The Earth may be turning, but the economy is at Dead Stop
‘Germany has not moved one inch towards fiscal union of any kind’ writes Ambrose Evans-Pritchard in today’s Telegraph.
And I’m afraid he’s right. Merkel is a crafty minx, and no mistake: she appeared to have buckled yesterday, but now she’s upped and said “Oooo nein, you misunderstood me”. This isn’t playing well in either Washington (where Geithner is tearing his hair out by the roots) and back in Bankfurt, where – I’m told – even Draghi looked exasperated after taking a phone-call from the Ostikanzler yesterday late afternoon.
“It goes back to what I told you last year,” an equally Merkeled-out diplomat in Paris told me this morning, “You never know at any time which Germany you’re talking to. A few here have given up hope.”
Meanwhile, the world heads on down into the vortex, ignoring the Antics Roadshow above. The flight of eurodeposits remains as it’s been for some time: Zurich, Frankfurt’s ECB, Bankfurt per se, and to a lesser extent Paris. French and Italian visitors to Switzerland are bringing currency in by car, and the Swiss police are searching every fourth vehicle. It beggars belief that the ‘machinery’ in Brussels just sits there round tables handing out fantasy press releases while Europe’s fiscal and economic structure crumbles.
Even Obamite New York Times columnist Floyd Norris said Friday’s US jobs report “was worse than almost anyone expected.” He too is right, but the picture as a whole is doing little more than fulfil The Slog’s expectations. Europe’s entire banking system risks collapse. Greek and Spanish banks face panic withdrawals. In April, Spanish retail sales plunged 9.8% – the sharpest monthly drop on record.
Chinese manufacturing declined for the tenth time in eleven months. Bank lending missed government targets by about $200 billion. Brazil shows increasing weakness. India is in a steeper output plunge than is being admitted by the Government. South Korea and Australia are beginning to realise they face a crash, especially the latter. Korea has a better chance of coming through, on the grounds that there are no Wayne Swans there.
UK manufacturing hit its lowest level since May 2009. In May, it showed contraction, in what was the sharpest single month decline since November 2008.
The world is coming to a halt. And the varietal factors behind this – debt fears, insane austerity, QE wasted on bank support, redistribution of wealth away from the mass market, stealth taxes, Zirp wiping out silver spenders, Brussels inaction, Wall Street over-leveraging, IMF underfunding and over-demanding – are all different symptoms of the same disease: this globalist, suprastate, finance-obsessed model of capitalism is wrong, wrong, wrong.
Meanwhile, stand by for a new development – predicted here some time ago, and connected to the fact that Global commodity prices had their worst decline in four years during the last four weeks.
The next post will flesh out the detail on a new (and very big) potential Sovereign casualty. Stay tuned.
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Lucas 2012 Infos 