Dismal Scientist (r) on Dismal European Numbers

I went looking for some numbers on European economic performance. Per the “talking heads” on financial news shows, things are a bit slow, but not all that bad, and getting better and it’s all going to be rosy Real Soon Now… but I suspected that the Network News was “in the bag” for liberal causes and then CNBC / CNBC World tend to be too (though their basic financial facts tend to be accurate). Fox is always ranting about things, so hard to figure what is news and what is rant some times. Fox Business did some Tsk Tsking, but not a lot of numbers. Mostly, I think, since they presume Americans are mostly just interested in America… and that may be right… But doesn’t help me. They go to ‘infomercials’ during European market opening hours prep, then do “Imus in the morning” shock jock happy talk. Very much non-useful for money issues or European economic perspective…

So I figured I was “on my own” to dig up just what the present status really is.

I found an article that more or less explained the Italian election. 25% ‘undecided and unhappy’ going into the vote. Polling forbidden in the last week, so lots up in the air. The “austerity” candidate in last place and the ‘crazy uncle’ protest candidate scoring high. The “old guard” and “bunga bunga” party and connections candidate(s) being so “how can I miss you if you won’t go away?”. And the economy being dismal and getting worse.

This was in the context of European new car sales being well down.

So with “Let’s just leave the EU” leading by about 3:1 in the UK and with Italy having a similar rising tide, durable goods sales down, and folks peeved; I wondered “Can I get some numbers to tell me if folks are likely to feel better soon?” Which lead to the following pages / sites and their dismal numbers.

Economics is called “The Dismal Science”. (Largely due to Malthus being one of the very first economists). Turns out one party has registered “The Dismal Scientist” ;-) They also bagged the site name “economy.com”. Moody’s Analytics. Gotta like that style.

http://www.economy.com/dismal/outlook/country.aspx?geo=IESP

Gives their present outlook on Spain. It looks like one of those links that is likely to change over time as new updates arrive, so not sure it will show the same thing in a few weeks as it shows now. So I’ll quote or paraphrase the big lumps. They have some really nice graphs that I’m not going to reproduce here, so please hit the link to see them.

First off, Spain is in a deepening recession.

The Spanish economy contracted by 0.3% in the third quarter of 2012 from the previous stanza when it retreated by 0.4%. Private consumption contracted by 0.5%, while investment plunged by 1.4%. The Spanish economy will face a tough time ahead, and we expect GDP to shrink through 2012 and 2013. This will make it hard for the government to achieve its already-revised fiscal deficit targets, and we cannot rule out the authorities in Madrid turning to the EU for help in dealing with high government borrowing costs, after they have already asked for a banking sector bailout.

That’s a bit misleading as ‘contracting by 0.3%’ in the quarter is the delta from an already shrunken status. That’s a 1.2% per year rate of shrinkage on top of shrunken. The graph shows them declining steadily from year ago values, that were themselves none too swift. So the government not going to make it on deficits, more EU bailout to be needed, shrinking economy, Same Old Same Old.

The unemployment graph continues rising from “lower left to upper right” and is at 26% now. Lord knows what it is for selected groups like young folks or less well off / well educated. And no end in sight to the increases.

Spain’s unemployment rate jumped to a record high of 26% in the fourth quarter of 2012 from 25% in the three months to September. The jobless rate had been climbing since the second quarter of 2007, when it stood at 8%. With the economy in a double-dip recession, unemployment will continue to climb in the coming quarters. Rising joblessness will make it harder for the government to achieve its fiscal deficit targets.

Harder? How about impossible?

Industrial output dropping too.

Spanish industrial production deteriorated further in December. Industrial output fell 6.9% in year-ago terms, adjusted for working days, following a 7% decline in November. Industry will be under pressure into 2013, [...]

Those numbers are frightening, and I don’t scare easy. We’re talking “Spiral decent into hell” behaviour here. Dropping production (and taxes) leading to lower employment (and taxes) leading to lower buying (and taxes) leading to lower demand and production leading to… while the government gets ever lower tax take at each turn of the cycle so higher deficits and borrowing and taxes… Looks terminal based on the numbers.

The “sidebar” table says bank lending is down over 10% and retail sales are down over 10%. House prices down 9.8% so a little less dismal ;-)

What about Greece?

http://www.economy.com/dismal/outlook/country.aspx?geo=IGRC

Unemployment at 25% and rising steadily. Real GDP dropping 6% year over year (and last year was not good…) 12 Month moving ‘sum’ of trade, down about 10%. Some good news. Inflation dropping from 10% toward 2%; but that rate of decline needs to slow down or we are talking hitting the deflationary implosion of asset values. The industrial production graph looks like a nice rising from lower left to upper right… until you realize it starts at -12% and rises to zero. So down a lot and just laying there quivering now. Retail sales off 15%.

All in all, another moribund and getting worse situation.

Italy is “less bad”

http://www.economy.com/dismal/outlook/country.aspx?geo=IITA

Unemployment dropping from 10.9 to 9.8 %. Real GDP that had been down about 0.7% for three quarters in a row, only down 0.2% this quarter (compared to last year that was down 0.1% from prior…) Industrial production down 7% from year ago, but up 0.4% month over month; and with a positive balance of trade. They imply it might not last, though, as the currency relative value that made it happen has now reversed.

Italy’s foreign trade balance improved in December thanks to a jump in exports to countries outside the euro zone and weakening imports. Italy reported a not seasonally adjusted surplus of €2.2 billion in December, following a €1.4 billion deficit in the same month last year. The 18% depreciation in the value of the euro from May 2011 to July 2012 supported goods exports and helped rebalance the Italian economy. The euro’s recent gains, however, pose a risk for the Italian economy in coming months.

Germany was doing “OK” but the surprise for me was France.

http://www.economy.com/dismal/outlook/country.aspx?geo=IFRA

I had not expected such a rapid response to the stupid tax policies and the shift to a socialist leaning leadership.

France’s economy contracted 0.3% q/q in the three months to December, following a revised 0.1% expansion in the previous quarter. The main drivers were weaker fixed investment and exports.

From weak growth to contraction in one quick step. Unemployment 10.3% and rising nicely. Industrial production back to falling, if slowly for now.

Industrial production in France fell 0.1% m/m in December, seasonally adjusted, following a 0.5% increase in the previous month. The main driver was weaker energy production. Moody’s Analytics and the Bloomberg market consensus had forecast declines of 0.5% and 0.3%, respectively. Demand for local products will remain under pressure from the strong euro and weak economic activity, tight credit, and rising unemployment in France and its key euro zone trading partners.

Then topped off with a ‘greater than 5 Billion Euro trade deficit’.

What does it all mean?

To me it looks like “more of the same and getting worse” for the places outside Germany. Unless the rest of the Euro Zone is doing really well, like Germany, this is going to get ugly. I just don’t see who or what will pull France, Italy, Spain and Greece out of their decent. Their governments are not helping, and Italy is likely to vote to make things worse (as they don’t like the “Austerity” guy they have now). I see little to help Spain and Greece suddenly reverse (and shoving more money at less productivity doesn’t fix it, even German money). France is already going into hock to buy stuff from outside; and is learning that higher tax rates lead to lower tax take. Again.

So looks to me like a pretty dismal prospect. Especially with the Euro relatively strengthening and the Yen in freefall. Why by a Phillips TV if a Panasonic is cheaper? Why buy an Italian motorcycle if Honda is dropping? Why take a vacation in expensive Euro land when Yen buy plenty of hotel? (And why buy German polymer if Japanese polymer is just as good and lower priced…)

So the Euro Zone may want to avoid a “competitive devaluation”, but I don’t see how they can hold out. Italy is already talking exit and Greece may not have any choice if things keep doing what they are doing.

That also means Europe is going to be an ever less vigorous customer for China. So China will have less money to invest. With the USA buying everything on credit, the net real wealth is just not showing up. At some point China will not be able to buy more Africa and Australia and Canada while still having money to fund internal growth AND loan it to the USA at $Trillion a year.

The rest of the global economy is tinker toy sized compared to the EU, USA, Japan, and China. And much of THAT is dependent / derivative. (Australian and Canadian mineral and energy sales to China, for example. Or Latin sales of minerals and oil to the USA.)

So I’m just having a little bit of trouble seeing where anyone is being frugal, living inside their means, has excess money to invest, and has customers paying in something other than evaporating promises. EU is on life support (other than Germany). USA is in debtors prison and maxing out the credit card pronto. Japan is moribund and doing a massive pay cut via devaluation. China depends on all of them to buy stuff and transfer wealth, but there is ever less wealth to transfer and ever more printed paper.

Is it just me? Does anyone else see some hope in all this?

All I’m seeing is a whole lot of “print and pray” and not a whole lot of “wealth creation” and real growth. More folks “going Galt” as the government burden gets too high and fewer carrying the load. Is anyone other than Germany in a condition to carry the EU? Will Germany keep on doing it? Can China keep on buying German cars to support Germany when it involves using either Euro from European sales that are dropping or $US that nobody will want as it shrinks? Can there be a China / Germany productivity axis that lets the rest of the world have a free ride on their loans? I don’t see that as “sustainable”…

So I’m going to be watching that Italian election closely. (Next Sunday?) And I’ll likely check those Dismal Scientist (r) links each month for a while to see if the downtrend continues, or slows / reverses. Toss in a USA “cluster congress” on the “sequester” and a Dimocrat “politics first, nation be damned” scorched economy policy; well, I’m feeling a bit dismal about all this stuff too. Prices of everything are rising in the USA, so not a lot of added money in the pockets of consumers here to make the whole thing work either. I don’t see a consumer lead recovery anchored in the USA spreading over the globe. But will be watching the Sequester Snarkfest unfold and “the lose/lose choice” of continued massive debt explosion vs sudden government expenditures hitting the wall.

There’s got to be something positive out there. But I’m sure not seeing it. Maybe it’s in Latin America… but with Bolivia doing ongoing Nationalizing, Ecuador reelecting their Socialist President, Argentina going for more riots, and Brazil doing the Socialism Stagnation dance, that means only a few small ones left to be doing well.

Oh Well. Maybe next month things will be better… “This time for sure!” Or maybe we can round up some more Central Banks to print more paper to hire more folks to work for the government…

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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37 Responses to Dismal Scientist (r) on Dismal European Numbers

  1. nickleaton says:

    There are people being frugal. It’s just that governments have fiscal incontinence.

    I’ve been doing some digging around in the UK.

    Accrued pension debts have a present value of 5,300 bn on top of the 1,100 bn borrowing, (and other debts).

    That’s 7000 bn of debt, on taxes of 550 bn, and spending of 700 bn. They are bust.

    Now, I managed to get a reply for an FOI request the other day. The reason they have left the pensions debts off the books is that they have decided there is just a 50% chance of paying out the pensions.

    Simply put, the states across Europe are bankrupt.

  2. Ian W says:

    Unemployment stats for Europe are here:
    http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Unemployment_statistics

    “In December 2012, 5.702 million young people (under 25) were unemployed in the EU-27, of whom 3.624 million were in the euro area. Compared with December 2011, youth unemployment increased by 237 000 in the EU-27 and by 303 000 in the euro area. In December 2012, the youth unemployment rate was 23.4 % in the EU-27 and 24.0 % in the euro area. In December 2011 it was 22.2 % and 21.7 % respectively. In December 2012 the lowest rates were observed in Germany (8.0 %), Austria (8.5 %) and the Netherlands (10.0 %), and the highest in Greece (57.6 % in October 2012) and Spain (55.6 %).

    In November 2012, the unemployment rate in the USA was 7.8 %. In Japan it was 4.1 % in November 2012.

    Some Europeans are envious of the ‘high’ rate of employment in Detroit.

  3. adolfogiurfa says:

    @E.M.: Industrial output dropping….Europe?, what about a Chinese tour to visit former US industries?. Has it all been a planned strategy, including the big mergers in the 90´s?

  4. KevinM says:

    Try http://www.mpettis.com/, and look for his mid-2012 article on growing up in Spain and Euro-breakup expectations. Most of his stuff is about China, but anyway the writing and data content is excellent. Should be up your alley.

  5. R. de Haan says:

    The real crises of Europe is the wide spread corruption on every level and the fact that even Central bankers now talk about total fail of the Euro.
    Draghi “saving his ass”  about Euro: http://www.telegraaf.nl/dft/nieuws_dft/21305874/__Euro_omlaag_na_uitspraken_Draghi__.html   European Banker admits: Whole thing is doomed (Euro) : http://www.zerohedge.com/news/2013-02-18/european-bank-ceo-admits-whole-thing-doomed

  6. KevinM says:

    Found that article:
    http://www.mpettis.com/2012/05/18/europes-depressing-prospects/
    Good enough to remember eight months later.

    I keep the good ones mental bookmarked, like your carbon dioxide tree growth calculations.

  7. adolfogiurfa says:

    @R.de Haan: Don´t you think it is time to comment the obvious (and forbidden by official science) relation of social human affairs and the current Solar cycle and its EMF changes? Everything is connected.

  8. Richard Ilfeld says:

    “This time is different”. Or not. The truly unfortunate fact in a cynic’s history is that global recessions are cured by world convulsions in opposition to bloody tyrants. The post war rebuilding of infrastructure and repatriation of male populations aggressively seeking to catch up for lost time into work forces gives us an economic bubble. One or two economies do really really well, and the rest of the world benefits from what conservatives call dispersion and progressives call trickle-down.
    Rinse and repeat. Can anyone imagine a peaceful convulsions upsetting enough applecarts to allow the remaining willing to actually fix some of the problems. Me neither. Coping with 50-100 million dead and an equal number displaced creates barely enough energy to overcome a few thousand venal politicians. Clearly national bankruptcy does not reach critical mass.

  9. omanuel says:

    Society is disintegrating because the United Nations was inserted between mankind and his “Creator” on 24 Oct 1945.

    Otherwise we would be celebrating the 540th birthday of Nicolaus Copernicus today. His discovery the Sun is a fountain of energy at the center of the Solar System marked the birth of the scientific revolution, the end of geo-centrism, and the beginning of democratic governments in the west.. Findings from the nuclear and space age also showed the Sun is the “Creator” of all worlds and lives in the Solar System.

    The end of the Copernicus revolution occurred quietly in 1946 when Sir Fred Hoyle laid the foundation for the SSM (standard solar model of H-filled stars), the return of a feudal government and geo-centrism by publishing two, deceptive papers on the Sun in the Proceedings of the Royal Society.

    Tallbloke posted a tribute to Copernicus today, including this outline of his findings from De revolutionibus orbium coelestium (On the Revolutions of the Celestial Spheres):

    “1. There is no one center of all the celestial circles or spheres.

    2. The center of the earth is not the center of the universe, but only of gravity and of the lunar sphere.

    3. All the spheres revolve about the sun as their mid-point, and therefore the sun is the center of the universe.

    4. The ratio of the earth’s distance from the sun to the height of the firmament (outermost celestial sphere containing the stars) is so much smaller than the ratio of the earth’s radius to its distance from the sun that the distance from the earth to the sun is imperceptible in comparison with the height of the firmament.

    5. Whatever motion appears in the firmament arises not from any motion of the firmament, but from the earth’s motion. The earth together with its circumjacent elements performs a complete rotation on its fixed poles in a daily motion, while the firmament and highest heaven abide unchanged.

    6. What appear to us as motions of the sun arise not from its motion but from the motion of the earth and our sphere, with which we revolve about the sun like any other planet. The earth has, then, more than one motion.

    7. The apparent retrograde and direct motion of the planets arises not from their motion but from the earth’s. The motion of the earth alone, therefore, suffices to explain so many apparent inequalities in the heavens.”

    (Bold sections illustrate our total dependence on the Sun.)

  10. DirkH says:

    “So the Euro Zone may want to avoid a “competitive devaluation”, but I don’t see how they can hold out.” (ChiefIO)

    “If something cannot go on forever, it will stop.” (Stein’s Law)

    “And while Europe is starry-eyed with hope about the future, as it is in the beginning of every year, it blithely ignored the fact that new car registrations collapsed in January by 14.2% to a new record low, while construction output in the Euroarea declined for a second month in December, tumbling by 4.8% led by slumping activity in, wait for it, Germany. ” (ZeroHedge)
    http://www.zerohedge.com/news/2013-02-19/overnight-summary-german-hope-soars-three-year-high-european-car-registrations-drop-

    I’m just waiting for them to realize it. Maybe the market will use the Italian election as the pretense for an adjustment. Talk in German media is all smokescreen; maybe mentioning the desparate situation in the PIIGS+France chases away the eyeballs; looks like Germany is in denial. Even political opposition talks about everything but Europe (no wonder, all opposition parties are as fanatically pro Euro as Merkel) – yay, we have a pro homosexual adoption verdict; WTF.

    Very weird here.

  11. p.g.sharrow says:

    To repair the World economy is not all that hard but we must get rid of the concept that wealth is created by manipulations on Wall Street or political capitols. Wealth is created on farms, at mines and in factories. The places of manipulation just rake off a share of the wealth as it moves toward consumption. Wall Street prospers as the real wealth drys up. Political centers are just dividing a dwindling pie into greater numbers of pieces while taking their increasing cut as they stifle real wealth creation. Meanwhile politicians are creating feel good laws that add nothing of real value while “Rome Burns”.
    “Whom the gods would destroy, they first make mad.” these people are as mad as an outhouse rat! Can’t fix this problem until the inmates have totally discredited themselves and their philosophies of wealth creation and use. WE know that these inmates are truly mad as they keep trying the same failed model over and over and expect a better outcome. It has been known for over 5,000 years how build wealth in societies and always Bureaucrats rush in and destroy the goose that has laid the golden eggs. They insist on taking charge of management of this wealth because, in their opinion, those that create are too stupid to manage. Actually G.E.B.s (Greedy Evil Bastards) are just using government as a vehicle to amass their wealth and control.
    We Don’t Need Them! The New Age is beginning and free men no longer need great Bureaucracies to manage their affairs. The Internet allows us to communicate and work with people from all over the world. G.E.B.s can no longer hide behind their politician stooges. pg

  12. adolfogiurfa says:

    @P.G.: 7 STEPS TO TRANSFORM THE GLOBAL ECONOMY

    STEP 1: Step number one of these seven steps, ABOLISH THE FEDERAL RESERVE BANK.

    STEP 2: Step two, CREATE A U.S. CENTRAL BANK AS A PUBLIC UTILITY.

    STEP 3: Step number three, END THE POWER OF PRIVATE BANKS, CREDIT COMPANIES AND THE CREATION OF DEBT MONEY, AND FRACTIONAL RESERVE LENDING.

    STEP 4: And that leads to step four, THE U.S. CENTRAL BANK AS A PUBLIC UTILITY PROVIDING PUBLIC MONEY, CREDIT, AND BANKING FOR THE POPULATION.

    STEP 5: Step five, THE U.S. GOVERNMENT DEFAULTS ON ALL OF ITS DEBT OBLIGATIONS BROUGHT ABOUT BY THE POLICIES OF THE FEDERAL RESERVE BANK.

    STEP 6: Step six, FORGIVENESS OF ALL PUBLIC AND PRIVATE DEBT WORLD-WIDE

    STEP 7: Step number seven, A FINANCIAL WAR CRIMES TRIBUNAL.

    http://exopolitics.blogs.com/exopolitics/2013/01/my-entry.html

  13. BobN says:

    The dilemma is whether to fight to reform the unreformable and try to save the ship or to do everything to hasten its demise, so one can start anew. Too many unknowns on both paths, I think I will go take a nap!

  14. omanuel says:

    On 24 Oct 1945, in the “imperceptible distance” that Galileo recognized “from the Earth to the Sun” was inserted a tyrannical institution that would deny:

    a.) Mankind’s inalienable rights to self-governance, and
    b.) Mankind’s total dependence upon his
    “Creator.”

    I.e., 24 Oct 1945 was a turning point for society.

  15. p.g.sharrow says:

    @Adolfo; I am much in favor of step number 7. That is the only way to drive home the concept that this is a crime against humanity and will no longer be tolerated. Much as the Nazis were hunted down and dealt with.
    @BobN ; The demise of the present system is preordained. There is nothing we can do about it. But we can prepare the replacement and push it forward to prevent the G.E.B.s from instituting their solution. Prophecy has promised that this is what happens. pg

  16. DirkH says:

    J Martin says:
    19 February 2013 at 8:23 pm
    “Germany’s future is beginning to look worryingly shaky.”

    Well that’s just exploitation of electricity ratepayers. Costs 20 bn EUR a year for nothing; a percent of GDP. Call it a Keynesian work project. Something like the WPA, only less useful. (Will continue to swell; I expect 25% growth per year unless policies change)

    On the other hand: 732 bn EUR from Germany are at risk in the PIIGS (lent via ESM, Target2, various other bailouts). This doesn’t count risk in France.

    Of course, the renewable subsidies were partly instrumental in bringing down the PIIGS. Spain and Portugal for instance have more wind turbine capacity per person than Germany and both imitated the German subsidy scheme.

  17. omanuel says:

    The “imperceptible distance that Galileo recognized “from the Earth to the Sun” is the gap Michelangelo painted on the Sistine Chapel between the the hands of Adam and God:

    http://tinyurl.com/ar2k8ss

  18. E.M.Smith says:

    @Adolfo:

    Per “Step 6″: So you want old people to starve? Many folks have their retirement money in debt instruments… It would effectively bring an end to the economy. ALL banks, insurance companies, mortgage industry, retirement funds, non-profits and schools with endowments, etc. etc. would all be destroyed. Poverty would be rampant and bankruptcy the rule. Social Secuirty would cease to exist as it is largely a bucket of such debt obligations.

    While I generally agree with step 7, it would be hard to draw the line between normal lending and exploitation. Remember the French Revolution and how it got out of hand…

    The problem with #2 is that it has been tried. You end up in rampant inflation even faster as there is nothing, not even symbolic, between politicians and the printing press.

    Step3 & 4 basically just amounts to nationalizing the banking system. Doesn’t work well. It’s been done, often, and ends badly. You get a lot of political graft and featherbedding. Loans at low rates to “Friends of the politicians”.

    I’d suggest a simpler course. Leave the Federal Reserve as it stands. Have the U.S. Treasury directly print and issue currency and have it’s own “private bank” for US Government deposits. Leave all the debt issued at The Fed, and announce that all such debt is now converted to 50 year bonds at 1% interest, payable at maturity… Have all private banks handed over to the individual States. (No national charter banks. Only individual State charters). So companies like Citi Bank get broken up into at least 50 distinct banks. Get the Federal Government out of banking entirely (other than their own bank with their cash deposits in it).

    At that point The Federal Reserve Bank is basically one large dead letter debt holder and does nothing of interest. There are thousands of individual banks that can not collude as they can’t do business across state lines. US Treasury money is in a distinct place. Money printing is done by the Treasury and publicized…

    Yeah, it would be a mess too. But a fun one to watch ;-)

    @R. de Haan:

    An interesting set of links. Looks to me like, taken together, the “rot” is slowly growing and headed toward the German core. The periphery is already dying with 1/4 out of work and 1/2 of the “future” doing nothing. The German core is making itself entirely non-competitive and France is pitching over the edge from “core” to periphery in decline (despite their cheap nuclear power).

    Not seeing any way out of this that doesn’t have riots in the streets… The idea of an economic recovery and everything is peachy again just doesn’t have any evidence…

    @BobN:

    You are not the captain of the ship. You are not even allowed near the bridge. You are not the crew, and are not allowed near the engine room nor allowed to patch the holes in the hull.

    All you can do is sit in your room below decks, or take some time to find a nice deck chair (perhaps rearranging them for best view ;-), and look at the locked life boats awaiting “that day”. I suggest finding some plastic bags to protect your “stuff” and making sure the life vest is close to hand. Put some food in a backpack and check your emergency survival kit. Take it all to the “ideal” deck chair at the best time, and make sure you are practiced in self defense…

    It would be a good idea to quietly talk to some of the other passengers and be prepared to assure the captain and crew do not get to take the lifeboats without you…

    @P.G.Sharrow:

    There is a long pattern of historical cycling. I doubt we can change it nor escape it. I had hoped that “This time would be different” even while knowing it would not be. It is generational.

    Democracy and success end up in sloth and exploitation by political means of the productive. “Who you know” becomes more valuable than “What you know”. Eventually that leads to “Government Largess” to buy off the masses. That ends in Tyranny. After what is sometimes generations, sometimes much shorter, tyranny leads to revolution (as in The French Revolution…) and a reset of who is in charge. Then the productive produce and wealth starts to accumulate again… and eventually those who benefit by re-arranging that wealth start their climb to power again and a new cycle of exploitation begins.

    We had a nice 200 year run. Much longer than most Democracies (50 years) and even many Republics. Now the cycle turns.

    I’d wish we were smarter than that. I’d wish more of us knew a bit of history. I know “Reality just is. -E.M.Smith”…

    The only really good news is that such things are very very slow (until they break in brittle failure) so we likely have another 20 or 30 years before the end game. Hopefully enough for most of us to not have to take that turn on the wheel. If we’re lucky, Europe can serve as a ‘Good bad example’ as I think it has closer to 3 or 4 years… so ought to take the turn first and far harder. With luck we can learn from observation… (More probable is that Europe ends up in a war with The Muslim World and the USA gets dragged in and things “glow in the dark” over a large swath of the planet… The PTB are not bashful about using wars to distract folks from their screwups…)

    I strongly hope you are correct and that we can find a way for “person to person” to prevail and the rise of “micro-scale-enterprise” to simply obsolete the whole structural dominance model. We’ll see. I’m working for it.

    @DIrkH:

    The elite class is all steeped in “It isn’t what you know buy who you know” and “the power of positive thinking”. So never say anything negative… Even if the idiots are breaking the place up and burning the furniture. Put a happy face on it and have a “meet and greet”.

    The only way to ‘fix that’ is a cultural revolution / replacement cycle in that stratum of society. That typically only happens with a physical revolt and / or wars. So don’t expect a whole lot of facing the problems squarely until no other choice is possible. Ignoring the problems and snuggling up to the money bags who wants you to pass his favorite laws will pay them better, so expect it. Reality be damned… until there isn’t any other choice.

    They will have to go through the various stages of grief first. Denial is here in some places, yet to come in others…

    So yes, expect a lot of “looks pretty” or “feel good” and does nothing “legislation” as a way to look positive and happy while hanging out with all the right people… They have no stake in “fixing what is broken”, only in “impressing the right folks”.

    @Nickleaton:

    Those UK numbers are dismal… I think maybe I need to do a bit of poking into the UK financial data too…

    @Ian W:

    Those unemployment numbers are the real indicator of public rage. It may be hidden under a public face, but desperation and lost dreams have consequences…

    @Adolfo:

    The USA doesn’t have a central planning structure (yet). The force to mergers is constant in capitalism. It doesn’t take a central plan…

    @KevinM:

    Interesting article. I think there are a couple of minor points that are a bit rough, but generally correct. IMHO it is a race condition between Spain and Italy and Greece as to what is going to be the first to implode / leave the system. Don’t see how they can just decide to “tough it out” and “this will pass” when things continue to get worse.

    @Richard Ilfeld:

    Your history is correct and I’m desperately hoping the future is “different this time”… but “Hope is not a strategy… -E.M.Smith”…

    We-the-peon-people need to find a lower energy / cost way to displace the parasite class and their broken systems…

  19. p.g.sharrow says:

    To learn the lessons of history is to realize the needed path to the future. Most political leaders are just in the front of the mob and have no thought of the future destination. Real leaders communicate their vision of their future destination. The best leaders visualize a future where they are not needed at the destination. pg

  20. R. de Haan says:

    The strength of any successful economy is rooted in freedom of markets, diversity and cheap energy. Today’s economies have been sabotaged by centralized powergrabs, regulations and a tremendous hike in energy prices. If the financial crises doesn’t down us, the red tape and unaffordable energy will do the job.

  21. R. de Haan says:

    About the fake crises in the Netherlands, please translate: http://climategate.nl/2013/02/20/fries-gezond-verstand-in-de-winddiscussie/

  22. R. de Haan says:

    In short,if the Netherlands stopped subsidizing sustainable energy projects there would not be any crises at all.

  23. John Robertson says:

    Possibly this time it could be different, according to something I read years ago, 5% was the critical percentage of any population that inspires or changes society.
    The author was talking about the tiny number of smart people who fled europe to escape the nazi’s and how the movement of these people benefited the USA and handicapped Hitler.
    Sorry digression.
    The way it could be different this time is this tool we are sharing, light scatters cockroaches.
    Forgetting the past, has allowed it to repeat. This tool never forgets.
    Past maniacs have led us to war. But war is certain insanity with the tools we now share.
    But human nature has not changed, the same type of persons still desire absolute power, to redress their personal inadequacies.Enablers encourage the insane hoping to profit.
    The same conditions apply, sane people avoid seeking positions of authority as they recognize the burden of responsibilities often exceed the good that authority provides.
    However the irresponsible suffer no such restraint.
    Free-loaders slaver to get at public wealth.
    Todays fiscal, social and functional problems all share the same root, the leadership we chose is defective.
    Those who want the job, should never be allowed to hold it.
    The people who claim, voters can give themselves wealth, that a free lunch is sustainable policy are either foolish or malicious.Yet this is the leaders we have chosen.
    But our weakness, is the inability to define the problem and then to agree on a solution.
    We seldom agree on the problem.
    I have no desire to impose my choices on you.
    Individuals are creative, why fight fools if you can profit from their madness?
    Attacking power head on, means I lose.
    Fads pass, fools die and life goes on.Why should I waste energy fighting others stupidity ?
    I am comfortable and resist change, as long as the illusion of security remains.
    If I get 3 meals/day,a roof overhead, a useful way to spend my time and belief this condition will continue, I am good.
    It is the loss of the belief, the illusion of society fading, that temporarily wakes me up, and this brief awareness is coming enmass to North American citizens, when hit in the pocket and punished for being a civilized citizen, people get angry.
    Politicians and the power hungry have traditionally deflected this anger by orchestrating attacks on other people, starting wars in other words.And profiting immensely while doing so.
    Can enough people be encouraged to learn enough history, to break free of this cycle?
    If I can remember that the man I see in the mirror each morning is also the ignorance and stupidity I rage against, I can usually avoid spreading those attributes around.
    But some levels of stupidity leave me stumped, frightened and inclined to violent “solutions”.
    Trust me I want to be your leader???

    Enough already, the natural laziness and inherent charm of humans is both our saving grace and future. A sense of humour, appreciation of the absurd and life goes on.

  24. J Martin says:

    The Euro can sustain losing the PIIGS, but if France wobbles then the Euro will start looking shaky. If France crashes then the Euro is history.

    If Spain, Portugal and Greece go then who cares, they followed the co2 shaman and got their just deserts. Greek society is intractably corrupt and should never be a part of any union.

    Meanwhile France has a president hell bent on destroying nuclear plants which given the near complete lack of gas, coal, oil, or shale in France would seem to be a certain recipe for economic collapse. Just like the UK which is pursuing a similar path to the lunatic asylum despite sitting on vast natural resources.

    Given the size of France and the fact that shale seems to have been discovered almost everywhere, you can even see shale at the surface in parts of France, Provence for instance, I would think France must have large resources somewhere, they just need to go looking.

    Germany has already committed economic suicide by replacing nuclear with wind and solar, but has decided to use coal to try and resuscitate the patient before she croaks.

    Perhaps when things get bad (riots), other measures of stability may come to the fore, perhaps youth unemployment is one, and if so then Germany and Japan both look good on that score. (If memory serves me right).

  25. tckev says:

    There is still Eurobonds to try yet.
    Yes Germany will resist it but if France and a larger clutter of the minor player start to show more decay then they will have to. The effects on the Euro-zone would be a real eye-opener.

    Buckle-up it’s gonna be a bumpy ride.

  26. adolfogiurfa says:

    @tkev Don´t you have enough toilet paper?

  27. Gail Combs says:

    p.g.sharrow says:
    19 February 2013 at 7:00 pm

    To repair the World economy is not all that hard but we must get rid of the concept that wealth is created by manipulations on Wall Street or political capitols. Wealth is created on farms, at mines and in factories….
    >>>>>>>>>>>>>>>>>>>>>>>>
    No truer words were ever spoken. I told that to a state Congressional candidate just before the elections and he actually wrote it down! (He won the election too)

    Here is the real problem:

    The Impact of Regulatory Costs on Small Firms
    This report was developed under a contract with the Small Business Administration

    The annual cost of federal regulations in the United States increased to more
    than $1.75 trillion in 2008. Had every U.S. household paid an equal share of the federal
    regulatory burden, each would have owed $15,586 in 2008.
    By comparison, the federal
    regulatory burden exceeds by 50 percent private spending on health care, which
    equaled $10,500 per household in 2008. While all citizens and businesses pay some
    portion of these costs, the distribution of the burden of regulations is quite uneven. The
    portion of regulatory costs that falls initially on businesses was $8,086 per employee in
    2008. Small businesses, defined as firms employing fewer than 20 employees, bear the
    largest burden of federal regulations. As of 2008, small businesses face an annual
    regulatory cost of $10,585 per employee, which is 36 percent higher than the regulatory
    cost facing large firms (defined as firms with 500 or more employees)….

    This is the hidden cost that no one ever sees or talks about.

  28. omanuel says:

    Thanks to all of you for your patience.

    Hopefully this message to climate skeptics explains how the evolving relationship of God, Mankind and the Sun over the past six centuries:

    _ a.) First brought hope for Life, Liberty and the Pursuit of Happiness.
    _ b.) Then dashed hope for Life, Liberty and the Pursuit of Happiness.

    http://dl.dropbox.com/u/10640850/God_Man_and_Sun_(1500-2100%E2%80%8B).pdf

    I deeply regret that it took me so long to decipher and communicate these events.

    With deep regrets,
    Oliver K. Manuel
    Former NASA Principal
    Investigator for Apollo

  29. P.G.Sharrow says:

    @Gail Combs says:”This regulatory burden is the hidden cost that no one ever sees or talks about.”

    I have and you did. Maybe you even had a valuable result. You never know for sure but you must make the effort at every opportunity. When progressives tell me that educated people believe as as they do I just tell that they have not yet convinced me. If they must make calls to cite authority for their argument they lose.
    At the end of WWII the regulatory burden of the FDR age was lifted and the expected return to depression exploded into a great economic expansion. Our present doldrums and beginning contraction can be turned around very quickly if regulation were to be slashed back severely. Bureaucracy always strangles the civilization that it manages, ALWAYS. The weakest bureaucracy results in the strongest economic expansion, ALWAYS. We don’t need THEM. pg

  30. omanuel says:

    Here’s a link that works to the story of Western society’s rise and fall: http://tinyurl.com/aynmbpv

  31. P.G.Sharrow says:

    @Oliver; Sorry but someone has trashed your Gmail pdf by over writing it. Nice pictures though. pg

  32. E.M.Smith says:

    @Oliver:

    I fixed the link. WordPress doesn’t like a ‘.’ in a link as the ‘auto convert to a link’ takes that as the end of a sentence. (Yes, it’s a bit dumb). So you must use the HTML/Unicode text for a ‘.’ instead. That is an ampersand, poundsign, 46 and then a semicolon. .

    @P.G:

    For me, both link and tiny-url worked.

    @Gail:

    Yup. It’s the dead hand of all those folks in D.C. and their cronys looking for money… As P.G. pointed out, it keeps getting worse until it breaks.

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