When
you get into too much debt, eventually really bad things start to
happen. This is a very painful lesson that southern Europe is learning
right now, and it is a lesson that the United States will soon learn as
well. It simply is not possible to live way beyond your means forever. You can do it for a while though, and politicians in the U.S. and in
Europe keep trying to kick the can down the road and extend the party,
but the truth is that debt is a very cruel master and at some point it
inevitably catches up with you. And when it catches up with you, the
results can be absolutely devastating. Greece, Italy, Spain and
Portugal all tried to just slow down the rate at which their government
debts were increasing, and look at what happened to their economies. In
each case, GDP is shrinking, unemployment is skyrocketing, credit is
freezing up and manufacturing is declining. And you know what? None of
those countries has even gotten close to a balanced budget yet. They
are all still going into even more debt. Just imagine what would happen
if they actually tried to only spend the money that they brought in?
I have always said that the next wave of the economic collapse would start in Europe and that is exactly what is happening. So keep watching Europe. What is happening to them will eventually happen to us.
The following are 17 signs that a full-blown economic depression is raging in southern Europe...
#1 The Italian economy is in the midst of a horrifying "credit crunch" that is causing thousands of companies to go bankrupt...
Confindustria, the business federation, said 29pc of Italian firms cannot meet "operational expenses" and are starved of liquidity. A "third phase of the credit crunch" is underway that matches the shocks in 2008-2009 and again in 2011.
In a research report the group said the economy was caught in a "vicious circle" where banks are too frightened to lend, driving more companies over the edge. A thousand are going bankrupt every day.
#2 During the 4th quarter of 2012, the unemployment rate in Greece was 26.4 percent. That was 2.6 percent higher than the third quarter of 2012, and it was 5.7 percent higher than the fourth quarter of 2011.....
