Euro-Zone Economy Posts Sharpest-Ever Fall
May 15th, 2009WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
I’m sticking to my assessment that it’s going to take some kind of wildcard event to move the show on to the next act. Something big. I don’t know what, but it will probably involve a reduction in the number of national currencies or the use of some new global confetti currency. The crimes that the Fed undertook during the end of the Bush regime and the beginning of the Obama regime bought the system as we know it some time. We’re in the eye of the storm, in other words.
Trillions of dollars worth of funny money is now hiding somewhere out there, nobody knows where, but that confetti bomb is eventually going to burst into the wider system. When it does, we’ll be in for another round of chaos and probably hyperinflation.
Via: Wall Street Journal:
The euro-zone economy suffered its sharpest slump on record in the first quarter of 2009, underlining the severity of Europe’s recession.
Gross domestic product in the 16-nation euro-currency area fell 2.5% in the period from January to March, compared with the fourth quarter of 2008. That means Europe’s economic heartland was contracting at an annualized rate of nearly 10% in the first quarter.
However, the latest monthly indicators for business activity suggest the pace of Europe’s recession has slowed sharply. “This kind of pace of contraction will probably not be repeated,” said Greg Fuzesi, economist at J.P. Morgan in London: “You’re not going to get -10% again.”
A growing number of analysts believe the euro-zone economy could stabilize by this fall and return to growth around the end of the year, although unemployment is expected to continue rising until well into 2010. Business surveys have shown new orders stabilizing, while big drops in inventories in the last two quarters are expected to lead to higher production by firms in coming months.
The euro zone took an unprecedented beating in the first quarter, however, with the biggest contractions coming in countries that rely on the export of manufactured goods.
Germany, Europe’s biggest economy, contracted by 3.8% in the first quarter, equivalent to an annualized rate of -14.4%, in the country’s worst quarterly performance since official records started in 1970. Sharply falling exports and business investment were behind the slump, the government said, whereas consumer spending grew slightly, thanks in no small part to Germany’s cash-for-clunkers incentives, which led to higher new-car sales.
