22 Reasons Why We Could See An Economic Collapse In Europe In 2012

Will 2012 be the year that we see an economic collapse in Europe?  Before you dismiss the title of this article as “alarmist”, read the facts listed in the rest of this article first.  Over the past several months, there has been an astonishing loss of confidence in the European financial system.  Right now, virtually nobody wants to loan money to financially troubled nations in the EU and virtually nobody wants to lend money to major European banks.  Remember, one of the primary reasons for the financial crisis of 2008 was a major credit crunch that happened here in the United States.  This burgeoning credit crunch in Europe is just one element of a “perfect storm” that is rapidly coming together as we get ready to go into 2012.  The signs of trouble are everywhere.  All over Europe, governments are implementing austerity measures and dramatically cutting back on spending.  European banks are substantially cutting back on lending as they seek to meet new capital requirements that are being imposed upon them.  Meanwhile, bond yields are going through the roof all over Europe as investors lose confidence and demand much higher returns for investing in European debt.  It has become clear that without a miracle happening, quite a few European nations and a significant number of European banks are not going to be able to get the funding that they need from the market in 2012.  The only thing that is going to avert a complete and total financial meltdown in Europe is dramatic action, but right now European leaders are so busy squabbling with each other that a bold plan seems out of the question.

The following are 22 reasons why we could see an economic collapse in Europe in 2012….

#1 Germany could rescue the rest of Europe, but that would take an unprecedented financial commitment, and the German people do not have the stomach for that.  It has been estimated that it would cost Germany 7 percent of GDP over several years in order to sufficiently bail out the other financially troubled EU nations.  Such an amount would far surpass the incredibly oppressive reparations that Germany was forced to pay out in the aftermath of World War I.

A host of recent surveys has shown that the German people are steadfastly against bailing out the rest of Europe.  For example, according to one recent poll 57 percent of the German people are against the creation of eurobonds.

At this point, German politicians are firmly opposed to any measure that would place an inordinate burden on German taxpayers, so unless this changes that means that Europe is not going to be saved from within.

#2 The United States could rescue Europe, but the Obama administration knows that it would be really tough to sell that to the American people during an election season.  The following is what White House Press Secretary Jay Carney said today about the potential for a bailout of Europe by the United States….

“This is something they need to solve and they have the capacity to solve, both financial capacity and political will”

Carney also said that the Obama administration does not plan to commit any “additional resources” to rescuing Europe….

“We do not in any way believe that additional resources are required from the United States and from American taxpayers.”

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5 thoughts on “22 Reasons Why We Could See An Economic Collapse In Europe In 2012

  1. It seems to me that if the ordinary man is ever to share in the truly vast wealth available to the entire world, any and all discussion around economics and finance should be couched in terms that actually mean something and in a language that anyone with a basic education could understand. Have you ever noticed how the professions, such as banking, law, medicine etc. keep the ordinary person at arm’s length and bewildered by the perversely complex terminology they constantly employ? This is of course, entirely intentional. It is designed to keep the rest of us in the dark. Most of us are so overwhelmed by the prospect of reading the daily “small print” (how many of us even read, let alone comprehend the T’s & C’s we encounter?) we’d rather entrust our affairs to these academics and hope for the best. Yet, I can’t help feeling that it all has to change. For too long, those in power have disenfranchised the rest. The only way that can be changed is if people stand up and demand such change. It strikes me that in so many ways, Kiwis are too “nice”, (perhaps too complacent?).
    To return to my earlier remark, I am of the firm belief that there is abundant wealth in the world – it’s just that for too long it’s been in the grasp of the few. Those few are so terrified of losing what they have, they feel they have to go to the most immense and outrageous lengths to hold on to it. They demonstrate the worst excesses of the collective human ego, through behaviours that are in fact parasitic. There really is no place for parasitism on any level of human endeavour if a new age of real progress is to dawn from the chaos of the old.
    Ghandi once said something to this effect:
    “How can 100 thousand British civil servants stand against 600 million Indians?”
    Though our numbers are little more than 4 million, the ratio still far outweighs those in “power” in our small country. How long would it take to bring about positive change if enough determined people got to work in creative, constructive, nonviolent ways?
    If blogs like this aren’t there to afford opportunities for that kind of networking, what are they for???

    • My blog is about informing people Steve. People can read it and take it as they want. I am happy to give people a platform to express themselves and meet other like minded people but please don’t tell me what to do with my blog.

  2. S’funny, the debt funny munny. I wonder what would happen if all debt everywhere was written off? Every little last bit? Would that sort the mess out, so we can start all over gain. Ulp. What did I just say? ;)

  3. Germany are printing deutsche marks…?

    http://tiny.cc/ne0a2

    If they finally perceive the rest of Europe to be too much of a drag on their economy, they may take the lead by ditching the Euro. it may be the only sensible thing to do.

  4. The US is having enough trouble agreeing on debt limits as it is without bailing out Europe. Europe may not like it, but Germany may have to take the lead and have a greater influence going forward.

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