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17 Signs Of A Full-Blown Economic Depression Raging In Southern Europe

Tyler Durden's picture




 

Submitted by Michael Snyder of The Economic Collapse blog,

When you get into too much debt, eventually really bad things start to happen.  This is a very painful lesson that southern Europe is learning right now, and it is a lesson that the United States will soon learn as well.  It simply is not possible to live way beyond your means forever.  You can do it for a while though, and politicians in the U.S. and in Europe keep trying to kick the can down the road and extend the party, but the truth is that debt is a very cruel master and at some point it inevitably catches up with you.  And when it catches up with you, the results can be absolutely devastating.

Greece, Italy, Spain and Portugal all tried to just slow down the rate at which their government debts were increasing, and look at what happened to their economies.  In each case, GDP is shrinking, unemployment is skyrocketing, credit is freezing up and manufacturing is declining.  And you know what?  None of those countries has even gotten close to a balanced budget yet.  They are all still going into even more debt.  Just imagine what would happen if they actually tried to only spend the money that they brought in?

I have always said that the next wave of the economic collapse would start in Europe and that is exactly what is happening.  So keep watching EuropeWhat is happening to them will eventually happen to us.

The following are 17 signs that a full-blown economic depression is raging in southern Europe...

#1 The Italian economy is in the midst of a horrifying "credit crunch" that is causing thousands of companies to go bankrupt...

Confindustria, the business federation, said 29pc of Italian firms cannot meet "operational expenses" and are starved of liquidity. A "third phase of the credit crunch" is underway that matches the shocks in 2008-2009 and again in 2011.

In a research report the group said the economy was caught in a "vicious circle" where banks are too frightened to lend, driving more companies over the edge. A thousand are going bankrupt every day.

#2 During the 4th quarter of 2012, the unemployment rate in Greece was 26.4 percent.  That was 2.6 percent higher than the third quarter of 2012, and it was 5.7 percent higher than the fourth quarter of 2011.

#3 During the 4th quarter of 2012, the youth unemployment rate in Greece was 57.8 percent.

#4 The unemployment rate in Spain has reached 26 percent.

#5 In Spain there are 107 unemployed workers for every available job.

#6 The unemployment rate in Italy is now 11.7 percent.  That is the highest that it has been since Italy joined the euro.

#7 The youth unemployment rate in Italy has risen to a new all-time record high of 38.7 percent.

#8 Unemployment in the eurozone as a whole has reached a new all-time high of 11.9 percent.

#9 Italy's economy is starting to shrink at a frightening pace...

Data from Italy's national statistics institute ISTAT showed that the country's economy shrank by 0.9pc in the fourth quarter of last year and gross domestic product was down a revised 2.8pc year-on-year.

#10 The Greek economy is contracting even faster than the Italian economy is...

Greece also sank further into recession during the fourth quarter of 2012, with figures on Monday showing the economy contracted by 5.7pc year-on-year.

#11 Overall, the Greek economy has contracted by more than 20 percent since 2008.

#12 Manufacturing activity is declining just about everywhere in Europe except for Germany...

Research group Markit said its index of activity in UK manufacturing – where 50 is the cut off between growth and decline – sank from 50.5 in January to 47.9 in February. It left Britain on the brink of a third recession in five years after the economy shrank by 0.3 per cent in the final quarter of 2012.

Chris Williamson, chief economist at Markit, said: ‘This represents a major setback to hopes that the UK economy can return to growth in the first quarter and avoid a triple-dip recession.’

The eurozone manufacturing index also read 47.9. Germany scored 50.3 but Spain hit 46.8, Italy 45.8 and France 43.9.

#13 The percentage of bad loans in Italian banks has risen to 12.2 percent.  Back in 2007, that number was sitting at just 4.5 percent.

#14 Bank deposits experienced significant declines all over Europe during the month of January.

#15 Private bond default rates are soaring all over southern Europe...

S&P said the default rate for Italian non-investment grade bonds jumped to 9.5pc last year from 5.7pc in 2012 as local banks shut off funding. It was even worse in Spain, doubling to 14.3pc.

The default rate in France rocketed from 0.8pc to 8.7pc, the latest in a blizzard of bad news from the country as the delayed effects of tax rises, fiscal tightening, and the strong euro do their worst.

#16 Lars Feld, a key economic adviser to German Chancellor Angela Merkel, recently said the following...

"The sustainability of Italian public finances is in jeopardy. The euro crisis will therefore return shortly with a vengeance."

#17 Things have gotten so bad in Greece that the Greek government plans to sell off 28 state-owned buildings - including the main police headquarters in Athens.

One of the few politicians in Europe that actually understands what is happening in Europe is Nigel Farage.  A video of one of his recent rants is posted below.  Farage believes that "the Eurozone has been a complete economic disaster" and that the worst is yet to come...

Most people believe that the eurozone has been "saved", but that is not even close to the truth.

In fact, it becomes more likely that we will see the eurozone break up with each passing day.

So who would leave first?

Well, recently there have been rumblings among some German politicians that Greece should be the first to leave.  The following is from a recent Reuters article...

Greece remains the biggest risk for the euro zone despite a calming of its economic and political crisis and may still have to leave the common currency, a senior conservative ally of German Chancellor Angela Merkel said.

But there is also a chance that Germany could eventually be the first nation that decides to leave the euro.  In fact, a new political party is forming in Germany that is committed to getting Germany out of the euro.  The following is a brief excerpt from a recent article by Ambrose Evans-Pritchard...

A new party led by economists, jurists, and Christian Democrat rebels will kick off this week, calling for the break-up of monetary union before it can do any more damage.

"An end to this euro," is the first line on the webpage of Alternative für Deutschland (AfD). "The introduction of the euro has proved to be a fatal mistake, that threatens the welfare of us all. The old parties are used up. They stubbornly refuse to admit their mistakes."

They propose German withdrawl from EMU and return to the D-Mark, or a breakaway currency with the Dutch, Austrians, Finns, and like-minded nations. The French are not among them. The borders run along the ancient line of cleavage dividing Latins from Germanic tribes.

However this all plays out, the reality is that things are about to get much more interesting in Europe.

No debt bubble lasts forever.  The Europeans are finding that out right now, and the U.S. won't be too far behind.

But for the moment, most Americans assume that everything is going to be okay because the Dow keeps setting new all-time record highs.

Well, enjoy this little bubble of debt-fueled false prosperity while you can, because it won't last for long.

A massive wake up call is coming, and it will be exceedingly painful for those that are not ready for it.

Greek Economic Riot - Photo by Ggia

 
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Sat, 03/16/2013 - 08:16 | 3334862 epi_tis_thalassis
epi_tis_thalassis's picture

Debt is no different than bet: the only one that predictably makes money is the broker.

Fri, 03/15/2013 - 19:35 | 3333862 tempo
tempo's picture

Economic collapse and robots. Automation(robots) eliminates million of good paying and even crappy jobs every year that will never return. Hence, central bankers attempt to slow the declining standard of living and consumption by magically creating funds. Over time this creates inflation making matter worse. robots are everywhere and can do very complex tasks. No one, nothing can stop the massive debt creation by robots which will have to be written off as worthless at somepoint and we start all over.

Fri, 03/15/2013 - 19:40 | 3333872 little buddy bu...
little buddy buys the dips's picture

this is serious stuff. a full-blown economic depression could destroy your jeep.

Fri, 03/15/2013 - 19:48 | 3333899 robertocarlos
robertocarlos's picture

That picture looks like WWII collateral damage.

Sat, 03/16/2013 - 05:40 | 3334773 Dr. Sandi
Dr. Sandi's picture

It actually reminds me of Hollywood after Rodney King. Now THAT was a PAAAARTY.

National Guardsmen on the roof, each with only one bullet because that's all their local command could afford.

God, I miss the good old days.

Fri, 03/15/2013 - 19:42 | 3333879 macroeconomist
macroeconomist's picture

Why it is impossible to solve the euro crisis:

http://www.socialsciences.manchester.ac.uk/cgbcr/dpcgbcr/dpcgbcr180.pdf

Fri, 03/15/2013 - 19:46 | 3333896 robertocarlos
robertocarlos's picture

I'm out of debt thanks to all those govt cheques.

Fri, 03/15/2013 - 19:58 | 3333925 lolmao500
lolmao500's picture

If you ask the Obamabots and the Krugmanites, they'll tell you that Europe should spend more to get themselves out of their hole... and guess what, they are advocating the same thing in the US.

Fri, 03/15/2013 - 19:58 | 3333926 Mr. Hudson
Mr. Hudson's picture

: "Well, enjoy this little bubble of debt-fueled false prosperity while you can, because it won't last for long."

Not so. We Americans have the Jews on our side.

Fri, 03/15/2013 - 20:20 | 3333992 frenchie
frenchie's picture

you mean jews have you as slaves ?

Fri, 03/15/2013 - 20:24 | 3334004 Mr. Hudson
Mr. Hudson's picture

Americans are the best fed and kept slaves. They have even built campgrounds for us run by FEMA.

Fri, 03/15/2013 - 20:39 | 3334055 Herodotus
Herodotus's picture

...."We Americans have the Jews on our side."

When this crisis is finally over, they will be gone.  You can be pretty sure of that.

Fri, 03/15/2013 - 20:00 | 3333930 Seasmoke
Seasmoke's picture

Funny Europe is a North - South issue , while USA is an East - West / Central issue.

Must be something about the salt air and/or water.

Fri, 03/15/2013 - 20:04 | 3333937 Mr. Hudson
Mr. Hudson's picture

USA is a dumb vs. dumber issue.

Fri, 03/15/2013 - 20:03 | 3333935 Glass Steagall
Glass Steagall's picture

<sigh> slowest train wreck ever..

Fri, 03/15/2013 - 20:28 | 3334015 zen0
zen0's picture

It looks slow because it was not a trainwreck, it was an earthquake. Now they are just moving the rubble around in different patterns pretending they are rebuilding.

Fri, 03/15/2013 - 20:06 | 3333948 SmittyinLA
SmittyinLA's picture

All of the EU is getting mass immigration crammed down their throats too, it aint a coincidence, mass immigration comes with mass debt, displacing a native population cost money.

Look at the Swiss, no debt no immigration, they have to mitigate everybody's debasement.

Fri, 03/15/2013 - 20:15 | 3333977 ziggy59
ziggy59's picture

Isnt it celente that says: when people lose everything and have nothing else to lose, they lose IT?

Fri, 03/15/2013 - 20:21 | 3333993 Mr. Hudson
Mr. Hudson's picture

Yes, but only if we get to keep our guns.

Fri, 03/15/2013 - 20:17 | 3333982 Wanton1
Wanton1's picture

Turkey PM Erdogan claims

Zionism is a "crime against humanity"

 

 

Fri, 03/15/2013 - 20:22 | 3333996 Mr. Hudson
Mr. Hudson's picture

Not all Jews are Zionists. Some are bankers.

Fri, 03/15/2013 - 20:30 | 3334027 shovelhead
shovelhead's picture

Ask him how he feels about Armenians. 

Fri, 03/15/2013 - 21:40 | 3334210 adr
adr's picture

Armenians can get you a nice girl that will let you do ANYTHING to her. She has to cuase she owes the guys for paying her crossing.

Fri, 03/15/2013 - 22:57 | 3334385 BringOnTheAsteroid
BringOnTheAsteroid's picture

Mildly off topic, but does anyone know where Jews actually come from?

Sat, 03/16/2013 - 00:43 | 3334542 W74
W74's picture

Abram/Abraham was supposedly from Ur, way down in the southern parts of Mesopotamia.  No idea why so many of his decentants desire control/power and can still maintain a victim complex with a straight face while bulldozing other people's houses.

Sat, 03/16/2013 - 05:43 | 3334774 Dr. Sandi
Dr. Sandi's picture

Mildly off topic, but does anyone know where Jews actually come from?

New York, at least for many of my own acquaintance. A few from Fairfax in LA. A couple from Clevaland.

But technically, most of them come from their mother, like the rest of us.

Sat, 03/16/2013 - 08:40 | 3334882 css1971
css1971's picture

Sephardic jews are Palestinians. Genetically identical. Ashkenazi jews are Sephardic jews who mixed with western Europeans.

Judaism is therefore cultural not genetic.

Fri, 03/15/2013 - 20:19 | 3333985 22winmag
22winmag's picture

Die fiat currencies, die!

Fri, 03/15/2013 - 20:25 | 3334006 LibertarianMenace
LibertarianMenace's picture

Come back when you have a minimal understanding of market forces and credit based economies.

I suggest you take your own advice. But don't bother coming back.

Fri, 03/15/2013 - 20:28 | 3334017 shovelhead
shovelhead's picture

I like this Krugman guy.

Almost as funny as the real one.

Fri, 03/15/2013 - 20:37 | 3334048 rlouis
rlouis's picture

In my part of N. CA we have light industrial parks and small and mid-size office parks that have 30% + vacancy - it has been that way for 3 years.  Today I saw the local Acura dealer selling used cars for $10,000.  Their Honda store accross the street had used cars under $5,000.  Checked out the Walmart to see the empty shelves myself - [wow!] that's not good for sales.

Houses are selling like hotcakes with multiple and all cash offers but small multi-unit residential properties in less desirable areas are selling at 10-12 gross rents and less.  Tight job market for working class serfs make paying/collecting rent a chore. 

Barry Obama must be crappin in his pants hoping the MSM can keep the BS going... 4eva (?)

Fri, 03/15/2013 - 20:47 | 3334078 Meat Hammer
Meat Hammer's picture

Each one of us could unplug from the machine tomorrow if we really, REALLY, wanted to.

Think about it.  What is money?

We're getting there.....albeit very slowly.

Fri, 03/15/2013 - 21:06 | 3334120 mt paul
mt paul's picture

death 

by debt...

Fri, 03/15/2013 - 21:12 | 3334140 Fix It Again Timmy
Fix It Again Timmy's picture

America will have to import more oil to keep up with the manufacture of EBT cards....

Sat, 03/16/2013 - 05:44 | 3334775 Dr. Sandi
Dr. Sandi's picture

They're plastic. Let the Chinese do it.

Fri, 03/15/2013 - 21:37 | 3334201 adr
adr's picture

According to Krugman all of the problems we are having are due to spending more than we have, because we should actually be spending WAY MORE THAN WE HAVE!!!!!

See if you are $100 in debt, and somebody else is $100 in debt, they should borrow $100, go $200 in debt, and give you $100. Now you are debt free and you can go out and buy $100 worth of stuff and go $100 in debt again. What should happen is you use the $100 to buy $100 worth of stuff from the guy that gave you the $100 so he is only $100 in debt. Now it is your turn to borrow $100 and give it to him, making him debt free so he can buy $100 of stuff from you.

I lost track there but the idea is that all of this borrowing and trading increases economic activity and all the debt cancels itself out and BOOM PROSPERITY!!!!

See debt doesn't matter because you can always borrow more debt to pay debt, and somehow more debt actually doesn't increase debt because as long as you have no intention of even paying back the debt, IT DOESN'T MATTER!!!!

SEEE KEYNESIANISM WORKS.

I'm still trying to figure out how you can increase revenue when you are increasing debt at a faster rate. I mean if your company brought in $100 million but you spent $250 million to make the $100 million, you should be in the red by $150 million. Krugman must be right though, HE HAS A NOBEL PRIZE!!! At some point revenue will increase at a faster rate then the increase in debt and you will be able to pay off the debts.

That's right, MASSIVE INFLATION!!! If you charge three times what you did, you'll bring in $300 million and if it still cost you $250 million, you now have a $50 million profit and you can pay off your $150 in three years. Hell charge five times what you did and pay off your debt in one year with plenty left over.

HOW'D I DO IN KEYNESIANISM 101?????

Fri, 03/15/2013 - 23:38 | 3334462 pashley1411
pashley1411's picture

I wish people would shut up about Krugman.    He's a joke, okay?   In his world the supply for money never meets the demand for money, so we can increase supply ad infinitum, for reasons that, as far I can tell, are unexamined.   So some idiot at the NYT gives him ink.   Ignore him.

Sat, 03/16/2013 - 09:18 | 3334920 Setarcos
Setarcos's picture

HOW'D I DO IN KEYNESIANISM 101?????

Mega fail adr.

By all means bash Krugman - if you get pleasure from it - but leave Keynes out of it, because he never advocated deficit spending on anything like the scale that has gone on, since the Chicago School brand of economics went crazy with tax cuts and privatization during the 1980s, e.g. Reaganomics and Thatcherism.

Both Ronnie Raygun and Maggot Scratcher went crazy with cutting taxes, selling national assets and then spending like crazy on the military with money borrowed from private banksters.

Leaving aside the fact that Keynes hated warring, he simply advocated taxing during good times, so as to have savings to spend during bad times.

You don't have a clue adr, so I give you FFF.

Fri, 03/15/2013 - 21:49 | 3334230 augustus caesar
augustus caesar's picture

There should be a small sign next to the pyramids in Giza reading : "Here lie the results of the first Keynesian economic stimulus in known history"

Fri, 03/15/2013 - 21:56 | 3334253 adr
adr's picture

Actually I think that should go to the Minoans.

Hey that island over there will be a great place to build an Empire. Right in the middle of trade routes we can control and tax.

There is a really big volcano there.

Hey, who cares, we haven't seen a volcano blow since what, ever.

Fri, 03/15/2013 - 22:04 | 3334264 augustus caesar
augustus caesar's picture

Well that would certainly be some 'broken windows' to get the party started. If you've ever been the island is really quite pretty, can't say I'd blame them for wanting to stay.

Sat, 03/16/2013 - 01:44 | 3334613 Matt
Matt's picture

Hey, that volcano was the first known application of geothermal heating. They had hot and cold running water, indoor plumbing, you name it. They were clearly early pioneers in the green energy movement.

 

Sat, 03/16/2013 - 05:45 | 3334777 Dr. Sandi
Dr. Sandi's picture

Too bad the resource decided to renew itself when they were using it.

Fri, 03/15/2013 - 23:25 | 3334432 steve from virginia
steve from virginia's picture

 

 

 

An apt photo ... a burnout. Just like Libya.

 

Nobody asks, "Why were the debts taken on? What was the spending for?"

 

The idea is the money was spent on social programs. In fact, the money was spent on consumables: cars, spec real estate, freeways, gigantic concrete office towers, airports, 'high speed rail' projects ... and of course, hundreds of millions of barrels of expensive petroleum.

 

The euro's problems started when fuel prices started rising. Once the dollar price pushed past $50, Europe was writhing. @ $110 Europe is kaput, it's workers are idle because every bit of money goes straight into gas tanks instead of into paychecks. Driving in circles for entertainment has priority over everything else.

 

Peak oil: some country 'wins' (China) while other countries 'lose' (Syria, Egypt, Yemen, Greece, Spain ... France ... Germany ... Japan!) There isn't enough to go around, because of Europe's China trade the Continent has to compete with euro-bearing China for fuel. What a nightmare ... for both areas! If the euro dies so does China which holds a trillion or so euros worth of European debt.

 

Lenin was right, the capitalists have sold the rope with which they have hanged themselves.

 

Remember, as long as there is ONE CAR running in any of these countries their economies will continue to plunge ... and it is a long way down.

Fri, 03/15/2013 - 23:30 | 3334443 pashley1411
pashley1411's picture

Most Americans don't give a moments thought so long as the TV clicker works.

Interesting that the Germans, of all people, might pull the plug.   Future historians might well call the EU an attempted "Fourth Reich", concentrating economic wealth in Germany.   Inadvertently brought to Europe by the same deluded souls who invaded Moscow in 1812.  

Sat, 03/16/2013 - 00:10 | 3334506 joego1
joego1's picture

Cool jeep. I want it. Fuck Krugman.

Sat, 03/16/2013 - 00:30 | 3334526 chindit13
chindit13's picture

#18:  Pork found in halal meat sold in UK, Norway

Norway's USDA-equivalent found pork in kebab meat and pizza toppings that were labelled halal, and a British meat company apologized after halal chicken sausages supplied to at last one school were found to contain pork (AP).

Fatwas for everybody.

Sat, 03/16/2013 - 03:02 | 3334661 CitizenPete
CitizenPete's picture

Chill... it's the other white meat. 

Sat, 03/16/2013 - 01:30 | 3334596 observer007
observer007's picture

Cyprus gets bail out, bank customers get haircut

International lenders and Cyprus agreed a bailout deal worth 10 billion euros for the Mediterranean island early on Saturday. 

http://homment.com/cyprus-rescue-euro

Sat, 03/16/2013 - 01:56 | 3334620 shuckster
shuckster's picture

Who needs haircuts when you can just print the money to make up for the cuts. No one is the wiser and everyone pays, except you don't have to ask for approval and no one sees the line item in their paycheck

Sat, 03/16/2013 - 05:47 | 3334779 Dr. Sandi
Dr. Sandi's picture

I predict a sudden influx of Greek Barbers to our shores. With the number of haircuts they're giving, these guys should have a high level of skill and might just be looking for a new place to make a living.

Sat, 03/16/2013 - 04:03 | 3334702 Herbman
Herbman's picture

The PIGS in the Huangpu River are well underwater. 

Sat, 03/16/2013 - 05:00 | 3334745 Black Markets
Black Markets's picture

Never seen anything quite as overreaching as what just happened in Cyprus...

6.75% TAX on all bank DEPOSITS under €100,000
9.90% TAX on all bank DEPOSITS over €100,000

That's a tax grab on all bank deposits as of Midnight on the day of introduction, it's totally unavoidable and brutally unfair.

Think your money is safe in a bank? This is the biggest proof yet that at the flick of a pen, it's gone. If they need it, they will take it from you.

Sat, 03/16/2013 - 05:49 | 3334781 Dr. Sandi
Dr. Sandi's picture

My savings are under the close care of The Bank of Me.

Since only I know where the vaults are, the tax will have to be collected at a different point in the economy.

Sat, 03/16/2013 - 06:27 | 3334797 StychoKiller
StychoKiller's picture

Well, the solution is obvious:  Simply stash 100,000.00, since it's not less than 100,000 AND not greater than 100,000!  

Ain't mathematics wunnerful?!

Sat, 03/16/2013 - 05:38 | 3334772 jmcadg
jmcadg's picture

Greece is a whirlpool. And the people are getting closer to the sink hole. The quickening is happening.

Sat, 03/16/2013 - 08:29 | 3334873 css1971
css1971's picture

I bet Europe will be booming in 18 months or so. The debts are being wiped out leaving credit circulating. it sucks right now and banks should be going bust as well but it will end, and it won't take 25 years the way the Keynesian solution will.

Sat, 03/16/2013 - 09:58 | 3334947 Setarcos
Setarcos's picture

STFU about Keynes, who never advocated deficit spending on the scale that's gone on since his ideas got totally trashed by the Chicago School/Milton Freidman and the likes of Ronnie Raygun and Maggot Scratcher in the UK.

At its simplest Keynes proposed taxing during good times, so as to be able to spend during bad times, e.g. so as to keep people employed.

Sorry css1971, but you are merely spouting learned lines from whatever source you learned them from; but certainly not from reading Keynes, nor J K Galbraith, nor even Wikipedia.

At least read:  http://en.wikipedia.org/wiki/John_Maynard_Keynes  then maybe you will know how little you know about Keynes and world history.

Sat, 03/16/2013 - 09:19 | 3334924 falak pema
falak pema's picture

Patching up Cyprus mafia hole : Cyprus Bailout, Russian Angle - Business Insider

Sat, 03/16/2013 - 13:44 | 3335493 patb
patb's picture

Sounds like they need to pull out of the euro 

Sun, 03/17/2013 - 09:51 | 3337787 Sceptical Scot
Sceptical Scot's picture

" None of those countries has even gotten close to a balanced budget yet.  They are all still going into even more debt."

 

Actually, Italy runs a primary surplus, and even now has the most stable debt trajectory amongst the G7 countries. Once they get out of the euro, there will be a great buying opportunity

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