18 Indications That Europe Has Become An Economic Black Hole Which Is Going To Suck The Life Out Of The Global Economy

Summer vacation is over and things are about to get very interesting in Europe. Most Americans don't realize this, but much of Europe shuts down for the entire month of August. I wish we had something similar in the United States. But now millions of Europeans are returning from their extended family vacations and the fun is about to begin. During August economic conditions continued to degenerate in Europe, but I figured that it wouldn't be until after August that the European debt crisis would take center stage once again. And as I wrote about last week, if there is going to be a financial panic, it typically happens in the fall. The stock market has seen quite a nice rally over the summer, and many investors are nervous that we could see a significant "correction" very soon. The month of September has been the absolute worst month for stock performance over the past 50 years, and it has also been the absolute worst month for stock performanceover the past 100 years as well. Of course that does not guarantee that anything is going to happen this year. But things in Europe continue to get worse. Unemployment rates are spiking, manufacturing activity is slowing down, housing prices are crashing and major financial institutions are failing. What is happening in Europe right now appears to be an even worse version of what happened to the United States back in 2008.

But most Americans aren't too concerned about what is happening in Europe.

U.S. Companies Brace for an Exit From the Euro by Greece

By NELSON D. SCHWARTZ

Even as Greece desperately tries to avoid defaulting on its debt, American companies are preparing for what was once unthinkable: that Greece could soon be forced to leave the euro zone.


Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency.

China Targets American Jobs—Again

Gordon G. Chang






On Saturday, Wen Jiabao said China will try to export its way out of its current economic troubles. The country’s premier suggested technical fixes, such as faster payment of tax rebates, but he did not refer to depreciation of the national currency, the renminbi.



hat’s a rather large omission considering the circumstances. Why? Because his primary plan, evident over the course of the last several months, has been to force down the value of the currency to make Chinese products cheaper on global markets.

Some analysts believe the yuan, as the renminbi is informally known, is undervalued by as much as 40 percent against the dollar. That’s possible, but we do not know the market value of the Chinese currency. The People’s Bank of China, the country’s central bank, essentially fixes the value of the yuan by buying and selling currencies so that it stays within a predetermined band. The renminbi has depreciated against the dollar by about 1 percent this year after it climbed—due to Washington’s pressure—4.7 percent in 2011.

If Elgin

Why Americans Must End America’s Self-Generating Wars

Peter Dale Scott

The most urgent political challenge to the world today is how to prevent the so-called “pax Americana” from progressively degenerating, like the 19th-century so-called “pax Britannica” before it, into major global warfare. I say “so-called,” because each “pax,” in its final stages, became less and less peaceful, less and less orderly, more and more a naked imposition of belligerent competitive power based on inequality.

To define this prevention of war as an achievable goal may sound pretentious. But the necessary steps to be taken are above all achievable here at home in America. And what is needed is not some radical and untested new policy, but a much-needed realistic reassessment and progressive scaling back of two discredited policies that are themselves new, and demonstrably counterproductive.

What about Israel’s nuclear weapons?

Patrick B. Pexton

Readers periodically ask me some variation on this question: “Why does the press follow every jot and tittle of Iran’s nuclear program, but we never see any stories about Israel’s nuclear weapons capability?”

It’s a fair question. Going back 10 years into Post archives, I could not find any in-depth reporting on Israeli nuclear capabilities, although national security writer Walter Pincus has touched on it many times in his articles and columns.

US disowns Israel over Iran strike: No weapons or military backup

US Gen. Martin Dempsey’s assertion Thursday, Aug. 30 that the US would not be “complicit” in an Israel strike against Iran, together with the drastic reduction in the scale of next month’s joint US-Israeli war game disclosed by TIME, add up to a blunt message from US President Barack Obama to Israel: You are on your own! See how you manage without special US weapons and US military backup, including a shield against missile counter-attack, if you decide to defy us and go through with a military operation against Iran.
Instead of the 5,000 US troops originally assigned for Austere Challenge 12, the annual joint exercise, the Pentagon will send only 1,200 to 1,500 service members. The missile interception systems at the core of the joint exercise will be reduced in number and potency: Patriot anti-missiles will come without crews and maybe one instead of two Aegis Ballistic Missile Defense warships, according to the magazine.