe-wide guarantee on deposits up to 100,000 euros ($125,000), are reporting a 'bank run by wire transfer' that has picked up during May. 
Much of this money has headed north to banks in London, Frankfurt and Geneva,financial advisers say. 
'It's been an ongoing process but it certainly picked up pace a couple of weeks ago We believe there is a continuous 2-3 year bank run by wire transfer,' said Lorne Baring, managing director at B Capital, a Geneva-based pan European wealth management firm.
#12 As I wrote about recently, about 500 million euros a day has been pulled out of Greek banks so far this month.

#13 The Bank for International Settlements is warning that global lending is contracting at the fastest rate that we have seen since the end of the last financial crisis.

#14 Lloyd's of London has publicly admitted that it is making preparations for a collapse of the eurozone.

#15 Government debt levels all over the industrialized world have exploded in recent years. The following is from a recent article by Stephen Lendman....
Five years ago, OECD countries sovereign debt/GDP ratios were 70%. Today it’s 106% and rising. 
Anything over 100% is considered to be an extremely dangerous level.
#16 The economic problems in Europe are already taking a toll on the U.S. economy. At this point U.S. exports to Europe are way down.

#17 One recent poll found that 75 percent of Americans are either "very or somewhat worried" that the U.S. economy is heading for another recession.

#18 Under Barack Obama, the United States has been indulging in a debt binge unlike anything ever seen in U.S. history. The following is from a recent Forbes article....
After just one year of the Obama spending binge, federal spending had already rocketed to 25.2% of GDP, the highest in American history except for World War II. That compares to 20.8% in 2008, and an average of 19.6% during Bush’s two terms. The average during President Clinton’s two terms was 19.8%, and during the 60-plus years from World War II until 2008 — 19.7%. Obama’s own fiscal 2013 budget released in February projects the average during the entire 4 years of the Obama Administration to come in at 24.4% in just a few months. That budget shows federal spending increasing from $2.983 trillion in 2008 to an all time record $3.796 trillion in 2012, an increase of 27.3%. 
Moreover, before Obama there had never been a deficit anywhere near $1 trillion. The highest previously was $458 billion, or less than half a trillion, in 2008. The federal deficit for the last budget adopted by a Republican controlled Congress was $161 billion for fiscal year 2007. But the budget deficits for Obama’s four years were reported in Obama’s own 2013 budget as $1.413 trillion for 2009, $1.293 trillion for 2010, $1.3 trillion for 2011, and $1.327 trillion for 2012, four years in a row of deficits of $1.3 trillion or more, the highest in world history.
#19 Barack Obama almost seems more focused on his golf game than on the problems the global economy is having. He just finished up playing his 100th round of golf since he became president.

If you are looking for some kind of a global financial miracle you can stop watching.

If European leaders had a master plan to save Europe they would have shown it by now.

If Barack Obama had a master plan to fix things he would have implemented it by now.

If the Federal Reserve had a master plan to fix things we would have seen it by now.

The entire house of cards is starting to come down and things are going to get really messy.

A lot of people both in the United States and in Europe are going to lose their jobs and their homes over the next few years. It is likely that the next recession will be even more painful than the last one was.

Now is not the time to panic. If you acknowledge what is coming and prepare accordingly then you will likely be in good shape.

But if you stick your head in the sand and pretend that everything is going to be okay then the next few years will likely be incredibly painful for you.

This article first appeared here at The Economic Collapse.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.


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13 comments:

Anonymous said...

When you have a monetary and banking system based on fraud it eventually collapses. You cannot create wealth with a service and information economy and a bloated bureacracy. You cannot pay off the national debt with the unemployed, the underemployed or part-time workers and people working for less money. The revenues simply are not there to pay down the debt. The debt is growing exponencially due to compound interest. Most of the jobs in manufacturing have been out-sourced to places like China and India.

Anonymous said...

It has already "hit the fan," now the buzzsaw is coming out.

Anonymous said...

Man's Greed is destroying the Earth.....our Home!

Anonymous said...

All these 19 reasons are not accurate. I guess this article was written to put down something sensational. Yes, there are several problems over there but things are not as catastrophic as the author wants us to believe. Perhaps he does not live in Europe.

Anonymous said...

Yes the buzzsaw is well sharpened and ready to tear thru anything that gets in its path. The problem is people world wide are SHEEP they will follow, no matter how bad it gets there is always someone else to blame it on. We have been fighting this for years it isn't gonna stop. We need to stand up and clean some house. Stop the rich from getting richer. I wish there was an instruction sheet to follow so we could keep what we have worked so hard for,but that ain't gonna happen. Broke and living on the street oh joy can't wait. Meanwhile the politicians are sucking it up and enjoying there so called rich life come one people its time to get pissed and start kicking some asses out of wall street and take back what is ours .

Anonymous said...

By this time next year , we'll all be Islanders

Persil said...

Here in Italy, 83% of the overall population owns at least 1 apartment/house; savings are declining but Italians are paranoid about it, they want to have plenty of "ammunitions"; some Italians are buying precious metals.
This to say that every country is different; private debt here is MUCH MUCH lower than public debt. The sum of public + private debts is less scaring than most Western nations.

This is not to say that we are in good shape; this is to say that the current FIAT-money and fractional reserve system is dead. A debt-driven society is a rotten society, anywhere on Planet Earth.

My euro-cent or 1 Lira, I don't know. Personally I diversified my investments as I believe that all paper money is toilet paper, sorts of...

Anonymous said...

The Central Bankers WANT a 'global' economic collapse, particularly in the 'EU', and eventually [possibly as early as Aug/Sept, 2012] in the U.S. Why? So, that they can step in with their PRE-PLANNED "SOLUTION": A ONE-WORLD CURRENCY, UNDER THEIR CONTROL. They may even try to back this international currency with GOLD, since Central Bankers own MOST of the above-ground, investment-grade gold - all of this, allowing them to remain in control, as we move from one monetary/currency system, to the next. REMEMBER THIS: THE CENTRAL BANKERS WANT A GLOBAL ECONOMIC COLLAPSE. For that reason ALONE, people should be SERIOUSLY anticipating that IT WILL BE A REALITY, in the not-too-distant future, POSSIBLY within a few months from now, or at the end of 2012, at the earliest. PREPARE NOW: 1) WATER filtration/purification system, 2) FOOD storage, to get you through 6 months to 1 year, 3) SEEDS, non-gmo, non-hybrid, 4) EXTRA MEDICINE(S), ASPIRIN, multi-vitamins, etc., 5) PERSONAL HYGIENE ITEMS, 6) DURABLE CLOTHING, especially work boots, pants, shirts (buy Made in USA), 7) PMs, SILVER & a little gold BULLION (coins, rounds, bars), 8) Barter items - alcohol, liquor, cigarettes, chocolate, and any other items that may become highly sought-after, during a total economic shutdown - where even trucks aren't routinely delivering food, or supplies to local stores. DO THE ABOVE, AT A MINIMUM - and, you'll be in MUCH better shape, than the masses of un-informed Americans, who actually believe we are in a 'recovery', right now! It's been 4 years, since the 'downturn' of 2008 - AND NOTHING HAS CHANGED! Imagine what A GLOBAL DEPRESSION would be like!

Anonymous said...

If you want to prepare for the coming collapse you had better learn to barter, or prepare to write your own IOUs and back them up. We need to reject the banksters' phony counterfeit fiat paper that passes for money. Also, stop working for government or those that hold positions in government that allow the banksters to get away with their crimes. Boycott all them that support this fraud; refuse their phony money.

This is a moral and economic war of communism. Learn the ten elements of communism; these criminals told you how they were robbing you when they wrote them. Pass up on the propaganda that surrounds them.

I repeat, this is war! Your government was overthrown a long, long time ago. Do not expect them to help you as they are the problem. Your “government" has legalized communism as the law. Your “government” is totally parasitic! They produce nothing that the general population would pay for if they were not forced to do so through “taxation”.

There is absolutely no need for taxes when they have printing presses running 24/7! Why do we need to borrow paper from the Federal Reserve international bankster's scam operation when we can print it up our selves without paying interest on a non-existent fraud debt?

This national debt is a fraud that never could lawfully exist if it were not for your criminal Congress allowing it.

Our Continental Congress understood this when they printed up their own money without the king’s permission. Abraham Lincoln understood this when he printed up the Lincoln greenback and for this they killed him. JFK was going to do the same and they killed him.

Recognize this economic WAR for what it is and stop being a part of your own destruction. Understand that your “government” is controlled by organized crime and prepare for what is coming down the pike.

Anonymous said...

Hi, Ponce here.

To delay what will happe is only to make it worse. When the rest of the world moves forward the USA will stay wayyyyyyy wayyyyy wayyyyyyy behind.......what makes the economy of the USA is their export and and not the fiat printing presses, we non longer have export, only expeding.

"No Export = No Recovery"... Ponce

Anonymous said...

When the financial base of the economic system collapses it goes back to sub-sistence farming, animal husbandry, hunters and gatherers and barter.

Anonymous said...

Let the banks go bankrupt. Good riddance. Let Greece default and go back to the drachma, Italy to the lira, Spain to whatever they had. England kept the pound, and their money is worth more than the Euro. Iceland and Argentina defaulted on their "debts", and after a period of adjustment, they're both doing fine.

canobs said...

___Bailouts just make things worse. So is the controls of the BIS(bank for international settlements)IMF and WB. ____ The real problem is that ECB is Privatized and not PUBLIC, just like the Fed in USA. ___ Ref: webofdebt.com/articles - canobs.livejournal.com

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