Global Economy Slows, Pushing Europe’s Central Bank to Make a Surprise Move

How did this morning’s in-effect two-month jobs data turn out? How are we doing now? Why did the American Job Shortage Number or AJSN show that latent demand is up 670,000 since December? All that is at http://worksnewage.blogspot.com/2019/03/februarys-employment-data-little-change.html.

More debt is the answer to a debt crisis? Pushing the corpse down the road ( tax-cuts, zero-interest rates, leveraged loans, de-regulation of banking....) will not revive the corpse. Someone killed this economy and the sooner it is accepted the sooner something can be done. Not record prices for yachts and paintings, perhaps re-investment. The central banks continue to fool the public but not the insiders that are in on the fix.

Great. This is the perfect time for Trump to strike. He should announce auto tariffs, with a 6 month grace period. He should also announce a withdrawal from NATO, with a one year grace period. We’ve been subsidizing everyone enough, from allies to economic migrants. Obama called the Europeans “free riders” and was so “aggravated” by them that he instituted an “anti-free rider campaign”. Only problem was that it was toothless. Let’s have Tariff Man handle it for once!

National Economic Council Director Larry Kudlow has been encouraging Donald Trump to continue to borrow enormous amounts of money, you know he supports increasing the national debt forever, when he should be warning the president and all of Congress that we are heading down a road to economic failure, that is unless we increase the population and the related tax base at a rate which exceeds the national debt increases and for at least the next 50 years. This means the population should increase each year by around 7 million. What about opening more of the borders? It seems that this is our only choice, but there still is one more very worrisome problem. We will not be able to feed this many people. Maybe a different approach would be to penalize individuals like Kudlow and Trump, who are making a lot of money via this debt based economic system, for their unquestionable greed before it is too late.

It was free money that drove the last recession (depression) with ridiculous interest rates for home purchases and risk taking. The Fed left the interest rate way too low for way too long in the early 2000s. I wonder now, if there is a way for central banks to thwart recession or inflation. Careless! The current social thinking is that austerity is bad and everyone should have a house, car, tv, cell phones all around for free. That is not sustainable. Big corporations are not as much the issue as hedge funds and private investment firms to include LLCs that own property throughout the US that charge rents and care not for the communities they've 'purchased.' That is the problem, the beginning of the discussion we need to have.

"History shows that the American economy cannot escape problems in Europe, given their deep commercial ties. And the Chinese slowdown amplifies the risks." Too bad we have an ill-informed and unwilling to learn POTUS sitting the White House cheering the Chinese slowdown because he thinks that that means that we are "winning" and China is "losing." Too bad the same clueless man thinks that tariffs on China means that China is pouring "millions of dollars into our treasury." The world will pay a price for his ignorance; the USA is not immune.

so the Eu Central bank returns to: "The stimulus program was used to prevent collapse of the eurozone following the 2008 financial crisis. It allows commercial banks to borrow money from the central bank at zero interest, but they have to promise to lend the money to businesses or consumers." Who believes bankers promises?? They will make some money through interest charged for money given them for free, and keep a lot of money for themselves. Business and ethics do not go together. The invention of money involved trust, which has been lost.

More global instability? Russia is loving this. We need to get our house in order and set a no tariff trade policy with Europe. Does Trump understand any Economics? The dollar is too strong and is wrecking havoc across world trade. Just look at our $800 billion plus trade deficit. Did the 1930's not teach the world anything?

Just stop buying crap. None of this is sustainable. Stop.

Remember this recent retired phrase ? : "Fiscally responsible, but socially compassionate."

Filter out the undertone of " blame Trump "and we are left with Debt and Demographics as the fundamental causes of the ongoing secular stagnation. Europe and China, especially the former, are aging, heavily over indebted, risk averse societies; seriously lacking in those Keynesian " animal spirits " that drive economies. Consider France, admittedly something of a worst case example, where approximately 55% of GDP is consumed by government spending. Where will new investment flow originate. Do you know anyone rushing to buy into France, that is with the exception of mega wealthy oligarchs buying real estate in Paris?

A "flavor of panic", indeed. The "extraordinary" and "heroic" measures taken by thoroughly incompetent and out-of-touch-with-reality Central Bankers over the past decade did nothing more than postpone the inevitable day of reckoning, the severity of which will be amplified by an order of magnitude as a result. Globalization failed for the middle classes of the developed world. Hard stop. And Capitalism is failing, miserably, across the West. The fundamental restructuring away from Shareholder Capitalism that was called for by the collapse of the global economy in 2008 never happened. Instead the geniuses with their PhDs in Economics simply spent trillions of dollars to restore the status quo and an economic system that had just failed, rather spectacularly, and poured fuel on the already raging fire of inequality to the point that is has now reached society-destabilizing levels across the West. The opportunity costs will be staggering, because now, the collapse of the Ponzi scheme that is the global economy is inevitable. And the EU is like the USSR in the late 1980s, with the growing sense that it was becoming more and more obvious with each passing day that it would not survive, and everyone was just waiting for a catalyst that would trigger it's collapse. For Europe, a significant economic downturn will do the trick. And so the occupants of the clown car that Draghi has been driving have every reason to panic.

Its almost as if the entire global economy is now addicted to low funding & borrowing costs, & any attempt to normalize funding costs is met with a panic attack & immediately needs to be dialed back to allow the economy to function.

Well trumps plan is apparently working, destroy the worlds economy and give whats left to Putin.

Thanks for a helpful update on what's going on in Europe. The graphic is excellent.

The Trump recession is on the way. Just like every Republican President: massive tax cuts for the rich followed by economic disaster. Thank a Bernie Sanders supporter - this didn’t have to happen.

They probably are hedging their bets about the impact of a hard Brexit on the remaining EU economies as well as the likelihood that Trump will hit the Germans with auto tariffs at that maximum point of weakness.

The action by the European Central Bank (ECB) highlights two issues. The key for me is the second point, which is largely ignored here. 1. As the article mentions, the economy in the EU has slowed down, in some cases (Germany) quite a lot. 2. Hidden in this announcement is one of the key reasons why so many in Europe are disillusioned with the whole idea of having the Euro and being in the EU. So, commercial banks will again get money at zero (!) percent interest rate from the ECB if they then lend that money to customers. However, the banks will, of course, charge interest for those loans. So, free money comes in, interest-bearing loans go out. Thus, this so-called stimulus is, in reality, yet another huge giveaway for the banks, which will then pay their executives huge salaries and bonuses because they are such geniuses. That kind of stupid policy is one of the reasons why so many in Europe are sick and tired of the EU. If the countries of the Euro-zone want to stop the spread of extremist, euro-sceptic parties, reforming the ECB and its charter might be a good start. Having mechanisms in place at the ECB that lets governments get interest-free loans for infrastructure projects (renewable energy, high-speed rail, high-speed internet, fast wireless build-out) might be a better way to jumpstart the economy in Euroland without making the fatcats even fatter.

Leave it to humans to come up with a thoroughly self destructive economic system designed by the rich to benefit the rich, and leaves the rest of the world fighting for basic necessities and survival.

Here we go again. Ready for the everything bubble to burst? Well, the various central banks do NOT want it to happen. So they will continue allowing corporations to make obsene amounts of money by continued shrinkification and degradation of goods. Stealth inflation by wealth transfer by ultralow interest rates will continue to destroy the unrich masses’ standard of living (particularly those in the US who lack basics like universal health care). The rich people who own this world can also reap the low interest rate perks of higher stock prices and continued unparalleled prosperity while the rest of us continue to fight for a smaller piece of the pie. Not to mention the coming ecological disaster of climate change and the scourge of plastic, pharmaceutical and chemical pollution being found everywhere in this world we all live in. And so it goes.

I think the ECB is doing the prudent thing. I recently returned from Italy, and the political and economic situation is a mess - volatile, really. The last thing the EU needs is a sharp downturn that would inject fresh venom into the nationalistic movements that remain active throughout the continent. Capital must be created for investments in jobs It is critical that the center hold.