If you’re like me and you think that the next SHTF event is going to be an economic/market/currency crisis/crash then you’ve likely had your eyes on Europe over the last few months. You wouldn’t be the only one watching Europe as the markets have been on a crazy rollercoaster ride every time there’s news – good or bad – having to do with the debt crisis.
What strikes me as particularly interesting is that the Greece default is barely mentioned any more as all eyes have turned to Italy and their financial mess. Now that it’s been established that they are (almost certainly) going to default on their debt the world is already looking at the next domino: Italy.
Greek debt is somewhere in the neighborhood of 340 billion euros, which in the grand scheme of things is inconvenient, but Italy is in it to the tune of 2.6 trillion. That’s a big wad of cash.
Some people argue that the “system”, that is banks and government, won’t let Italy and the rest of Europe fail. And they might find a way to swing it for awhile, but at some point the whole house of cards is going to come tumbling down. I don’t see how it can sustain itself for more than a couple of years, but having said that the governments have been remarkably adept at keeping things afloat.
Complex Systems
The more complex the system the harder it is to determine the outcome of events. The world economy is incredibly complex and no one person or group of people have any idea of the outcome of the current situation. If you put ten brilliant economists in a room together they will come up with ten conflicting ideas of what the economy will do with very good arguments as to why they think that way.
There are so many variables and inputs that it’s nearly impossible to factor everything in. I suspect a supercomputer would melt down trying to figure it all out!
I don’t pretend to understand everything to do with the economy other than recognizing how complex it is; however, I do think it’s possible to get a general flavor of how things are going. And with the amount of debt run up by some of Europe and the United States that flavor is a lot like rotten eggs.
Who Knows?
Ultimately nobody knows for sure what will happen. Will the world economy crash sending us back to the 1800s? Will the US inflate its debt away leading ultimately to hyperinflation? Will the banks forgive all debt and reboot the economy?
Knowing the uncertainty of world politics and economics here’s what I do: I try to be ready for as many different scenarios as possible. I make friends who have like minded opinions. I stay out of debt. And last, but certainly not least, I take care of my family to the best of my ability.
Now I want to know what you think. Is European debt really a problem to the U.S.? What’s your opinion on the economy?
Share your opinion in the comments.
-Jarhead Survivor
European Debt Crisis and Market Instability
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10 comments
Well,here we are agan, Casey Jones at the helm. I say HELL WITH IT! LET IT CRASH! Then the money junkies wont have anything to do but pick up the pcs and try to organize a new swindle which wont work bcuz they no longer have any credibility.
Money is money, euros or dollars. When you have to many, of anything, chasing to few of anything, you are in deep poo-poo.
Go to the super market and buy a weeks worth of food, repeat next week and you will see the US is running approx. 10 % inflation, not zero as the Obamaite are telling us.
Our only salvation is for the next President to walk into the Oval and say” The US is cutting our budget by 50% and reducing the federal work force by 50%. t will be a rough year, but we will survive it and coming out of it better for the pain.
Also, please firer your representative and your senators. Imposed Term Limits on then.
Thanks don r
Sadly, the Eurozone crisis, with all its accoutrements, will most certainly engulf the U.S. as surely as if it were a Cat-5 tornado. There is no way we, as a functioning economy, can withstand what is to come in the next 24 months. We ourselves are most fragile already; add any form of environmental or public health anomaly, and we’ll crash on our own. Add Europe, and “falling dominoes” doesn’t begin to describe what’s going to happen.
Were certainly in the Poo and its getting smellier by the Day. Europe collapsing isn’t like Greece going belly up theres lots more dollars at stake. It will push over here and we will feel the effects. How bad will be
determined by the speed of the collapse. since 2007-2008 its been known that our economy is collapsing. What will determine the degree of calamity and of course civil unrest will be the speed and shock
of it to the average Joe. Its a little like boiling a Frog throw the Frog in boiling water and he pops right out. Turn the flame up slowly and he cooks until its too late for him too save himself. BTW were the Frogs,
Ribbit……………
Aye ladd’s, an economic crash is almost certain, before an energy crash is yet to be seen, but out of it all comes hero’s, be it a hitler style’d hero(sic) or a Regan style……. prepping will metamorph into survival….. some see it as the only way to clean out the status quo, but they are dug in like alabama tick’s…. the turmoil will be, stay strong, stay dilligent,,,,,,,,,
I’m not worried about an economic collapse. I’m concerned about the Iranian Revolutionary Guard making dares towards Isreal. If that war gets started, we will all be nuclear toast. We will get drawn in as an ally of Isreal and Iran’s big buddy Russia will have to jump in. Then Britain and so-on. Give me a good ole economic collapse any day! I will eat my preps and drink non radioactive water.
Another good reason to get out of globalization , its a failed experiment . Time for us to leave .
Interesting discussion. If the euro tanks, the U.S. dollar will tank as well. A major question with the EU right now is the extent to which the German people will continue to foot the bill for the folks in Greece and Italy who don’t want to wake up and smell the coffee.
I agree with the poster who said the bigger concern right now is Iran. If Israel gets happy feet and carries out a preemptive attack on Iran’s nuclear facility (a real possibility), the U.S. will get dragged into a protracted war–a war that we would fight against Russia.
In other news, cracks are beginning to appear in China’s economy. Their housing market is getting ready to bust. The U.S. will likely take action against money manipulation (not that we haven’t done the same thing with QE1, QE2 and so on). I expect civil unrest in China. There is just too much disparity. There are parts of China that are affluent. There are parts of China where people live on less than a dollar a day–and that’s not enough to purchase the basic necessities of life.
This will happen and it will hurt us in two different ways.
1.Our government will give huge amounts of money to the Europeans to “save” their system. It won’t work of course and fool can see that but government bureaucrats aren’t just any old fool dontcha know.
2.Our many private and not so private investments in Europe will crash and become worthless (MF Global) and large amounts of American money will simply disappear. The greatest magic trick in history since David Copperfield made a 747 disappear. It will be gone, may already be gone.
We need to go back on the gold standard .