Wednesday, 5 September 2012

Europe: An Economic Black Hole Which Is 


I was traveling through Spain - miles of windmills standing still.

On Tue, Sep 4, 2012 at 7:30 PM, DONALD HANK <zoilandon@msn.com> wrote:
The forwarded message below is from a scientist friend in NC. The figures his friend quotes amazes even me, and I was predisposed to believe the efficiency was lousy. Don

: Re: Europe: An Economic Black Hole Which Is Going To Suck The Life Out Of The Global Economy

Date: Tue, 4 Sep 2012 19:25:50 -0400


A friend of mine who happens to be a well-known electrical engineer in Italy. [He was an exchange student in my class in HS in the 60's] told me when he was at our class reunion last year that the wind turbines deliver power with only 3% efficiency over long distances. He says they are a boondoggle.
Not only would the investment costs be enormous for a region that is plumb out of money, but green energy is the most expensive energy by far. On top of that, power loses wattage as it travels over long distances, so you don’t wind up with what you put into the system.

Right. What happens to Europe happens to us. Or rather, what the central planners (Eurozone, EC, IMF, etc) do to them, our central planners (Ben et al.) to do us.
Now, pay attention: Yesterday, I had sent out my translation of an article from a newsletter I get from Germany, which in turn quoted a German professional journal. It may not have seemed like much, but it was a blockbuster because for the first time, the PC German media at the highest levels were talking about the breakup not only of the euro zone but of the EU itself. They suggested that Britain should LEAVE the EU.
Why?
Two reasons I can think of:
They know the UK is sick and tired of the EU.
They also know the EU is not part of the Euro zone, so damage would be less than if a Eurozone member dropped out.
This would give a longer lease to Greece's membership. So what's in the pipeline for Greece?
A rather influential "green" NGO is now making a lot of noise about Greece becoming a "special economic zone," which would supply northern Europe with "green" energy, most likely from photovoltaic cells or wind.
This promises to be an even greater disaster than the problems with Greece's overspending and undertaxing.
The power would have to be transported by power lines over at least a thousand miles, from Greece to as far north as Germany.
Not only would the investment costs be enormous for a region that is plumb out of money, but green energy is the most expensive energy by far. On top of that, power loses wattage as it travels over long distances, so you don’t wind up with what you put into the system.
Considering the disaster that was Zapatero's "green jobs" boondoggle in Spain, a major contributor to Europe's highest unemployment rate, this Greek green power scheme could be the biggest green nail in Europe's coffin so far.
D H


Subject: 18 Indications That Europe Has Become An Economic Black Hole Which Is Going To Suck The Life Out Of The Global Economy

Summer vacation is over and things are about to get very interesting in Europe.  Most Americans don’t realize this, but much of Europe shuts down for the entire month of August.  I wish we had something similar in the United States.  But now millions of Europeans are returning from their extended family vacations and the fun is about to begin.  During August economic conditions continued to degenerate in Europe, but I figured that it wouldn’t be until after August that the European debt crisis would take center stage once again.  And as I wrote about last week, if there is going to be a financial panic, it typically happens in the fall.  The stock market has seen quite a nice rally over the summer, and many investors are nervous that we could see a significant “correction” very soon.  The month of September has been the absolute worst month for stock performance over the past 50 years, and it has also been the absolute worst month for stock performance over the past 100 years as well.  Of course that does not guarantee that anything is going to happen this year.  But things in Europe continue to get worse.  Unemployment rates are spiking, manufacturing activity is slowing down, housing prices are crashing and major financial institutions are failing.  What is happening in Europe right now appears to be an even worse version of what happened to the United States back in 2008.
But most Americans aren’t too concerned about what is happening in Europe.
In fact, most Americans don’t believe that a European financial collapse would be much of a problem for us.
Well, just remember what happened back in 2008. When the U.S. financial system started coming apart at the seams it sparked a devastating worldwide recession which was felt in every corner of the globe.
If the European financial system implodes, the consequences could be even worse.
Why?
Europe has a larger population than the United States does.
Europe has a larger economy than the United States does.
Europe has a much, much larger banking system than the United States does.
If Europe experiences a financial collapse, the entire globe will feel the pain.
And considering how weak the U.S. economy already is, it would not take much to push us over the edge.
What is going on in Europe right now is a very, very big deal and people need to pay attention.
The following are 18 indications that Europe has become an economic black hole which is going to suck the life out of the global economy….
#1 The unemployment rate in France is up to 10 percent, and the French media is buzzing about the fact that the number of unemployed French workers has now hit the 3 million mark.
#2 The French government has just announced the nationalization of its second largest mortgage lender.  Additional bailouts are likely on the way.
#3 French automaker PSA Peugeot Citroen has announced that it will be cutting more than 10,000 jobs.  But of course major layoff announcements like this are coming out of Europe almost every day now.
#4 Home prices in France are falling rapidly and the recent election of a socialist president has created a bit of a panic in the French housing market….
British people with homes in France were today warned that the property market is in ‘free fall’.
A combination of factors including the election of a tax-and-spend Socialist government means that prices are tumbling.
It means an end to the boom years, when thousands of Britons poured money into rental or retirement investments across the Channel.
#5 A slow-motion bank run is happening in Spain.  The amount of money being pulled out of the Spanish banking system is absolutely unprecedented.  The following is from a recent Zero Hedge article….
The central bank of Spain just released the net capital outflow numbers and they are disastrous. During the month of June alone $70.90 billion left the Spanish banks and in July it was worse at $92.88 billion which is 4.7% of total bank deposits in Spain. For the first seven months of the year the outflow adds up to $368.80 billion or 17.7% of the total bank deposits of Spain and the trajectory of the outflow is increasing dramatically. Reality is reality and Spain is experiencing a full-fledged run on its banks whether anyone in Europe wants to admit it or not.
If this pace keeps up, more than 600 billion dollars will be pulled out of Spanish banks by the end of the year.
Keep in mind that the GDP of Spain for all of 2011 was just 1.49 trillion dollars.
So by the end of this year we could see the equivalent of more than 40 percent of Spanish GDP pulled out of Spanish banks and sent out of the country.
In case you were wondering, yes, that is a nightmare scenario.
#6 The unemployment rate in Spain is over 25 percent.  The youth unemployment rate in Spain is well over 50 percent.  Spain is a tinderbox that could be set ablaze at any moment.
#7 The yield on 10 year Spanish bonds is up to 6.85 percent.  This is an unsustainable level, and if rates don’t come down on Spanish debt soon it is inevitable that Spain will end up just like Greece.
#8 On Monday it was announced that Spanish banking giant Bankia will be getting an emergency “cash injection”of between 4 and 5 billion euros.  Apparently “cash injection” sounds better to the politicians than “a bailout” does.
#9 The housing crash in Spain just continues to get worse.  It is being reported that some homes in Spain are being sold at a 70% discount from where they were at the peak of the market back in 2006.  At this point there are approximately 2 million unsold homes in Spain.
#10 There are persistent rumors that the government of Spain will soon be forced to officially ask for a bailout from the rest of Europe.  But who is going to bail them out?  Most of the other governments of the eurozone are on the verge of bankruptcy themselves.
#11 Manufacturing activity in Europe has contracted for 13 months in a row.  The following is from a recentReuters report….
The downturn that began in the smaller periphery members of the 17-nation bloc is now sweeping through Germany and France and the situation remained dire in the region’s third and fourth biggest economies of Italy and Spain.
“Larger nations like France and Germany remain in reverse gear… the (manufacturing) sector is on course to act as a drag on gross domestic product in the third quarter,” said Rob Dobson, senior economist at data collator Markit.
Markit’s final Purchasing Managers’ Index (PMI) for the manufacturing sector fell from an earlier flash reading of 45.3 to 45.1, above July’s three-year low of 44.0, but notching its 13th month below the 50 mark separating growth from contraction.
#12 Chinese exports to the EU declined by 16.2 percent in July.  U.S. exports to Europe have been steadily falling as well.
#13 Slovenia and Cyprus are two other eurozone members that are in desperate need of bailout money.  The dominoes just keep falling and nobody seems to be able to come up with a plan to “fix” Europe.
#14 Even the “strong” economies in Europe are being dragged down now.  For example, unemployment in Germany has risen for five months in a row.
#15 According to one recent poll, only about one-fourth of all Germans want Greece to remain a part of the eurozone.  The odds of a breakup of the euro seem to rise with each passing day.
#16 It is now estimated that bad loans make up approximately 20 percent of all domestic loans in the Greek banking system at this point.
#17 The suicide rate in Greece is more than 30 percent higher than it was last year.  People are becoming very desperate in Greece and there is no end in sight to the economic depression that they are going through.
#18 Large U.S. companies have been rapidly getting prepared for a Greek exit from the eurozone.  The following is from a recent New York Times article….
Even as Greece desperately tries to avoid defaulting on its debt, American companies are preparing for what was once unthinkable: that Greece could soon be forced to leave the euro zone.
Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency.
Every time European leaders get together they declare that they have “a plan” that will solve the problems that Europe is experiencing, but as we have seen things in Europe just continue to get worse with no end in sight.
A key date is coming up in the middle of this month.  On September 12th, Germany’s Constitutional Court will determine the fate of the recent fiscal pact and the ESM.  According to UniCredit global chief economist Erik Nielsen, if the court rules against the fiscal pact and the ESM the fallout will be catastrophic….
“If they were to surprise us by striking down Germany’s participation, I would think it’d be an utter bloodbath in markets”
But that is not the only thing that could set off a full-blown panic in the financial markets.
The truth is that Europe is teetering on the edge.
One wrong move and it is going to be 1929 all over again.
As I have maintained all along, the next wave of the economic collapse is rapidly approaching, and this time the epicenter for the crisis is going to be in Europe.
But that does not mean that things are going to be easier for the United States than last time.  We have never even come close to recovering from the last recession.  Most Americans families are just barely getting by.  In fact, 77 percent of them are living paycheck to paycheck at least part of the time.
Right now there are millions of Americans that have lost their jobs and their homes in recent years and that feelforsaken by society.
After this next wave hits us there will be tens of millions of Americans feeling the pain of economic desperation.
The last wave of the economic collapse hurt us.
This next wave is going to absolutely devastate us.
Watch what is happening in Europe very carefully.  What Greece, Spain, Italy and France are experiencing right now is going to hit us soon enough.
T


Stephanie S. Jasky,  Founder, Director - FedUpUSA.org
"America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards." -- Claire Wolfe
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Posted by Britannia Radio at 20:45