Germany has signalled it is preparing a third rescue package for Greece – provided the debt-stricken country implements “rigorous”austerity measures blamed for record levels of unemployment and a dramatic drop in GDP.
The new loan, outlined in a five-page position paper by Berlin’s finance ministry, would be worth between €10bn to €20bn (£8bn-16bn), according to the German weekly Der Spiegel, which was leaked the document. Continue reading
The world is one financial downturn, one major terrorist attack or one regional war away from collapse. 9/11 happened when the U.S. was on the brink of another economic bubble whereas the downturn of 2008 was a bubble created during the Clinton years in which it was only a matter of time before it popped.
As matters stand, the next recession will push the Western economic system over the edge into deflation
Half the world economy is one accident away from a deflation trap. The International Monetary Fund says the probability may now be as high as 20pc.
It is a remarkable state of affairs that the G2 monetary superpowers – the US and China – should both be tightening into such a 20pc risk, though no doubt they have concluded that asset bubbles are becoming an even bigger danger. Continue reading
Don’t believe the happy talk coming out of the White House, Federal Reserve and Treasury Department when it comes to the real unemployment rate and the true “Misery Index.” Because, according to an influential Wall Street advisor, the figures are a fraud.
In a memo to clients provided to Secrets, David John Marotta calculates the actual unemployment rate of those not working at a sky-high 37.2 percent, not the 6.7 percent advertised by the Fed, and the Misery Index at over 14, not the 8 claimed by the government. Continue reading
Berlin – The troika of international lenders “held a gun to the head” of Cyprus and Portugal and showed little sympathy for social measures, an MEP looking into its work has said.
“Both countries had very little room for manoeuvre in negotiating the terms of the bailouts. What they said basically was that ‘a gun was held to our head’, especially in Cyprus,” Juergen Klute, a left-wing German MEP, told this website.
“And the troika had very little interest in social measures, they were only concerned about cutting back the deficit,” he added.
The German politician said his four-member European Parliament delegation found there was a lack of democratic oversight when it came to the work of the troika – made up of the European Commission, the European Central Bank (ECB) and the International Monetary Fund. Continue reading
European Central Bank head Mario Draghi says Japanese-style stagnation possible amid high unemployment and falling inflation
The European Central Bank sent the euro tumbling on world markets after it warned that the 18-member currency zone may need further support to prevent a Japanese-style period of stagnation.
The ECB president, Mario Draghi, said persistently high unemployment, falling inflation and difficult lending conditions were harming the recovery, and the ECB stood ready to use all the tools available to maintain confidence and growth. Continue reading
Spain saw its youth unemployment rate rise to a staggering 57.7% in November as the country registered the worse youth jobless rate in the eurozone area.
Eurostat, the statistical information arm of the European Union, also revealed the youth unemployment rate across the eurozone remained steady at 24.2% for the second consecutive month – meaning there were 3.5 million unemployed under-25s across the region.
“There is a real danger that these young people will get trapped in the ranks of the long-term unemployed,” James Howat, a European economist at Capital Economics, told IBTimes UK. Continue reading
Christine Lagarde, the IMF’s managing director, says it is premature to declare the eurozone crisis over
The International Monetary Fund has poured cold water over claims that the eurozone is safely recovering, calling on the European Central Bank to take pre-emptive action to alleviate the credit crunch for small business and head off the risk of deflation. Continue reading
“Learn a trade in the European Army. Send your applications to the following email or postal address…” Such slogans do not yet appear on posters displayed in the metros of Berlin, Rome, Warsaw or Madrid. Yet, if the EU did have its own army, it would be the biggest recruiter on the continent and an important provider of jobs, both direct and indirect. Continue reading
WASHINGTON (AP) — Four out of 5 U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.
The findings come as President Barack Obama tries to renew his administration’s emphasis on the economy, saying in recent speeches that his highest priority is to “rebuild ladders of opportunity” and reverse income inequality. Continue reading
Downtown Detroit has long been one of the nation’s worst housing markets. Home values have plummeted. Vacancies abound. And foreclosure numbers are through the roof. Not that that’s surprising; who’d want to live in a neighborhood with soaring unemployment and the highest rate of violent crime in the US?
That might deter most prospective home buyers. But some look at Detroit’s hard times and see profit.
Specifically, bargain-hunting Chinese investors. Since the bankruptcy was announced on July 18, talk of snapping up Detroit housing for a pittance has picked up on Sina Weibo (link in Chinese), reports Sina Finance. And it appears to be translating into real interest; Caroline Chen, a real estate broker in Troy, Michigan, says she’s received “tons of calls” from people in mainland China. Continue reading
Germany’s chancellor Angela Merkel has a simple message for the millions young people in the eurozone who are out of work – move.
In an interview, Mrs Merkel said the high levels of youth unemployment in Europe represent a “huge crisis”, comparing the eurozone’s difficulties with post-Communist eastern Germany.
Speaking to the BBC, she said that when unemployment soared after the fall of the Berlin Wall, “many young people … only had jobs because they moved to the south.” Mrs Merkel said: “I think it’s unfair that it is the young people especially who have to pay the bill for something they didn’t do. Continue reading
This is no time to be complacent. Massive economic problems are erupting all over the globe, but most people seem to believe that everything is going to be just fine. In fact, a whole bunch of recent polls and surveys show that the American people are starting to feel much better about how the U.S. economy is performing. Unfortunately, the false prosperity that we are currently enjoying is not going to last much longer. Just look at what is happening in Europe. The eurozone is now in the midst of the longest recession that it has ever experienced. Just look at what is happening over in Asia. Economic growth in India is the lowest that it has been in a decade and the Japanese financial system is beginning to spin wildly out of control.
One of the only places on the entire planet where serious economic problems have not already erupted is in the United States, and that is only because we have “kicked the can down the road” by recklessly printing money and by borrowing money at an unprecedented rate. Unfortunately, the “sugar high” produced by those foolish measures is starting to wear off. We are going to experience a massive amount of economic pain along with the rest of the world – it is just a matter of time.
But for the moment, there are a lot of skeptics out there. Continue reading