Say goodbye to Europe. Last week — if you were paying attention — the facts finally came out. The EU is in dire straits.
For the first time, experts admit Greece will have to exit the EU. But that's just a small part of a very big problem. Europe is broke. The EU is on the verge of economic catastrophe.
It's that bad.
|German Chancellor Angela Merkel and the new French president Francois Hollande address a press conference at the German Chancellery today.
We were frightened a few years back by the potential failures of industries like automakers, banks, Wall Street, and even Fannie Mae and Freddie Mac. But now an entire continent is about to fail.
How bad are things in Europe? The nation "formerly known as Greece" reports 22 percent unemployment — 54 percent unemployment among citizens under age 25 — and 42 percent higher unemployment than a year ago.
But here’s the big clincher: There are now only 4 million Greeks still employed to pay off hundreds of billions in EU bailouts and over 200 percent debt to GDP ratio. And more of them are leaving for Germany every day as they realize that life is over for them in Greece.
The truth deniers of Europe have finally come to terms with Greece leaving the EU. It’s only a matter of “when,” not if.
I wonder if Greeks say "Opa!" when they break an entire country? The real problem is that Greece is the smallest problem for a leaking EU.
Spain continues to be the biggest catastrophe facing the EU — and the main reason Germany is building bigger printing presses and willing to accept inflation as the lesser of two evils. Spain's situation is so bad that they just nationalized their fourth largest bank last week (with many more on the way).
The Spanish public and private debt situation can only be described as tragic. Interest rates on Spanish bonds rose above 6 percent last week — another ominous signal of what's to come.
Italy is hanging by a thread, but that's an old story.
Then there’s France. The brilliant French people, sick of making do with less, elected a Socialist government last week. Their new Obama-like leader promises to save their collapsing economy with fantasy, bread and circus.
He promises to increase spending, dramatically increase taxes on the wealthy (who are all making plans to flee), hire 60,000 new teachers — and here's where the French rely on comedy to hide tragedy — repealing the age of retirement from 62 back to 60. It’s time to write off France.
Paying 10 cents on the dollar for France's future would not be a bargain.
The synergy of all this is the problem. French banks are four times bigger than the GDP of their entire economy. If French banks go under, there is no way for France to survive. Yet France’s banks have loaned lots of money to Spain.
If Spain’s banks go under, France’s banks are dead in the water. If France’s banks go under, so does France. If France goes, that puts Italy and the rest of the continent over the tipping point.
American banks also have huge loans outstanding to all these countries. The $2 billion trading loss disclosed last week by JP Morgan (my sources tell me it could be closer to $10 Billion or higher) will look like a drop in the bucket when the EU countries start defaulting, one after the other.
But there is good news in all of this. There can be joy in failure — but only if you turn failure into a learning experience. You must face the facts and learn lessons from your mistakes. Europe is "the canary in the coal mine" for America.
The EU is filled with socialist or semi-socialist countries that tried to solve their economic problems with big government, big spending, and big taxes. And they ignored big debt. This is the same as Obama's agenda.
You'll notice Obama never uses the European economic model as an example anymore. Suddenly the cat has Obama's tongue.
The lesson to be learned here is to run the opposite way — away from big government and socialist cradle to grave economic systems. The truth is now clear to anyone with a brain. They are unaffordable. They bankrupt industries, economies, nations, and now entire continents.
The EU is a train wreck of epic proportions because of the exact same agenda that Obama is trying to stuff down our throats in America — big government, big spending, big taxes, big entitlements, big unions, big pensions, too many overpaid government employees, free healthcare, billions wasted on green energy, and billions more on high speed rail.
The golden lining in this entire mess is that we now have a model to save America. It’s simple. Do the exact opposite of everything the EU has done. When you walk into the voting booth, scream to yourself, "We don't want no stinkin' Europe."
Obama understands only too well what is happening. What a perfect time to change the conversation to gay marriage.
Wayne Allyn Root is a former Libertarian vice presidential nominee. He now serves as Chairman of the Libertarian National Campaign Committee. Read more reports from Wayne Allyn Root — Click Here Now.
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