News and Society Blog-Economics: When Europe's Economy Does ...

Some folks have stated that it is possible that Europe can get through this economic crisis without imploding, but I tend to disagree with that assessment. And each time the EU works to shore up one of its challenges in its banking sector, with its currency, or in negotiation with one of the countries known as the PIIGS (Portugal, Italy, Ireland, Greece, and Spain) - all I notice is that proverbial can being kicked farther down the road. In fact, it is adding insult to injury for bondholders, investors, and it is causing chaos on the global market.

China has already lost a huge amount of exports and retracted from its 10% year-over-year growth goals, and is now looking at more like 7% growth. It is quite possible that they will not even attain that, even at a time when their 12-year plan calls for producing 100 million more jobs in rural China, amongst other things such as; taking over the alternative energy sector, the aerospace industry, the information technology industry, and the auto industry from the rest of the world.

Those are pretty lofty goals, and one might have been worried about all that, but with the European crisis cutting into their export numbers, and severely curtailing their growth, it looks doubtful. Further, China has its own worries such as all of those bad loans which occurred during their stimulus after the global financial crisis, and the pervasive corruption in their cronies state-run capitalist system. So, they won't be bailing out the EuroZone and all the talk of such is a mere fantasy.

Of course, China isn't the only one who has a challenge, Japan isn't batting 1000 either, and their economy is intermixed with the EU, along with both of their banking systems.

And if you think the United States is free for harm, you would be wrong. Not only is the United States, Japan, and China all on the hook for the IMF, they've also agreed to work with Europe to help save it. Is it even possible?

The problem is so vast, and so deep, and many of the nations in the Euro zone are not economically viable, they don't take in enough tax revenue to support their governments, and exist, much less deliver on their socialist promises to the masses based on borrowed money, and now they are on severely borrowed time. Even if their debt was washed out, they still would be a future risk - is what I am saying - they are not viable, or temporarily sustainable for that matter.

Standard & Poor's downgraded six of the top US banks based on their exposure to European debt, and due to the inter-banking system, which leaves everyone on the hook. If Europe goes down, and fully Implodes, it could take the whole rest of the world with it. We should just be glad here in the United States that we will not be hurt as bad as the others, but we will not come out completely unscathed. Indeed I hope you will please consider all this and think on it.

Lance Winslow has launched a new provocative series of eBooks on Future Concepts. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank; http://www.worldthinktank.net

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Source: http://newsandsocietyblog-economics.blogspot.com/2012/02/when-europe-economy-does-fully-implode.html

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