18 Signs That The Global Economic Crisis Is Accelerating As We Enter H2 2014

Tyler Durden's picture

Submitted by Michael Snyder of The Economic Collapse blog,

A lot of people that I talk to these days want to know "when things are going to start happening".  Well, there are certainly some perilous times on the horizon, but all you have to do is open up your eyes and look to see the global economic crisis unfolding.  As you will see below, even central bankers are issuing frightening warnings about "dangerous new asset bubbles" and even the World Bank is declaring that "now is the time to prepare" for the next crisis.  Most Americans tend to only care about what is happening in the United States, but the truth is that serious economic trouble is erupting in South America, all across Europe and in Asian powerhouses such as China and Japan.  And the endless conflicts in the Middle East could erupt into a major regional war at just about any time.  We live in a world that is becoming increasingly unstable, and people need to understand that the period of relative stability that we are enjoying right now is extremely vulnerable and will not last long.

The following are 18 signs that the global economic crisis is accelerating as we enter the last half of 2014...

#1 The Bank for International Settlements has issued a new report which warns that "dangerous new asset bubbles" are forming which could potentially lead to another major financial crisis.  Do the central bankers know something that we don't, or are they just trying to place the blame on someone else for the giant mess that they have created?

#2 Argentina has missed a $539 million debt payment and is on the verge of its second major debt default in 13 years.

#3 Bulgaria is desperately trying to calm down a massive run on the banks that threatens of spiral out of control.

#4 Last month, household loans in the eurozone declined at the fastest rate ever recorded.  Why are European banks holding on to their money so tightly right now?

#5 The number of unemployed jobseekers in France has just soared to another brand new record high.

#6 Economies all over Europe are either showing no growth or are shrinking.  Just check out what a recent Forbes article had to say about the matter...

Italy’s economy shrank by 0.1% in the first three months of 2014, matching the average of the three previous quarters. After expanding 0.6% in Q2 2013, France recorded zero growth. Portugal shrank 0.7%, following positive numbers in the preceding nine months. While figures weren’t available for Greece and Ireland in Q1, neither country is showing progress. Greek GDP dropped 2.5% in the final three months of last year, and Ireland limped ahead at 0.2%.

#7 A few days ago it was reported that consumer prices in Japan are rising at the fastest pace in 32 years.

#8 Household expenditures in Japan are down 8 percent compared to one year ago.

#9 U.S. companies are drowning in massive amounts of debt, but the corporate debt bubble in China is so bad that the amount of corporate debt in China has actually now surpassed the amount of corporate debt in the United States.

#10 One Chinese auditor is warning that up to 80 billion dollars worth of loans in China are backed by falsified gold transactions.  What will that do to the price of gold and the stability of Chinese financial markets as that mess unwinds?

#11 The unemployment rate in Greece is currently sitting at 26.7 percent and the youth unemployment rate is 56.8 percent.

#12 67.5 percent of the people that are unemployed in Greece have been unemployed for over a year.

#13 The unemployment rate in the eurozone as a whole is 11.8 percent - just a little bit shy of the all-time record of 12.0 percent.

#14 The European Central Bank is so desperate to get money moving through the system that it has actually introduced negative interest rates.

#15 The IMF is projecting that there is a 25 percent chance that the eurozone will slip into deflation by the end of next year.

#16 The World Bank is warning that "now is the time to prepare" for the next crisis.

#17 The economic conflict between the United States and Russia continues to deepen.  This has caused Russia to make a series of moves away from the U.S. dollar and toward other major currencies.  This will have serious ramifications for the global financial system as time rolls along.

#18 Of course the U.S. economy is struggling right now as well.  It shrank at a 2.9 percent annual rate during the first quarter of 2014, which was much worse than anyone had anticipated.

But if U.S. economic numbers look a bit better for the second quarter, that doesn't mean that we are out of the woods.

As I have stressed so many times, the long-term trends and the long-term balance sheet numbers are far, far more important than the short-term economic numbers.

For example, if you went to the mall today and spent a thousand dollars on candy and video games, your short-term "economic activity" would spike dramatically.  But your long-term financial health would take a significant turn for the worse.

Well, when we are talking about the health of the U.S. economy or the entire global financial system we need to keep the same kinds of considerations in mind.

As for the United States, whether the level of our debt-fueled short-term economic activity goes up a little bit or down a little bit is not what is truly important.

Rather, the fact that we are nearly 60 trillion dollars in debt as a society is what really matters.

The same thing applies for the globe as a whole.  Right now, the citizens of the planet are more than 223 trillion dollars in debt, and "too big to fail" banks around the world have at least 700 trillion dollars of exposure to derivatives.

So it doesn't really matter too much whether the short-term economic numbers go up a little bit or down a little bit right now.  The whole system is an inherently flawed Ponzi scheme that will inevitably collapse under its own weight.

Let us hope that this period of relative stability lasts for a while longer.  It is a good thing to have time to prepare.  But you would have to be absolutely insane to think that the biggest debt bubble in the history of the world is never going to burst.

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NoDebt's picture

I'm so glad none of this stuff can affect the prices of my stocks any more.  Imagine if the "real economy" mattered to the prices of stocks like in the old days, before the Fed showed us the way to a permanently high plateau in asset prices.  It would be a disaster.

Tinky's picture

Amen. And the Fed's ability to carefully manage inflation is also a godsend. 

What could go wrong?

max2205's picture

If it gets worse, will NFLX go even higher....thought so

Overfed's picture

I was just thinking that we were overdue for a list of X reasons why something is bad.

Savyindallas's picture

If we would have just let the fed run everyting in the past we would never had had recessions, wars or maybe even bad weather. Shouldn't we just disband the Congress- we all know they are worthless sex fiend criminals, anyway. 

Lore's picture

Thank goodness the globe is cooling.

TeethVillage88s's picture

If we just shut down congress for 2 years, we would prevent much more damage and they would have to reorganize all over again before passing major legislation. Probably a $50 B Dollar money saver.

Except we probably want to repeal Obama Care and get DOJ to press charges on Eric Holder to start "Real" clean up.

surf0766's picture

How many 18 signs could their possible be? Am I in the matrix or have I see this article written 10 times before?

Seasmoke's picture

Did you just see a black cat walk by twice ???

Crawdaddy's picture

watch out for the deja vu moment - that is when they change something

Kprime's picture

its already happend, they said it was different this time


Colonel Klink's picture

They're bricking off all the exits.

booboo's picture

No but I ate some home made cookies some black chick gave me and I feel right as rain but I think I passed out and that rain was yeller and salty tasting.

surf0766's picture

The only way to win is to not play the game

Ness.'s picture

It's a good thing I didn't start tattooing the 'signs of economic collapse' on my body because this "new" list might have to go on the taint.  Ouch!


Lore's picture

At least you know where to put the Dollar Sign...

JustObserving's picture

It shrank at a 2.9 percent annual rate during the first quarter of 2014

Right now, the Federal Reserve tells us that the inflation rate is sitting at about 2 percent.

But according to John Williams, if the inflation rate was calculated the same way that it was in 1990 it would be nearly 6 percent.

And if the inflation rate was calculated the same way that it was in 1980 it would be nearly 10 percent.

So actually Q1 GDP decreased by 6.9% to 10.9% if one uses honest inflation numbers.

The Federal Reserve would have us believe that the unemployment rate in the U.S. has fallen from a peak of 10.0 percent during the recession all the way down to 6.3 percent now.

But according to shadowstats.com, the broadest measure of unemployment is well over 20 percent and has kept rising since the end of the last recession.


CheapBastard's picture

Shrinking is what I see on the street also, in malls, stores, and so on. Sound smore like reality.

TeethVillage88s's picture

Yes, John Williams is the best source.

From the article above: "Rather, the fact that we are nearly 60 trillion dollars in debt as a society is what really matters."

I observe that the Budget for DHS is about $60 Billion Dollars almost as if Homeland Police are calculated based on a Percentage of the overall Debt of the USA.


Bunga Bunga's picture

Get over it, the term 'Economic Crisis' is meaningless in central planning.

DirkDiggler11's picture

# 19 Michael Snyder's nail gun suddenly turns against him like Cujo and Michael "Nail Guns" himself to death just before the great collapse he had been calling for the past decade begins to unfold...

CrashisOptimistic's picture

Nah.  Nailgun will tatoo a list all over his body of 23 places to buy nails.

FieldingMellish's picture

Things are going great....




1. GM is "selling" vehicles hand over fist.

2. Markets are at all time highs.

3. The Fed Reserve continues to tighten its monetary policy by tapering its asset purchases.

4. Reverse repo's are successfully draining excess liquidity.

5. All the major banks have been thoroughly stress tested and found to be in rude health.

6. Unemployment is sinking fast.


I could go on and on but I'm waiting for my next government check...


drendebe10's picture

...and if yhe corrupt incompetent arrogant narcissistic illegal indonesian kenyan aluen muslim sciopayhuc liar in chief says its great and the bullsh*t MSM agree then it sure must be so..

CheapBastard's picture

"There's never been a better time then now to buy a house."


You forgot that one, Fielding.


The stock market is not the only thing that has reached ‘all time highs’ in Merika:


...obesity, diabetes, cancer, strokes, EBT users, indifference, poor test scores, fraud, CEO compensation, DC BS, …and so on. They are also at their 'all time highs.'

NoPension's picture

How come the "new GM" has to recall and fix cars made by the "old GM"?

meterman's picture

Because there is no "New GM". The "Old GM" is still alive and sinking due to the brilliant decisions of our own "First Idiot", Obama, to save the unions by avoiding bankruptcy and the protections it provides. All GM's sins still exist and must be delt with by GM. Watch the crying and gnashing that occurs as the "NEW" Government Motors is devoured by its own slim. 

Note:  Of course, Obama will tell the world that the GM failure is not his fault,but,"What's New".



AllWorkedUp's picture

and yet...the stock market makes high after high and gold goes nowhere. Is there anything new under the sun?

intric8's picture

If thats not enough, our little stunt in ukraine has sent world sentiment against the u.s. past the tipping point. How the hell will economic activity positively respond to reduced trade, the attack on the usd, protectionism and the resurgence of imperialism? I dont see any fucking way out of this mess in any reasonable time-frame unless a massive reboot takes place, and thats tantamount to an huge, ugly revolution where many die and decades of infighting and starvation ensue.

overmedicatedundersexed's picture

intric8, WTF? graph the debt and loss of quality of life of the ave middle class in america, since the dropping of tariffs and advent of Free Markets, as you have stated international corps have grown wealthy and powerful, yet tariffs and protectionism is bad?? i repeat WTF?

Jack Burton's picture

Come on! Are you gonna tell me the US stock markets are asset bubbles?

Oldwood's picture

I've given up on trying to call this thing. Anything I would do would only prove contrarian. I can say that I have never bought stock accept at the very top. Never has it gone up after I bought in. I would like to believe that I'm the grim reaper of markets and that buying in could bring it all down, but in reality I'm simply a bad investor.

For that reason I don't think we are at the top. I haven't bought in yet. If I finally can't take my .5% returns on my saving any longer, when I can't watch while the markets reach all new highs, when I actually buy in because I think its the thing to do....then it will crash. I can't make it crash, I am simply the canary in the mine shaft.

I will not buy stocks until EVERYONE else has.

I will not buy gold until EVERYONE else has.

I will not invest until everyone else is ready to get the fuck out.

AllWorkedUp's picture

Oldwood - you're not alone. I'm pretty sure they've devised individual programs for individual accounts that go counter to whatever you buy. It is a rare occasion when i buy a stock and it doesn't immediately drop 10% within hours or a few days. Very rare.

Oldwood's picture

It does feel rigged against me.

I purchased a high performance car once because I have always had that weakness. I knew I had the weakness, but what caught me off guard was that I was researching the car on the net afterwards and after reviewing the manufacturer's site discovered that they had metrics of their target market, they had me to the year of my age and $10k of my income. I hate being that predictable, but we live in a world where people are studying us intensely, try to both motivate us and anticipate our every move. I feel like a rat in a cage.

espirit's picture

Heh, everytime I do a signup access online I add a year, month, and day cumulative to my birthdate.

That way I receive online "specials" every month.  Win /Win.

Bemused Observer's picture

I bought stock once, in 2009, at the all-time lows, in fact, the exact DAY of the low. Three years later, I was totally out. I made what you'd call a killing, if only on the micro-scale.

I have not gone back. I missed the "big rally" I guess, but have never regretted bailing on the market. And I have been relentlessly pursued by my old accounts to "Come back, we miss you!"..."We'll give you gifts, c'mon puleeeeeese? Don't you WANT to be rich?"...

It's almost too 'needy'...and a bit like being pursued by a cult after you've left. It is off-putting, and a bit creepy. It's like you can SEE how crazy they are now that you are out. When I see this market going up on nothing but hot air, it scares me even though I'm now back on terra firma.

1000924014093's picture

Well, uh, do keep us posted then, won't you?

Addibrux's picture

 Sleeper is right. Good Grief. If you're not making money in this cluster-f@ck, you've got to be trying NOT to..Of course it's going to end ugly, but for now play to win, and invest some of those into the non-tangibles.

 I've expected the peak for two years now, but that still doesn't mean quit playing. This is, after all, predatory capitalism. I think alot of the ZH'rs completely underestimate the velocity of stupidity. Get ready, by all means, but there's still vast money to be made from the masses.

Caviar Emptor's picture

The wall of worry is gone! If things are truly getting worse then it's not just worrying anymore

AdvancingTime's picture

Modern Monetary Theory often referred to as MMT to its many believers removes much of the risk ahead and guarantees that we will always be able to muddle forward. MMT also known as neochartalism is a economic theory that details the procedures and consequences of using government-issued tokens and our current units of fiat money.  Newly acquired tools like derivatives and currency swaps  allow us to print and  manipulate away problems.

While reading an article about the growth of debt in China's non-financial sector I was forced to reflect on how debt is effected by the interest rates. In Europe the ECB had to step in to halt the economic collapse of Spain, Italy and several other countries that were on the brink. What you pay in interest on debt does matter except in the manipulated land of MMT. Have we been lulled into complacency by the extraordinary actions taken by central banks and governments over the last six years? This is a key question we must face. More on this subject in the article below.




Totentänzerlied's picture

"people need to understand" the exponential function, and diminishing marginal utility.