World Bank In Doomsday Economic Warning
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  • Anthony

    “Macroeconomic indicators for the United States have been better than expected for last few months….But despite the favorable data, U.S. economic growth will remain weak and below trend throughout 2012. Most importantly, the U.S. – and many other advanced economies – remains in the early stages of a deleveraging cycle. Finally, there are those tail risks that make investors, corporations, and consumers hyper-cautious.”

    The above WRM sums up economic sentiment in World Bank’s gloomy forecast – I suspect most investors will wait and see given both large and small risks.

  • Jim.

    If anyone is wondering why human history has its crashes and catastrophes, this is it.

    Some people (in this case the French and Southern Europe) hold to an untenable position even as the long-term disasters that position causes are looming up to become short-term. They refuse to make the necessary changes because they are “painful” and have become moreso, because people have become accustomed to the shortsighted benefits of the untenable system.

    Making matters worse are opposing forces that do not hold the line because they don’t want to be blamed for the inevitable catastrophe.

    Let’s be clear here: Germany is not “the cause” of anyone’s pain. Greeks, Italians, and the French are the cause of their own pain. The fact that Germany has played along for this long, in deference to the wishes of fools, may be “nice” but it’s a strategic error. Now, the pain isn’t going to be simply on the Southern side; the Germans are going to have to pay as well, as their economy got much too used to the web of lies, deception, and bad-faith promises that are the French, Italian, and Greek (public and private) financial systems.

    Professor Mead, I hope you are teaching your students of Strategy at Bard College to identify and avoid situations like these, and to be implacably dedicated to unwinding them whenever they are identified as operating already.

    God have mercy on the Southern Europeans for their over-promising Eurosocialist ways, trusting man-made government before You; God have mercy on the rest of us for playing along with the lies, deceit, and bad faith for so long.

    Europe’s crash is going to be painful.

  • Kenny

    Jim @: “Europe’s crash is going to be painful”

    It couldn’t happen to a more deserving bunch of snobs.

  • Constitution First

    If this is “Change”, I want it changed back.

  • Jim.


    Better to hope and pray for their repentance than to hope and pray for their destruction. It might make it possible to solve the problem, or if nothing else, rebuild something that works after the dust settles.

    Personally, I suspect the German electorate will be no more willing to endorse a “Sarkozy plan” to provide the financial underpinnings of the demographic, industrial, and financial disaster that is Eurosocialism, than they were willing to accept the Young Plan eighty years ago, when they were expected to underwrite a less serious disaster than Eurosocialism.

    One hopes that the vehicle for this rejection is a government like Ms. Merkel’s. The historical alternative is too terrible to contemplate.

  • WigWag

    This post says it all; Europe is floundering while the United States slowly but surely recovers. It’s easy to explain the discrepancy. While Europe thought austerity was the answer and cut government spending, the United States adopted an inadequate but still substantial countercyclical stimulatory policy. Keynes was proven right once again; fiscal hawks look like doped once again.

    While the Federal Reserve did everything it could to provide liquidity, the ECB was stupidly worrying about inflation and talking about raising interest rates.

    Europe adopted the policy prescriptions recommended by the Tea Party; those policies have been proven ineffective.

    No one has been proven more wrong than Professor Mead’s new hero, Prime Minister Cameron.

  • richard40

    Europe is going to crash, and the crash will send us into deeper recession as well. The only real area of doubt is whether the crash will happen before the november election, or after. I hope before, since it will expose Obamas talk about the US economy being in any long term turnaround.

    With a new president, the US still has a chance to start paying off its debt, and thus avoid being dragged down with Europe. If Obama wins, better start saving gold, gasoline, food, and guns. The gold will preserve some savings as the fed continues hyperinflating our money away. The food and gasoline will allow you to continue living once people wont even take the gold anymore. The guns will prevent the Obama dependent looters, who have not made these preparations, from stealing the 1st 3.

  • richard40

    To Wig Wag.
    What a stupid comment. If Europe had adopted Tea Party policies 10 years ago they would have avoided this mess in the 1st place. And England, which has adopted austerity voluntarily, before they went completely broke and the bond market forced them to, seems to be surviving much better that the Southern Europe spendthrifts. As for why the US is not as bad as Europe, that is obvious, we only became totally socialist in the last few years under Obama, so our remaining businesses still have some money left for the Obama gov to loot, providing him with a temporary delay in our complete crash. But our debt under Obama is now greater than our GDP, and will soon approach Greek levels, with the same result.

  • Jim.


    Didn’t Obama’s major stimulus package this year fail miserably in both houses of Congress, except for… what was it… the tax cuts?

    You’ll have to forgive my uncertainty, after I heard the bill was DOA I stopped paying much attention.

  • Jacksonian Libertarian

    Europe must correct from the inefficient Blue Model Welfare State, and the only way for them to do that, is the hard way.
    “Example is the school of mankind, and they will learn at no other.” Edmund Burke
    Even Germany is only relatively stronger, the average German makes only 75% ($35k) as much as the average American ($47k), 30 years ago the averages were close to the same. All of Europe must go through the crucible, and be forced to change.
    Europe’s culture is inferior to that of US culture; they lack Special Providence someone said. You don’t see any TEA Party rally’s in Europe organizing for limited Government, only Occupy Wall-street demonstrations and riots, demanding more from the Government.
    These reasons lead me to believe that the US will correct course, and begin recovering after the next election. The Europeans on the other hand, will be in turmoil for a very long time, with declining standards of living despite continued technological advancement. The Europeans have made too many mistakes, and refused to adopt the superior American culture.
    To WigWag I say:
    There’s a reason it’s called Capitalism, as Capital is what fuels it. The only reason the US is doing better at the moment is that the Government is only draining $1.3 Trillion from the fuel tank when they were draining $1.8 Trillion. The lessened burden has allowed sufficient fuel to stop rolling backward, but is totally insufficient to get the economy moving again. There are 8 million fewer Americans working now than there were before the beginning of Great Depression 2.0.

  • Emy

    I am no expert on the economy. But I have been around for 50 years. The only thing that has kept America going during any crisis is the ability of its people to be strong. They had heart, were hard working, and genuinely cared for one another. But I am concerned here of late, an ugly seed has been
    sprouting. Its called selfishness and self pity. Where is this weak breed coming from?

    First in consideration of our government. BEWARE! There are none who are truly loyal to the people. They are only sheeple serving the folks who live in Dubai.
    Next,Think about our options in this country. Something is very wrong when you are only given two political choices. One group are sheep in wolfs fur, the other, well they don’t give a damn what you see or know about them. They keep people busy by giving lip service to far fetched causes that should not even be in government. We are suppose to embrace their far fetched ideals and infringements or suffer the torturous fits and disgusting displays of ignorance. Guns,God,Gays and abortion. Really? Do you think any of them really care? Oh how they keep you busy. Not the working mans party. Not the party it used to be. My dad would roll over in his grave.
    They are keeping the people busy and they just follow along. For the last 30 years same [stuff] just another day.
    I have seen many mistakes in the last 30 years. The only prosperity I witnessed was during Bill Clintons term. Sorry I don’t buy the fact that he was embracing what Reagan laid out for him. He was a great manager. As far as a little immoral act, PLEASE, we should be worried more about the power mongers and ruthless money changers.

    When a government pays people more money to stay home than to work, it is asking for trouble. I believe President Clinton initiated a work program where it did not matter what your situation, you had to work somewhere and then you were entitled to supplemental income. People shared experience, opportunities, and were educated. Everyone contributed. When people stay home, with no job, and nothing to do, they get board and become dysfunctional.
    Many people today don’t work because they don’t have to. Disability along with a side job for cash and having kids for money is the new career path of choice. Hello! Can we find a disability doc? Please! What happens when nobody works and the taxes run out. America you are your own disability. Your fat and lazy. Ya think the wealthy are going to bail you out. Na, they will be working on their own bail out. Our government will print more money, give it to the chosen few, and have them go over seas and piss off some more countries. FYI, Obama did not give the first bail out. Wake up folks,the Busch admin. did. I told ya they are all in bed together.
    I got news for everyone. The money train is running out of steam. Foreign countries are tired of the scam. As for this country, our companies who ran out on the people who made them great will suffer. It is just a matter of time before the China man and Hispanic people say sorry we will not work for a few cents we want decent money for our efforts. Then the chosen few will have to share the wealth or I guess they could go back to slavery. It is probably in the future plan, but remember, when everything falls apart, money will not feed ya and it won’t buy you slaves. Oh and by the way, the last time I checked people can’t eat paper, gold or silver. Try to eat stocks and bonds. If you are one of the selfish people, I hope you choke on your evil, selfish intentions and investments.

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