Europe is Sinking

[Meatpie]

Welcome to Ireland: Thousands of new homes remain unoccupied in the so-called "ghost estates" after Ireland's property bubble burst and threatens to pull the rest of Europe down.

Experts predict Spain and Italy may be next.

Read more & discuss.

http://www.dailymail.co.uk/news/art...T-Britain-pays-billions-country-implodes.html

Dramtatic events are taking place, 2010 has been a very tirbulent year as the global recession continues and European countries are still sinking one after the other.

Some go even further and say the European Union may get ripped apart if this continues.

Meanwhile China is experiencing insane economic growth but when the property bubble there bursts it will be disaster.

Massive construction is taking place in China, property prices have tripled in the last two years or so.

I think Europe is in deep trouble.

Do you think it can get worse or things will start to improve in 2011?

 

[Fideliodemo]

They are expecting things to get worse on this side of the pond as well. With the current fiasco going on with foreclosures - many banks do not know if the paperwork is properly executed or if certain homes should actually be in foreclosure because they used document mills to produce and execute the documents and proceedings. Many people who were buying a foreclosed home are now in limbo as the banks are putting short sales and releasing foreclosed homes to their new buyers on hold until they know all is well and it is actually a foreclosure. Additionally, many banks are holding on to their portfolios of foreclosed homes waiting for what they see is an upturn in the housing market, then they are supposedly going to release a flood of homes on to the market, hence destabilizing everything once again.

I think we are in more of a pickle than we actually thought and we were blind to what the true ramifications of our actions these past years was going to be. There are entire developments here in the states of vacant, brand new homes that are being destroyed, torn down because of the glut and the fact that the land is more valuable without the home on it than with it. Unless something magical happens, I think we are going to see it get worse long before it gets better. I may be cynical, but when you hear that there were 1000 new jobs created, yet several companies are laying-off workers or closing all together, meaning the loss of several thousand jobs, the scales are not tipped in our favor.

We live in a society worldwide where we want material things to show that we have made it or that we are able to pursue whatever dream you wish to pursue. That meant allowing those who really should not have purchased a home or opened several credit card accounts the ability to do so because God forbid we deny anyone what they want. Now it is time to pay the piper and it is going to cost us more than an arm and a leg. What the actual cost to each of us will be is yet to be seen, but I would be prepared for some instability and some gray days in our economic future.

 

[Meatpie]

You are absolutely right.

I too read American papers from time to time and a few days ago one of the headlines was "1,000 new jobs created in the US for last month".

The article went on to say that the economy was recovering.

This is just so ridicilous, what are 1,000 new jobs for a country like the US?

I see no improvement in my country, people have lost their homes here too and entire families live in cars.

I am worried about inflation. If prices shoot up I think we won't manage to keep up.

Newspapers here are running headlines like "Huge inflation to hit soon" making people even more pessimistic.

 

[Fideliodemo]

The truth is we do not know what is going to happen, other than it is going to be ugly at best for a while. Headlines can be very deceiving as many jobs that are created were temporary, such as they were for the Census, training tax preparers for the upcoming income tax season and now seasonal and holiday help. Every little bit helps, but there is a limit to the amount of help part-time workers can contribute. Many of them are going to find themselves in a bind for they will end up losing more to taxes and various governmental deductions then what they eventually get as take home pay. So in the long run, it will actually cost them to go to work instead of making any income by the time expenses such as transportation and such are factored in.

It seems that the powers that be feel that by rebuilding our bridges and roads, the regular Joe will benefit by a supposed trickledown effect. If that is the best we can offer, then I think we need to look to other solutions. Someone welding rebar on a bridge is not going to help a single, unemployed mother get a job. Maybe in a perfect world, but as far as I know, we do not live in one.

As far as prices, things have already gotten out of hand. With the upcoming Thanksgiving holiday all you hear is how much more it is going to cost this year over last. That, coupled with people being out of work or even better, underemployed (part-time or not enough hours to break even) I do not know how they do it. And the retailers think people have extra money to spend at their after holiday sales that they are actually opening at 3AM on Friday morning. There is nothing I need that badly to wait in line at a store to fight over the one of a particular item that they have in stock. As the ads state, "While quantities and supplies last." Retailers are just as desperate as everyone else. I think we are in for a disappointing Christmas sales season yet again.

There has to be some way to work out a program that could put to use the glut of empty homes that could benefit the homeless and put people to work by doing something, even if it is picking up trash along a highway as a way for them to earn the benefit of having a place to live. At least it would generate some kind of economic stimulus and put people in to a house or an apartment. We need to rework the welfare systems and instead of just giving free hand-outs, make those that are able do something for their funding instead of just sitting around and expecting more and more.

 

[Meatpie]

What about China, how did they manage to escape? Their economy is growing, new jobs are created while Europe is in a downward spiral.

And when the Chineese economy goes bust, what will happen then?

2012 may indeed be the end of the world as we know it. Radical change is needed.

 

[thevicegrip]

I think it helps to have a more historical perspective. Imagine for a moment if you could go back in time and tell your grandfather "Europe is about to collapse!" He might inquire if the German army is winning the war. From his perspective, the current problems would seem relatively minor. My point is...Europe always is falling into an abyss. Things are never easy.
The US has also had crisis after crisis...bank failures, depressions, inflation of 20 percent. . Yet somehow, we survived.
I would point out that if you compared your life to your grandfather, yours would rate easier and better.
One thing the financial reports cannot project is future innovation and technical advances. Also, keep in mind the bias of the media to sell disaster. That sells, while good news doesn't.
All that said, I think it may be prudent to short the euro, if that option is available to you. Or invest your money in overseas in developed economies, like US, Aus, Canada.

 

[Meatpie]

The European Union may will fall apart if more countries need bailouts.