Economic Mess

–

–

+++++++++++++++++++++++

If Europe falls, so falls the world…

In April of 1965 a young corporal was sitting with his company in a clearing somewhere in central Vietnam.  After hours of being on patrol the men needed a few minutes to rest their legs and catch their breath before heading back to the barracks.  Normally on these “breaks” the corporal and the rest of the company would take a moment to smoke, write a quick letter home or take a quick nap; but on this particular day the corporal had an uneasy feeling and decided to stay on alert, so he stood up and walked the perimeter of the clearing.

Only a few minutes had gone by when suddenly he heard a faint “thump” from a mortar leaving its tube.  He’d been trained to hear distinct sounds such as this and was positive of what he heard, so he called back to his company and asked if anyone else had heard it; but they all shrugged it off.   The corporal still took precautions and instinctively yelled: “IN COMING!!” But none of his platoon mates listened to him and they laughed it off.  Just then, and quite suddenly, an explosion rocked the area just to the outside of the clearing and all the men started scrambling and ducking for cover. 

It was a shock to every soldier out there that the only action they saw all day was that lone mortar round.  Nothing before, nothing after and not one soldier was injured or wounded, but they all learned a valuable lesson that day.

—————————————————————————

Today, economically no one is in great shape and no matter how many times we try to tell ourselves that things are “getting better”, we’re just lying to ourselves.  It reminds me of the quote in the 1986 movie “The Fly” starring Jeff Goldblum as Seth Brundle when he said: “I’m getting better,” however the sad reality was that Goldblum’s character wasn’t getting better, he was turning into a freakish monster that no one could control.  And I fear that’s what going to happen economically; but not just to the Economy of the United States, but that of the entire world.

Here’s my reason: We’ve taken our eyes off of Europe.

Greece has been having economic problems for the better part of ten years.  And with the news today that Greece might default on their debt payments, it’s a sure sign that Greece remains a trouble spot for the European Union.  But Greece isn’t alone.  Spain, Portugal, Belgium and even Germany have all been struggling as of late with their own economic issues, though not at the same level as Greece.  

So, if Greece files bankruptcy…who’s to follow?  It could be one of many European nations that are part of the EU.  If that doesn’t cause you to worry, let me throw a little fuel on the fire…

If the European Union should have an economic collapse, then I fear a chain reaction of epic proportions awaits for all the world to experience.  The reason I say this is because if countries in Europe can’t buy goods to meet industry and consumer demand, then other countries outside of Europe such as the USA, Russia and China are soon to follow.

If the USA, China and Russia aren’t making any money, then those countries who have a very large debt owned by other countries (i.e. the USA) will have to raise taxes which their citizens won’t be able to afford, resulting in a default on debt payments as well which will lead to that nation filing bankruptcy. 

See the domino effect?

If not, let me spell it out for you… Global Economic Catastrophe.

In other words…Another great depression. 

“Thump!”  —  did anyone else just hear that?”

“In Coming!”   

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

–

Some of you reading this might think I wrote this article today, and it may surprise you that I actually wrote it over two years ago on February 27, 2013.

After the news today that Greece may default on loan and debt payments and seeing the overinflated DOW drop over 170 points, I thought I should repost it just so I can say that I told ya so after the global economy tanks.  

And yes…the prices of stocks on the market today are overinflated and unsustainable and the only reason that the market has doubled in the past eight years is because of speculators and a zero percent interest rate that the Federal Reserve has created to limit inflation.  However, most economists who actually earned their degree and didn’t buy one from some Ivy-league school, will tell you that any country that thinks they can sustain a zero percent interest rate for the long-term, will soon find out that isn’t possible. 

It’s like stretching a rubber band and expecting it to never break.   It’ll last for a while, but eventually the elasticity will break down and the rubber band will break.  

Economic failure is pathetic.  

–

–

–