Thursday, May 16, 2013

The Economic Decline of Europe

http://www.augustforecast.com/2013/05/15/findings-forecasts-05152013/

 

Findings & Forecasts 05/15/2013

Posted By Patrick Wood On May 15, 2013

Economy

With three con­cur­rent and major gov­ern­ment scan­dals filling the media, very few people will pay atten­tion or care about the eco­nomic con­ta­gion spreading throughout Europe, but they should.

One cer­tain out­come of Obama's chaotic Admin­is­tra­tion is grid­lock. With Con­gress on the warpath, every bureau­crat at every level will be in hiding so as to not draw atten­tion to them­selves. This means even less focus on the economy, spending, jobs, etc. Con­gress itself will be con­sumed with end­less hear­ings and inves­ti­ga­tions while cor­po­rate and glob­alist lob­by­ists (unac­count­able to public pres­sure) will push trade un-vetted leg­is­la­tion through right under our nose.

Obama's former Chief of Staff, Rahm Emanuel wasn't the first person to sug­gest "Never let a good crisis to go waste." Hillary and Bill Clinton both said it. Tri­lat­eral Com­mis­sioners Henry Kissinger and Zbig­niew Brzezinski were prob­ably the first in modern his­tory to ver­balize it. The point is, it's not a new idea. It is a cen­tral theme in the glob­alist play­book and his­tory bears it out: "Ordo ab Chao"Order from Chaos.

Zbig­niew Brzezinski wrote,

"How­ever crudely and prim­i­tively, man has always sought to crys­tal­lize some orga­nizing prin­ciple that would, by cre­ating order out of chaos, relate him to the uni­verse and help define his place in it." (Between Two Ages: America's Role in the Tech­netronic Era, p. 31)

Indeed, chaos is viewed as oppor­tu­nity by the global elite and thus, America is ripe for wrenching change thanks to the chaos that is upon us.

So, it fig­ures that the 17th round of nego­ti­a­tions for the Trans Pacific Part­ner­ship (TPP) is set to start today (May 15) and run through May 24in Lima Peru. There are over 600 "stake­holders" who will meet with nego­tia­tors from the 12 nations on the Pacific Rim (Aus­tralia, Brunei Darus­salam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Sin­ga­pore, United States, and Vietnam). These so-called stake­holders include mem­bers of acad­emia, NGO's, labor unions, and global corporations.

It has been esti­mated that about 20 per­cent of the TPP has to do with actual trade issues. The other 80 per­cent has to do with binding reg­u­la­tions that will super­sede the laws of indi­vidual nations. Remember the damage that NAFTA (nego­ti­ated by George W. Bush and signed into law by Bill Clinton) caused in the inter­vening years.

Will anyone cover this round of TPP nego­ti­a­tions? Not likely. No doubt that many will be smiling in the absence of media scrutiny.

Another key trade agree­ment moving for­ward is the Trans-Atlantic Trade and Invest­ment Part­ner­ship (TTIP). Although just get­ting underway, the TTIP is expected to be the largest Free Trade Agree­ment in the his­tory of our country. Again, the trade por­tion will be much smaller than the non-trade issues that deal with reg­u­la­tions, nor­mal­iza­tion, legal dis­putes, tax­a­tion, etc.

As scandal-mania moves for­ward, Democ­rats are racing to dis­tance them­selves from Obama, hoping to pre­serve some stature in the upcoming midterm elec­tions in 2014. The odds increase daily that both the House and the Senate will gather a GOP majority and push the Democ­rats back into the minority position.

While con­ser­v­a­tives are already sali­vating over this pos­si­bility, they should be careful what they wish for, because the cham­pions of Free Trade and dis­as­trous trade agree­ment have mostly come from the GOP, not Democ­rats. In fact, the greater majority of Democ­rats have con­sis­tently voted against Free Trade deals that have hurt Amer­ican jobs and industries.

Thus, without a healthy per­centage of Democ­rats in the Senate and House, all of the upcoming Free Trade Agree­ments are vir­tu­ally guar­an­teed to pass with what­ever sovereignty-robbing text that the "stake­holders" can stuff in.

But, back to Europe.

France has just slipped back into reces­sion as their economy shrunk by 0.2 per­cent in Q1 2013.

The reces­sion across the 17 member euro­zone has now entered its sixth quarter, the longest reces­sion since the union con­gealed in 1995. It is now obvious to all that Ger­many alone is unable to save any part of the euro­zone from GDP shrinkage. With their own growth rate stag­nating at 0.1 per­cent in the first quarter, they are per­ilously close to reces­sion themselves.

We can only hope that the depres­sion that is still raging in Greece does not become reality for the rest of Europe. It is now in its fifth year of eco­nomic decline, expecting a GDP con­trac­tion of 4.2 per­cent in 2013, while unem­ploy­ment con­tinues to soar. Overall unem­ploy­ment has risen to 27 per­cent but job­less youth has grown to an unbe­liev­able 64.2 per­cent! Yes, two out of three people between the ages of 15 and 24 are without work.

Mean­while, the Inter­na­tional Mon­e­tary Fund con­tinues to put the screws to Greece, demanding fur­ther tax reform and reduc­tion in public debt.

Italy is a country locked into polit­ical grid­lock, and it shows. Its economy will shrink around 1.8 per­cent in 2013 as unem­ploy­ment stays above 11.5 per­cent. Youth unem­ploy­ment rose to 36.3 per­cent in March.

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The above chart sums up the rest of Europe by showing the momentum of GDP growth. Greece has lit­er­ally dropped off the chart. Por­tugal, Spain and Italy are grouped as the next worse per­formers. Fin­land and The Nether­lands com­prise a middle group. The top grouping con­sists of Ger­many, Aus­tria, Ire­land and Bel­gium. How­ever, note that except for Ger­many, the momentum on all these coun­tries is still down.

The largest country to the east, Russia, is tech­ni­cally in a reces­sion as its basic indus­tries have con­tracted for two quar­ters in a row. If Russia posts any growth this year, it will likely be under 1 percent.

British econ­o­mists are dis­puting among them­selves as to whether or not Eng­land had a double-dip reces­sion. They did, but after revi­sions to the 2012 num­bers were released, they didn't. The Brits are famous for these kind of mean­ing­less debates. Unem­ploy­ment has risen to 7.9 per­cent while the rate of job­less youth stands at 20.7 percent.

The actual state of the euro­zone economy simply do not sup­port the polit­ical rhetoric and wishful thinking that we hear from the media. Europe is still a mess and there are no real signs of relief. Until coun­tries in Europe can shrink public and pri­vate debt, their down­ward spiral will continue.

The cor­re­sponding down­ward pull on the U.S. economy is still evi­dent and will also continue.

Article printed from August Forecast & Review: http://www.augustforecast.com

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