Posted Feb 17, 2013 by Martin Armstrong
Europe will put in the lowest economic growth in the world for 2013. The German national statistics office Destatis calculated that gross domestic product (GDP) contracted by 0.6 per cent in price, calendar, and seasonally adjusted terms in the period from October to December. The Eurozone economy contracted far more than generally feared in 4Q 2012, as nearly all reporting countries are now showing the economic implosion.
In Europe, there were hopes that the earlier two quarters of mild recession would be the worst of it, but GDP fell by 0.6% in 4Q 2012, the steepest plunge since the nosedive at the start of 2009. There is no light at the end of the tunnel as Greece will not be able to meet its payments and France is doing everything possible to destroy its economy for good chasing people out.
The hope for a economic recovery are vain illusions. It will be much longer than anyone expects and the bottom appears likely at the very best in 2020 with the low in the Economic Confidence Model at that time – the 13 year market from the 2007 high. Since most governments piled up too much debt during the previous slump to mobilize fiscal policy to fuel an upturn, what are they going to do for an encore?. On the contrary, budget consolidation will remain a drag on activity for years to come and despite the hyperinflationists, governments are borrowing rather than printing and that makes them far more aggressive to tax anything that moves.
The decline in the European economy increases the downside risk of a prolonged contraction given the larger-than-expected quarterly declines in German (-0.6%), France (-0.3%) and especially Italy (-0.9%). The contraction in Spain (-0.7%) was in line with estimates by the national central bank.
We are staring economic disaster square in the eyes. In Greece, there will be a shortfall in revenue as the economy declines further throughout Europe and the shortfall recorded in January that everyone dismissed as just a seasonal drop will not reverse in the coming months. Government will get even more aggressive and no matter what they do, they will merely cause the economy to implode even more.
Unless governments stop this nonsense, we are facing very serious civil unrest turning up next year. It is time to admit this is wrong.