Sadly, Europe is done. Years of socialism and, now, repression of everything that does not involve the government rulings, has taken away the spark and the cultural differences that made each country delightful to visit. Glad I saw it when! I do not care if I ever visit Europe again.
Americans are tired of supporting other countries. I never was an isolationist, but now it sounds like a good idea. Under Biden, the amount of illegals, so-called “migrants” and criminals entered our gates in the thousands. The same in Europe. Until people stand on their own feet, work, and break free from the idea that the governments of the world owe them everything for free…all countries are at risk. European leaders peddling “social justice” do not even know what they are talking about. Yes, it is happening here, as well. Over- regulated businesses can not stay open. Look at the Covid-19 debacle. That almost destroyed America.
Thank you for the good article. , Lau! Enjoy your travels, and stay SAFE!
I agree with this fine article on everything although when it comes to defense spending the free ride given to Europe during the cold war should have ceased in 1991 and along with it NATO. The war in Ukraine was a result of the continued existence of NATO and US neocon, State department and Administration influence and interference. The pushing by the west has put Russia in the same camp as China which could have been avoided but now the EU is obsessed with Russia as a last desperate deflection/distraction from their green theocracy (and central planning) responsible suicidal economic decline.
I’ll have to mildly disagree (a first) with the thesis that European problems will drag America into recession. Firstly, as you state, Europe is making less and less non-Europeans want to trade for. While GDP declines, more of the economy is government based - hardly productive industry. What do Americans (the largest economy) want from Europe that it can’t by from China? Great non-GMO non-pesticide flour?
On top of the trade issues, the Euro is more debt laden than the dollar. While no pristine currency, capital will travel to the States, further draining the meager investments available for development.
What made Europe distinctive was excellent manufacturing quality (German automotive), fashion from Italy…abandoned by choice over a generation. The carcass that is Europe is now being eaten away by migrants.
Thomas, thanks for your take. Honestly we're not that far apart. I definitely agree that Europe makes less that the world wants, the economy is turning into a government jobs program, and capital is already voting with its feet toward the States. No argument from me.
On the debt, though, it's actually the other way around. The eurozone as a bloc sits around 88% of GDP, while the U.S. government is north of 120%. Plenty of individual European countries are a mess, true, Greece, Italy, France. But the bloc as a unit is less leveraged than Uncle Sam. And yes, money still flows to the dollar, but that's not because the U.S. government's books are cleaner. It flows because the dollar is the reserve currency and U.S. markets are the deepest.
But I’m with you: it was never that America needs Europe's flour, or can't buy what Europe sells somewhere else. She absolutely can. But that doesn't change the fact that close to $2 trillion in goods and services still cross the Atlantic every year, and American companies, the big S&P names especially, earn a large slice of their profits over there. When Europe stalls, that demand softens and those earnings thin out. And the capital flight you describe cuts both ways: money rushing into the dollar pushes it higher, which makes every American export pricier and harder to sell. Not to mention the whole banking plumbing (still lashed together on both sides of the ocean).
So I'm with you that America is in better shape, and I said as much in the piece. I just wouldn't mistake "stronger" for "insulated." Appreciate you reading closely enough to disagree.
Important history right up to the present moment in Lithuania, thanks for the reminder of your beutiful homeland’s long and important heritage, and how damaged Europe is now, in itself (so sad) and as our trading partner, and how that will affect developments in future years. Yes, give us more once you and your family settle in to Spanish life, and do have an excellent summer!
Well, if you want a cleaner world, you are going to have to contract your economy and stop consuming so much. From another perspective, the declining EROI of fossil fuels PLUS the debt deflation spiral exacerbated by the Iran War and the closure of Hormuz means that the global economy is subject to recession, depression and collapse. Now add in the differentiation of complex economies, like France and Germany, versus hypercomplex economies, like the US and UK.
The fact that EU economies are contracting without imploding is a good thing.
Sadly, Europe is done. Years of socialism and, now, repression of everything that does not involve the government rulings, has taken away the spark and the cultural differences that made each country delightful to visit. Glad I saw it when! I do not care if I ever visit Europe again.
Americans are tired of supporting other countries. I never was an isolationist, but now it sounds like a good idea. Under Biden, the amount of illegals, so-called “migrants” and criminals entered our gates in the thousands. The same in Europe. Until people stand on their own feet, work, and break free from the idea that the governments of the world owe them everything for free…all countries are at risk. European leaders peddling “social justice” do not even know what they are talking about. Yes, it is happening here, as well. Over- regulated businesses can not stay open. Look at the Covid-19 debacle. That almost destroyed America.
Thank you for the good article. , Lau! Enjoy your travels, and stay SAFE!
Sadly, I agree. Thank you, Lauran.
I agree with this fine article on everything although when it comes to defense spending the free ride given to Europe during the cold war should have ceased in 1991 and along with it NATO. The war in Ukraine was a result of the continued existence of NATO and US neocon, State department and Administration influence and interference. The pushing by the west has put Russia in the same camp as China which could have been avoided but now the EU is obsessed with Russia as a last desperate deflection/distraction from their green theocracy (and central planning) responsible suicidal economic decline.
I’ll have to mildly disagree (a first) with the thesis that European problems will drag America into recession. Firstly, as you state, Europe is making less and less non-Europeans want to trade for. While GDP declines, more of the economy is government based - hardly productive industry. What do Americans (the largest economy) want from Europe that it can’t by from China? Great non-GMO non-pesticide flour?
On top of the trade issues, the Euro is more debt laden than the dollar. While no pristine currency, capital will travel to the States, further draining the meager investments available for development.
What made Europe distinctive was excellent manufacturing quality (German automotive), fashion from Italy…abandoned by choice over a generation. The carcass that is Europe is now being eaten away by migrants.
Thomas, thanks for your take. Honestly we're not that far apart. I definitely agree that Europe makes less that the world wants, the economy is turning into a government jobs program, and capital is already voting with its feet toward the States. No argument from me.
On the debt, though, it's actually the other way around. The eurozone as a bloc sits around 88% of GDP, while the U.S. government is north of 120%. Plenty of individual European countries are a mess, true, Greece, Italy, France. But the bloc as a unit is less leveraged than Uncle Sam. And yes, money still flows to the dollar, but that's not because the U.S. government's books are cleaner. It flows because the dollar is the reserve currency and U.S. markets are the deepest.
But I’m with you: it was never that America needs Europe's flour, or can't buy what Europe sells somewhere else. She absolutely can. But that doesn't change the fact that close to $2 trillion in goods and services still cross the Atlantic every year, and American companies, the big S&P names especially, earn a large slice of their profits over there. When Europe stalls, that demand softens and those earnings thin out. And the capital flight you describe cuts both ways: money rushing into the dollar pushes it higher, which makes every American export pricier and harder to sell. Not to mention the whole banking plumbing (still lashed together on both sides of the ocean).
So I'm with you that America is in better shape, and I said as much in the piece. I just wouldn't mistake "stronger" for "insulated." Appreciate you reading closely enough to disagree.
Well done
Important history right up to the present moment in Lithuania, thanks for the reminder of your beutiful homeland’s long and important heritage, and how damaged Europe is now, in itself (so sad) and as our trading partner, and how that will affect developments in future years. Yes, give us more once you and your family settle in to Spanish life, and do have an excellent summer!
Thank you, Jay. Really appreciate that. Hope you have a great summer too!
we have exported inflation to everyone and yes, it will come back around.
Well, if you want a cleaner world, you are going to have to contract your economy and stop consuming so much. From another perspective, the declining EROI of fossil fuels PLUS the debt deflation spiral exacerbated by the Iran War and the closure of Hormuz means that the global economy is subject to recession, depression and collapse. Now add in the differentiation of complex economies, like France and Germany, versus hypercomplex economies, like the US and UK.
The fact that EU economies are contracting without imploding is a good thing.