Well, despite what you may have read, the economic collapse is not going to be a single event. It is going to play out over quite a few years. In some ways we are experiencing an economic collapse right now. When the next major financial crisis occurs, many will be calling that "an economic collapse". But if you really want to grasp what is happening to us, you need to think long-term. We are heading for a complete and total nightmare, but it is going to take some time to get to the end of the story.Yes, there will certainly be times of great chaos. The financial crisis of 2008 was one of those moments.
But the financial crisis of 2008 did not completely destroy us.
Neither will the next crisis.
I think it is helpful to think of what is happening to us as a series of waves.
The epicenter of the next great financial crisis will be in Europe and that will be another wave.
Yes, the waves are going to start coming more rapidly and will start becoming more intense.
In that way, they will kind of be like birth pains.
The U.S. government is not going to help you survive when things hit the fan, but it is not going to disappear either.
In fact, the federal government will probably try to grab more power than ever in an attempt to "restore order".
The governments of Europe are not going to disappear either. In fact, in the long run Europe is probably going to end up more "federalized" than ever even if the euro breaks up in the short run.
The coming economic collapse is going to play out over a number of years and it is going to be absolutely horrible.It will be unlike anything any of us have ever seen.
Personally, I believe that it will eventually be much worse than the Great Depression of the 1930s.
Britain and the rest of the EU should back plans for a banking union that would hand a single authority the power to wind down ailing banks without the approval of national governments, according to the president of the European Commission.
Jose Manuel Barroso urged the EU to take “a very big step” towards deeper integration to avoid a repeat of the European debt crisis.
Concerns grew on Monday that Italy could be the next victim of Europe’s financial infection, leading nervous investors to sell Italian stocks and bonds and damping euphoria over a weekend deal to bail out Spain’s banks.Italian officials privately expressed concern that the 100 billion euros, or $125 billion, that Europe pledged to Spanish banks might not stop the troubles from spreading.The main fear is that Italy cannot grow its way out of arecession fast enough to pay a mountainous national debt. Other concerns include the fact that Italy, with the third-largest euro zone economy after those of Germany and France, will have to shoulder a large portion of the bailout bill even as it grapples with its own sharp economic downturn.“There is a permanent risk of contagion,” Mr. Monti told an economics conference near Venice over the weekend, speaking by telephone. “That is why strengthening the euro zone is of collective interest.”
Only this one may not even succeed in buying time – I give it less than a month before some such other piece of bad news comes along to fire the crisis anew. Like all the others, the latest fix seems to create as many problems as it solves. The euphoria in markets at Spain's rescue lasted all of a few hours; having bounded away at the opening, they ended broadly flat.Like Spain, Ireland's problem was essentially that of overexpansion of its banking sector to fund unsustainable construction, property and consumer booms. The consequent losses have overwhelmed the capacity of the sovereign to cope, transmogrifying the original banking crisis into a full blown fiscal meltdown.
The recent recession wiped out nearly two decades of Americans’ wealth, according togovernment data released Monday, with middle-class families bearing the brunt of the decline.
The Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010.
The data represent one of the most detailed looks at how the economic downturn altered the landscape of family finance. Over a span of three years, Americans watched progress that took almost a generation to accumulate evaporate. The promise of retirement built on the inevitable rise of the stock market proved illusory for most. Homeownership, once heralded as a pathway to wealth, became an albatross.The findings underscore the depth of the wounds of the financial crisis and how far many families remain from healing.“It’s hard to overstate how serious the collapse in the economy was,” said Mark Zandi, chief economist for Moody’s Analytics. “We were in free fall.”
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