[BrianC]

Posted by msmash on Monday September 11, 2023 @04:01PM from the shape-of-things-to-come dept.
The European Union has lowered its forecast for economic growth this year and next, saying inflation is taking a heavy toll on people's willingness to spend in shops -- while higher interest rates are sharply restricting the credit needed for investment and purchases. From a report:
The revised forecast Monday from the European Commission, the EU's executive arm, comes as fears of recession grow and as the European Central Bank faces a key decision this week on whether to keep raising rates, which are aimed at getting inflation under control. The 20 countries that use the euro currency are expected to see growth of 0.8% this year instead of 1.1% projected in the spring forecast, the commission said. For next year, growth expectations were lowered to 1.3% from 1.6%. For the broader 27-country EU, the forecast also was lowered to 0.8% from 1% this year and to 1.4% from 1.7% next year.

"Weakness in domestic demand, in particular consumption, shows that high and still increasing consumer prices for most goods and services are taking a heavier toll than expected," a commission statement said. EU Economy Commissioner Paolo Gentiloni said at a news conference that "further weakening in the coming months" was foreseen as the economy faces "multiple headwinds." One source of uncertainty is how far the ECB will go on interest rates -- more expensive credit restrains economic growth in some areas such as real estate, but if higher rates succeed in lowering inflation, that would boost consumer spending power.
https://apnews.com/article/european-eco ... 76eee9695c

[Tuike]

I thought Cons was supposed to be construction, but it was consumer spending.
At least in Finland, construction of new houses has halted, as new homes don't sell. Mass bankruptcy wave hits house construction companies.

[yellowcanoe]

I thought Cons was supposed to be construction, but it was consumer spending.
At least in Finland, construction of new houses has halted, as new homes don't sell. Mass bankruptcy wave hits house construction companies.

Just send all your construction people to Canada. With our insanely high number of new immigrants, international students and temporary foreign workers we are millions of housing units short.

[evilgenius]

Alright, I will tell you a secret. The West is about to defeat China. They are going to use high rates to do it. They are hoping the effort won't also destroy them.

China is a few months away from an economic crisis akin to what the US underwent when it began the Great Depression. The only thing is, China is even more vulnerable than the West right now because housing is a much larger component of China's economy than anywhere in the West. High rates will make the West suffer. They will box China completely. The only question is whether certain interests in the West who don't want to suffer will have their way, stopping the rate cycle, before China falters?

[theluckycountry]

I thought Cons was supposed to be construction, but it was consumer spending.
At least in Finland, construction of new houses has halted, as new homes don't sell. Mass bankruptcy wave hits house construction companies.

Same here in Oz

[theluckycountry]

Alright, I will tell you a secret. The West is about to defeat China. They are going to use high rates to do it.

Well the analysis I read suggests that the US, who led this series of rate hikes, is doing it to destroy the EU via the Eurodollar market. Over there they use the US dollars to create loans, the fractional reserve system, and because the money is controlled by the FED they are powerless to what happens to it's rates.

China is a few months away from an economic crisis akin to what the US underwent when it began the Great Depression.

Yes well, that's a popular meme... We'll see how well your prediction holds, but China is a leading partner in the BRICS, and they are totally outside of US dominance. They are the NWO IMO.

What Is the Eurodollar?
The term eurodollar refers to U.S. dollar-denominated deposits at foreign banks or at the overseas branches of American banks. Because they are held outside the United States, eurodollars are not subject to regulation by the Federal Reserve Board, including reserve requirements.
...Deposits from overnight out to a week are priced based on the fed funds rate.
...Most transactions in the eurodollar market are overnight, which means they mature on the next business day.

https://www.investopedia.com/terms/e/eurodollar.asp

Europe became a slave to the $US after WWII and have been ever since, the $EU market is calculated at about 50 Trillion now. Word is the the current chair of the FED is a real patriot, from a long line of patriots and that's what behind the current move. The suggestion is he wants to squeeze out the big euro banks so the US can maintain dominance of world financial affairs. He's a Trump appointee remember...

Powell, a former Carlyle Group executive, a wealthy, mild-mannered Republican businessman. Despite his wealth, friends and former colleagues of Powell's describe him as “annoyingly normal.” He lives in Chevy Chase, Md., and often rides his bike about eight miles from home to the Fed. He doesn't drink much, plays golf and the guitar, and has an odd ability to repeat people's sentences backward to them, a quirk former colleagues say is a reminder of his smarts — and how closely he listens.

After Powell left the Carlyle Group, he got involved with several charities, including the Nature Conservancy and a Washington charter school operator, and wanted to get back into public service, ultimately leading him to the Bipartisan Policy Center.

https://www.washingtonpost.com/news/won ... the-1940s/

Just because the FED is a corrupt entity fleecing the US public doesn't mean it can't perform patriotic acts. Screwing over the Europeans in no way effects it's primary function, that of enriching US banking houses, and any looting of Europe for the benefit of America is a win for it's people too.

“Down The Rabbit Hole” — The Eurodollar Market Is The Matrix Behind It All
https://t1mproject.medium.com/down-the- ... a054dd4b0f

[evilgenius]

I say it with more certainty than I really have. I say it that way because I have a rational set of expectations for what will happen next in China, based upon what I know of the conditions. I'm not anti-China. I don't have a bias against them that leads me to the conclusion that they will enter what could be a depression.

It's about the reneging on debt that is happening over there. Simply, the only way that money can be destroyed is for entities that owe debts to renege on them. The destruction of money is highly deflationary. This year, China began to enter into deflation. I think the problems are only beginning. I compare the crisis to the Great Depression because the Depression was characterized by deflation.

A great part of the success of America in the Twentieth Century was due to something people don't think about. They don't credit the philosophical ideas that came with saying that the government has a role in the economy with providing a lot to the mental inertia that led to the success of the US. Instead, most people like to talk about how strong the US military is. You get things like Vietnam, however, when you do that. You get a huge current investment into things that everybody thinks will work, and little or no investment in things that do.

In my mind, the biggest problem with communist regimes like the one in China is that they profess to come in the name of the people, but the only concept of the people that the leadership has is the one they want the people to be like. The Soviets were the same way. Being in power just meant meet the new boss, he's the same as the old boss. It's just that, now, there is a whole set of arguments in place to make you feel guilty when you point that out, so that the communist leaders can stay in power.

I wonder if the Chinese leadership will step up and provide economic support to the everyman, where the everyman lives, or if they will act like the US did during the Depression? Because it took a long time for the right wing in the US to quit stopping the efforts to block what was working. In order to act according to what they thought was right, they were willing to sacrifice the common man. As long as the US kept thinking that way, however, the great miracle that took place there wasn't going to happen.

I know it's popular to wrack the Fed, but you are working on the wrong end of the facts when you do that. I criticize the Fed for their inattention to the plight of the working man having seen his wages stagnate since the 70's. I don't criticize them for their very existence. Because they have allowed the fulcrum which they use to make rate decisions to be that of how much employees could gain vs. employers, not a separate worked out idea of what constitutes a healthy economy. America has its own set of excessive consumer debt because of that, but it does also have a huge monetary value globally. But, oh, the vulnerability! You can't allow your population to make its own decisions. They must be homogenized out of that.

[theluckycountry]

Oh I don't have a problem with central banks, without them and the large commercial banks they work for we wouldn't have the world we now live in. They loaned the money to build the bridges and manufacturing plants, loaned the municipalities the money to make the beautiful blacktop I ride along. I just know it's all unsustainable, like the US debt is unsustainable. Sure China has a debt deflation to recon with but nothing on the scale of the US debt quandary.

The massive increase in money created by these entities has built the world be live in but in so doing they have been sucking the Earth dry of it's natural resources at an ever faster rate. Après Moi le déluge, the old French saying goes, "after me let the floods come" it applies nicely to what I see. Sometime in the years or decades to come there will be a reckoning, but knowing this allows a person to convert this funny money into real wealth at suppressed prices. The world's nations were turned into factories and oil has driven prices ever lower allowing a person to stock up on all little niceties of modern life before they go insane in price.