The Eurozone Slowdown Is Worse Than The Global One "One of the most repeated messages among European financial analysts this week is this: “we are in a global slowdown”. However, the sentence hides important nuances and very relevant differences. The European Union suffers a severe slowdown. The rest of the world only a moderate reduction in the pace of growth." No, we are not. The US is doing quite well. Thank you very much. Yes, the doom and gloomers are once again forecasting recession and stock market collapse, but then they do that every six months once the economy gets about 3-4 years out of a recession. These people squawk the same stuff year after year until unsurprisingly they accidentally get it right, stopped clock and all! "Data from the United States tell us something very different from what we get from the Eurozone. Retail sales rose 1.6% in March in the US and the implied annualized growth rate for the first quarter remains above 2.1%. If we look at the employment data, the United States only sees a slight moderation in employment growth … But we are talking about the creation of 196,000 jobs, a figure that indicates much better growth. than other similar economies. The same applies to the latest manufacturing and service indices: They remain above 50 (in expansion). The Markit service index was 56.3 compared with an expectation of 54.8 and the compound showed a figure of 54.6 compared to the previous 54.3. The economic surprise index of emerging markets also indicates an improvement. A strong but stable dollar (DXY Index) has not damaged the macroeconomic figures of the main emerging economies. It is true that the “usual suspects”, Argentina and Turkey, have seen their currencies plummet against the dollar, as they continue to implement counterproductive monetary policies of financing public spending with direct printing of currency. However, the macro data of most emerging countries as a whole is better than expected, and that must be acknowledged. Brazil was the latest to show a marked improvement in the Economic Activity Index in February. The prices of commodities have helped, but that tailwind is not the main driver. We cannot be complacent, but the recent capital outflows seen in March are modest compared to the inflows into February." Ignore the Chinese data they are lying as usual and we know very little, but the information for the better inside sources is bad indeed. "So, where is there evidence of stagnation? In Europe and Japan. Japan’s manufacturing PMI came at 49.5 and Output at 47.9. Both in 3rd-month of contraction. The Japanese slowdown does not surprise anyone anymore, because it is in its third decade of stagnation repeating the same mistakes of disguising the demographic and productive model challenges with misguided Keynesian government spending policies and more debt. The most concerning problem is Europe. A European Union that completely abandoned its reform agenda to bet it all on the mirage of monetary policy, while economic, demographic, state and political risks rise. The data from Germany remains poor, but the country enjoys enviable unemployment, trade balance and fiscal strength. However, in the rest of the Eurozone, the fragility of the economies is linked to both fiscal imbalances and excessive interventionism that make them more vulnerable to a change in the cycle. At least in France, from where I write this article, the debate on television and media is constant. The entire country is aware that the slowdown is severe and tax reductions and measures to strengthen economic performance are announced. The word “crisis” appears on the front page of newspapers and economic programs as a real possibility. In the periphery, countries must be aware that they have exhausted their fiscal space and acknowledge their vulnerability to a modest change of cycle. Spain is not immune to these risks. The OECD index of leading indicators already shows a negative figure and the leading indicators published by the Ministry of Economy also reflect more than ten in negative territory. That’s why the Eurozone should be more prepared. Because most countries do not have the capacity that others have to confront a slowdown." It is long past time to let Japan and Europe go. Japan and Europe are nihilistic progressive zombies. They continue to double down on every idiotic progressive policy and have for decades. Sure, the Eurozone and the Euro gave the Europeans a short if false reprieve. But what it did was allow the spendthrift southern nations to exchange high-interest loans for ultra-low interest loans once the lenders were confused into believing that Greece, Portugal, Spain, and Italy (and others) were thrifty Germany or The Netherlands. They are not, and never were. The consequences plunged the southern EU nations into depression and sucked the north into recession. Until they all stop this nonsense, this is the direction of travel. Japan is even worse off. After three decades now going on four, they still believe the progressive economic nonsense that sunk them in the first place. They cannot learn from their mistakes. It is time to walk away from these economic vacuum nations before they suck the US or other nations past their economic event horizon. After the implosion perhaps we can talk, but for now, don't walk away, run. We should set up a free trade zone with the UK, Australia, New Zealand, the Scandinavian nations, Finland and perhaps a few other former British colonies. If that works out, then we can begin opening membership to other nations which reform, walk away from progressive economic nonsense, you know socialism, and accept the what we know works here at the end of history: free markets, rule of law, republican governance, individual liberty, personal responsibility, reformed religions, property rights, you know capitalism!
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