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Europe. Is. Finished.
Thus far, my analysis of Europe has focused on the super-leveraged banking system (26 to 1). At these levels, even a 4% drop in asset prices wipes out equity. That alone warrants concerns of systemic risk.
The situation is not much better at non-Financial European corporations. Indeed, the debt situation is so endemic to Europe as a whole that corporate Debt to Equity ratios for ALL of the PIIGS as well as the supposedly fiscally conservative countries of France and Germany are TERRIBLE.
What I’m trying to point out here is that Europe’s debt problems extend well beyond Greece’s debt. Indeed, the entire European banking and corporate system is over-burdened with debt.
The situation is no better for European Sovereign states themselves, which are facing their own debt roll over issues at a time when investors are rapidly losing their appetite for sovereign debt.
To wit, Spain, Portugal, and Italy have all relied heavily on the ECB to buy their debt at recent auctions. Germany actually just had a failed debt auction this morning. And in this environment , these nations need to meet the following debt roll over obligations:
And this is just maturing debt that’s due in the near future: it doesn’t include unfunded liabilities.
Jagadeesh Gokhale of the Cato Institute puts the situation as the following, “The average EU country would need to have more than four times (434 percent) its current annual gross domestic product (GDP) in the bank today, earning interest at the government’s borrowing rate, in order to fund current policies indefinitely.”
As I said before, Europe is finished. The region’s entire banking system is insolvent (with few exceptions). European non-financial corporations are running massive debt to equity ratios. And even EU sovereign states require intervention from the ECB just to meet current debt issuance, to say nothing of the huge amount of sovereign debt roll over that is due over the next 14 months.
Again… Europe. Is. Finished.
The Great debt Implosion will hit Europe within the next 14 months and likely much much sooner. When it dues, we will see numerous debt defaults and restructuring on both the corporate and sovereign levels. We’re also very likely going to see significant portions of the European banking system collapse “Lehman-style” along with subsequent HUGE losses of capital.
The impact of this will be global in nature. The EU, taken as a whole, is:
1) The single largest economy in the world ($16.28 trillion)
2) Is China’s largest trade partner
3) Accounts for 21% of US exports
4) Accounts for $121 billion worth of exports for South America
So if the EU banking system/ economy collapses, the global economy could enter a recession just based on that one issue alone (ignoring the other issues in China, Japan, and the US).
So if you have not already taken steps to prepare for systemic failure, you NEED to do so NOW. We're literally at most a few months, and very likely just a few weeks from Europe's banks imploding.
On that note, if you’re looking for specific ideas to profit from this mess, my Surviving a Crisis Four Times Worse Than 2008 report can show you how to turn the unfolding disaster into a time of gains and profits for any investor.
Within its nine pages I explain precisely how the Second Round of the Crisis will unfold, where it will hit hardest, and the best means of profiting from it (the very investments my clients used to make triple digit returns in 2008).
Best of all, this report is 100% FREE. To pick up your copy today simply go to: http://www.gainspainscapital.com and click on the OUR FREE REPORTS tab.
Good Investing!
Graham Summers
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Everyone there will give big cheer...
Everyone there will have moved here.
Nice take off on "West side Story" Milestones
No one in the 99% reads shit.
ti;dr
While I agree in principal, I would LOVE to see the traffic logs for ZH.
This is the go-to site for all the shit going on ... and the social media figures that out pretty quick ...
Regards,
Cooter
"Social media"? There's a "connected" radio broadcaster w an audience of 20 million who reads this site.
Alex Jones has 20 million listeners?
Alex Jones has 20 million listeners? Highly doubt that.
Rush Limbaugh has 20 million listeners, and has mentioned the site several times during his broadcasts.
Yup, I listen to him regularly. ;-)
rush is a dick. eom
Doesn't matter - there are some people here who think everything online must be free and wish to trash anyone who thinks otherwise. Idiocy.
Who gives a shit what it costs?
I do not have a large net worth; so I moved to Alaska. I have an engineering degree and market value as a 30-something. The economy is basic, simple, and didn't get all nutty with finance/service industry. If things blow up, folks still like ANS, salmon, shrimp, lumber, and gold.
If you have a large net worth, come to a different conclusion.
New Zealand was another place I looked at, but I got a job here first.
Common law. Economy not based on fraud.
Is it that fucking hard? Christ ...
Regards,
Cooter
And don't forget USA Debt to GDP ratio is 100% but Ben's got a printing press that can print 24/7
Can we now say thank you to the Jews running Wall Street & their JT Marlin chop shop type operations: pump & dump baby!!!
thanks for the info.
http://expose2.wordpress.com