Could Germany Implode From The Eurozone Crisis?

I'll say it again:  Germany's economy is in a bit more trouble than anyone will publicly admit.  Quite a bit.  German industrial output drops more than expected  US News And World Report.  Excerpts:

Industrial production in Germany dropped by an unexpectedly sharp 2.2 percent in April compared with the previous month, official data showed Wednesday, sending a downbeat signal about the economy's ability to shrug aside the eurozone debt crisis.


The decline was led by a 3.6 decrease in production of capital goods such as factory machinery and a 3.7 percent fall in production of consumer goods, the Economy Ministry said.

The drop followed a 2.2 percent month-on-month gain in March — a figure that was revised sharply downward from the initial reading of 2.8 percent

The Economy Ministry said that industrial production remains "very robust." It said one factor in the decline was the fact that April 30, the day before the May Day holiday, fell on a Monday — meaning that many people took the extra day off.


Carsten Brzeski, an economist at ING in Brussels, took a less rosy view.

"The German economy's immunity against the eurozone sovereign debt crisis is clearly fading away," he said, pointing also to shrinking order books and a recent drop in business confidence.

"Even if it will not fall, the eurozone's last stronghold is faltering," Brzeski added. "For the time being, it is a stabilization at a high level. However, latest data clearly indicate that Germany is not an economic island."

Economic attention will refocus to Spain, Greece, and Italy, but I bet there's been a 1000 percent increase in heated, secret meetings happening all over Corporate and Financial Germany right now..  They know they're in trouble, and I'm sure some of them know just how much trouble that is. 

Spain's calling for money Saturday.  What will Germany ask for in return?  Do they really think they'll see that money again?

Greece: Before And After

The populist tsunami forms..  If these polls hold true, Greece is about to change history.  Is this Greece's exit from the euro zone?  Is this the beginning of the end for the entire European Union?  Where's Riot Dog?  Zero Hedge.  Excerpts:

In one of the most fascinating psychological shifts, there has been a massive shift in the perspective of the Greek electorate since the election two weeks ago. Almost as if the size of the actual votes for Syriza, the far-left anti-bailout party, gave citizens 'permission' to be angry and vote angry. The latest opinion polls, as per Credit Suisse, show the center-right New Democracy party crashing from 108 seats to only 57 as Tsipras and his Syriza colleagues soar from 52 seats to a hugely dominant 128 seats. Is it any wonder the market is pricing GGBs at record lows and 'expecting' a Greek exit from the Euro as imminent given the rhetoric this party has vociferously discussed. On the bright side, the extreme right Golden Dawn party is seen losing some of its share.

The new election date for Greece is June 17th.  Can the bankers prevent a bank run meltdown before then?  Fun election fact:  More than one half of Greek policemen voted for the Neo-Nazi New Dawn Party.  That ought to be a great conversation starter and laugh riot during the upcoming real riots!

The rise of the new Holy Roman Empire? EU technocrats plot to create powerful EU president

Let the cloak and dagger shenanigans begin!  Spoiler alert:  The takeover is spearheaded by a power mad German!  Shocker, right?  Express, via The Extinction Protocol. Excerpts:

Senior Eurocrats are secretly plotting to create a super-powerful EU president to realize their dream of abolishing Britain, we can reveal. A covert group of EU foreign ministers has drawn up plans for merging the jobs currently done by Herman Van Rompuy, president of the European Council, and Jose Manuel Barroso, president of the European Commission. The new bureaucrat, who would not be directly elected by voters, is set to get sweeping control over the entire EU and force member countries into ever-greater political and economic union. Tellingly, the UK has been excluded from the confidential discussions within the shady “Berlin Group” of Europhile politicians, spearheaded by German foreign minister Guido Westerwelle. Opponents fear the plan could create a modern-day equivalent of the European emperor envisaged by Napoleon Bonaparte or a return to the Holy Roman Empire of Charlemagne that dominated Europe in the Dark Ages. They are concerned that David Cameron’s coalition Government is doing nothing to prevent the sinister plot. The secret talks were uncovered by Independent Labour peer Lord Stoddart of Swindon.

 This won't end well.

Meanwhile, In Pre-Mayhem Greece..

FT Report That Greek Bailout Package On The Verge Of Collapse After Surge In Greek Funding Needs Sends Stocks, Euro Plunging From Highs  Tyler Durden for Zero Hedge.  Excerpts:

Wondering what just caused the market to slump? Take a wild guess. That's right - Greece. Minutes after Greece passed a vote in which it promised to promise to promise to consider collecting 1998-1999 taxes (even as all of its tax collectors are about to go on permanent strike), the FT was breaking news that while the Troika was "bailing out" Greece in the past years, the country was spending itself into an  even greater oblivion. As a result, the terms of the July 21 Second Greek Bailout will most certainly need to be renegotiated, with banks having to take even greater write downs on the bond exchange, and with far more capital having to be injected into the country.

The Downward Spiral tightens; speeds up.

Strikes and protests mount against austerity in Greece  World Socialist Web Site.  Found it on Rense.  Excerpts:

“Today, it is no longer safe for us to go onto the streets,” a politician of the Greek ruling party PASOK told the Frankfurter Rundschau. “We are the government and we are alone.”



Widespread popular anger against the government in Greece has only intensified following the latest round of austerity measures. Incidents abound of politicians of both the social democratic PASOK and the conservative opposition New Democracy (ND) being pelted with eggs and on occasion stones when they show themselves in public. Angry crowds have repeatedly besieged the homes of politicians and chanted “thieves, thieves” and “Give the money back!”


According to surveys conducted by Eurobarometer, 82 percent of Greeks have lost confidence in the government and 83 percent distrust the parliament. Sixty-seven percent no longer trust the European Union. Other polls show that PASOK would today win just 15.5 percent of the vote in a new election.

It's all hanging by only several threads..  The Big Question remains:  How big the shock waves will be, and how hard those impacts will be felt.  Globally, of course.

Greece is fast approaching the point of no return

From The Guardian UK via Rense.  Excerpts:

An uncontrolled debt default by Athens is suddenly starting to seem a horrible possibility.
..
A unity administration in Athens might allow bailout talks to resume, but by then investors might have zero faith that the next package of loans could succeed where the last one failed. More austerity, even if the Greeks could be coerced into accepting more pay cuts and more state sell-offs, might simply damage the economy further.

Default, then, seems to be looming one way or another. The best policy would be to try control the damage by ensuring the impact of the rest of the eurozone banking system is as soft as possible. That assumes, of course, that damage-control is still an option. The point of no return is fast approaching.

Greenspan Tells Charlie Rose Default by Greece 'Almost Certain'

Alan Greenspan, former Federal Reserve chairman, said a default by Greece is "almost certain" and could help drive the U.S. economy into recession.

"The problem you have is that it's extremely unlikely the political system will work" in a way that solves Greece's crisis, Greenspan, 85, said in an interview today with Charlie Rose in New York. "The chances of Greece not defaulting are very small."

Journalist:"It Is A War In Greece"  Video from Russia Today via Before It's News/  Watch this.
Greece riots: RT film crew get caught in Athens street protests  More from Russia Today via Metro/UK

This is barely The Beginning.  It's going to be a long, hot summer.

Gonzalo Lira Provides Background On Europe's Upcoming Euro Crisis..

Europhrenia  Excerpts:

According to the dictionary, schizophrenia is “a long-term mental disorder of a type involving a breakdown in the relation between thought, emotion, and behavior, leading to faulty perception, inappropriate actions and feelings, withdrawal from reality and personal relationships into fantasy and delusion, and a sense of mental fragmentation.”

In Europe, they’re having the same thing—only writ large: It’s not that the political/financial leadership of Europe is at odds with the people—it’s that they’re two minds locked in a single body, struggling for control.

In the one hemisphere of this divided brain, the political/financial leadership is convinced the European union is something devoutly to be wished—no matter what the costs, no matter what fortune and the people throw up in opposition.

In the other hemisphere of the europhrenic brain, the people of Europe overwhelmingly do not want integration “at all costs”. In some parts (a lot of parts) of Europe, they don’t want integration at all.
..
No country ever voted for monetary union—ever. European monetary integration only ever happened by either government diktat or the legislature overriding the will of the people.
..
The people of Europe never wanted total European integration, not even in the best of times—whereas the European leadership adamantly insisted upon it.
And:
The basic problem of the current crisis is, countries of the European periphery—Greece, Ireland, Portugal, Spain, Italy—took on too much cheap debt from banks in the core eurozone countries—France, Germany and Holland—and now are unable to pay for it. It’s not more complicated than that.

(One could argue that the reason the European nations overspent was that the leaders were basically bribing the people with a false sense of affluence, bought and paid for via debt, so that they would acquiesce to the European Union and the eurozone. But that’s for another post.)

And remember:  The real crisis has yet to begin!  The unrest so far is in response to the first wave of official responses towards keeping the Euro solvent and restarting the economy.  The real pain hasn't even started yet.  In Greece, they're protesting, and Portugal just threw out their government.  How long will it be before alienation and anger at the new government's inability to correct begins to rise?

The immediate question:  How quickly (and to what scale) will this crisis bloom? 

Breaking: Greece Threatens To Leave Eurozone, Reintroduce Own Currency

If this is true?  Then, Wow..  Here it comes.  From Zero Hedge.  Excerpts:

The debt crisis in Greece has taken on a dramatic new twist. Sources with information about the government's actions have informed SPIEGEL ONLINE that Athens is considering withdrawing from the euro zone. The common currency area's finance ministers and representatives of the European Commission are holding a secret crisis meeting in Luxembourg on Friday night.

Greece's economic problems are massive, with protests against the government being held almost daily. Now Prime Minister George Papandreou apparently feels he has no other option: SPIEGEL ONLINE has obtained information from German government sources knowledgeable of the situation in Athens indicating that Papandreou's government is considering abandoning the euro and reintroducing its own currency.

Alarmed by Athens' intentions, the European Commission has called a crisis meeting in Luxembourg on Friday night. In addition to Greece's possible exit from the currency union, a speedy restructuring of the country's debt also features on the agenda. One year after the Greek crisis broke out, the development represents a potentially existential turning point for the European monetary union -- regardless which variant is ultimately decided upon for dealing with Greece's massive troubles.

Will Greece indeed be the first to leave?  The Euro Zone crisis is already in motion - The question is:  Who topples the domino, how disastrous and complicated is the resulting chain reaction, and how and where will it end?  But the free fall hasn't even started yet, and wondering about the future is pointless when the near term present will be crazy enough.

A failing nation state attempting to decouple from a failing Union.  Again, if true:  This is a big deal.

Troubling News: EU Edition

Moody's warns it may downgrade Spain's debt

Citi: Ireland, Greece And Portugal Are Insolvent, Spain Will Be Soon, Italy And Belgium Are Threatened

Worries About Italy and Belgium in Euro Zone

Germany Opposes Bailout Boost in Face-Off With ECB

Irish parliament to vote on EU/IMF bailout (Hey! This happens today! More fireworks..)

Opposition Claims Government Understated Debt And Deficit Figures By About 25%

This time; It's Portugal. And Payback. And Twice The VanDamage..(Thanks, Janeane Garafalo)

Portugal, it seems, has a different set of problems than Ireland. Here's how: (from the Payback link..)

Ireland’s government has money, but its banks are drowning in debt, and the government has vowed to guarantee debts, making the state itself vulnerable. Portugal’s problem is different. Its banks are not especially troubled, but the state itself has high debts and low growth, and the mound of both public and private debt is considerable. The total debt is larger than the annual gross domestic product, some $275 billion of debt in an economy of $232 billion a year, one of the highest ratios in the developed world.
And:
So the interest rates Portugal would have to pay on the markets, should it have to borrow money now, would be much too high, forcing it to seek money from the European Union and the International Monetary Fund. The government here, as in Dublin, hopes the markets will calm down. But other European Union governments are concerned that unless the markets are appeased now, by protecting Ireland and Portugal, the contagion will spread to huge Spain, the fourth largest economy among the countries that use the euro.

The more I learn about this crisis, the more I tend to believe the worst possible outcomes will actually occur. There aren't any general answers applicable to more than one country, as economic circumstances will be country wide, but not regional. Solutions that appeal to both France and Germany would financially cripple or kill other EU countries. The solutions will be complex and incredibly painful for the weakest countries, and protests and riots are almost sure to follow. And still, the system will most likely collapse.

To drive the point home.. So, if the EU fractures, what sort of effect will it have here in America? Our financial structures And our government are both perilously close to collapse, and locked in tight with all of Europe. How could we possibly absorb the implosion of so many economically interwoven allies? How?

Having Trouble Understanding The Machinations and Implications Of The EU Financial Crisis?

Gonzalo Lira can help. Why is the EU Crisis important? Globalist financial/banking policy has tangled not only neighboring European countries economies together in a way impossible to decouple without serious turbulence, but the majority of the world's collective economy is also locked in a larger magnification of what currently ails the EU. And, as goes Europe, so goes the Global Financial System. Lira writes simply, directly, distilling complex financial situations into an easy to understand narrative of real-time economic events, and why there are no easy or immediate answers to this rapidly blooming global catastrophe..

Lira also thinks the European situation is deteriorating rapidly, even more than he recently predicted. I know, I know.. The economic crisis is no where near as fun as Bristol Palin or even the Royal Engagement, but hopefully a few of you will take the 15 minutes or so required to read both articles. You should, then, have a much better handle on the implications this has for America's immediate financial future.

Short answer: Huge, and Terrible.