19 Reasons to Start Preparing for a Global Economic Collapse

Michael Snyder, Contributor
Activist Post

Yes, it is officially time to start freaking out about the global economy. The European financial system is falling apart and it is going to go down hard. If Europe was going to be saved it would have happened by now. The big money insiders have already pulled their funds from vulnerable positions and they are ready to ride out the coming chaos.

Over the next few months the slow motion train wreck currently unfolding in Europe will continue to play out and things will likely really start really heating up in the fall once summer vacations are over.

Most Americans greatly underestimate how much Europe can affect the global economy. Europe actually has a larger population than the United States does. Europe also has a significantly larger economy and a much larger banking system. The world is more interconnected today than ever before, and a collapse of the financial system in Europe will cause a massive global recession. Once the global economy slides into another major recession, it is going to take years to recover. The pain is going to be immense. Yes, that is going to include the United States. Sadly, we never recovered from the last recession, and it is frightening to think about how much further this next recession is going to knock us down.

The big problem is that there is simply way, way, way too much debt in the United States and Europe. It has been a lot of fun spending all of this borrowed money, but now we get to pay the price.

The following are 19 reasons why it is time to start freaking out about the global economy….

#1 The yield on 10 year Italian bonds has now risen to more than 6 percent.

#2 The yield on 10 year Spanish bonds has now risen to more than 7 percent. This is considered to be an unsustainable level.

#3 Citigroup Chief Economist Willem Buiter says that both Italy and Spain are going to need major bailouts.

#4 The Spanish banking crisis continues to get worse. The following is from aCNN article that was posted on Monday….

But the depth of the nation’s crisis has raised doubts about whether €100 billion will be enough to recapitalize the banks. For example, the Bank of Spain, the nation’s central bank, released data Monday showing that “doubtful” loans — those that are more than 3 months overdue — rose to €152.7 billion in April, equal to 8.7% of all the loans held by the nation’s banks.

#5 Unemployment in Spain is sitting at a record high ofover 24 percent with no hope in sight.

#6 Unemployment in the eurozone as a whole has hit a brand new all-time record high.

#7 The socialists won an outright majority in the recent parliamentary elections in France. That means that France and Germany are now headed in completely different directions. The close cooperation that we have seen between France and Germany in recent years is now over.

#8 New French President Francois Hollande has promised to implement a top tax rate of 75 percenton those making over 1 million euros a year.

#9 German Chancellor Angela Merkel has declared that Germany will not budge at all on the terms of the Greek bailout.

#10 Analysts at Citigroup Global Markets are projecting that the odds of Greece leaving the euro over the next 12 to 18 months are still between 50 and 75 percent.

#11 Money is being transferred from banks in southern Europe to banks in northern Europe at an astounding pace….

Financial advisers and private bankers whose clients have accounts too large to be covered by a Europe-wide guarantee on deposits up to 100,000 euros ($125,000), are reporting a ‘bank run by wire transfer’ that has picked up during May.

Much of this money has headed north to banks in London, Frankfurt and Geneva,financial advisers say.

‘It’s been an ongoing process but it certainly picked up pace a couple of weeks ago We believe there is a continuous 2-3 year bank run by wire transfer,’ said Lorne Baring, managing director at B Capital, a Geneva-based pan European wealth management firm.

#12 As I wrote about recently, about 500 million euros a day has been pulled out of Greek banks so far this month.

#13 The Bank for International Settlements is warning that global lending is contracting at the fastest rate that we have seen since the end of the last financial crisis.

#14 Lloyd’s of London has publicly admitted that it is making preparations for a collapse of the eurozone.

#15 Government debt levels all over the industrialized world have exploded in recent years. The following is from a recent article by Stephen Lendman….

Five years ago, OECD countries sovereign debt/GDP ratios were 70%. Today it’s 106% and rising.

Anything over 100% is considered to be an extremely dangerous level.

#16 The economic problems in Europe are already taking a toll on the U.S. economy. At this point U.S. exports to Europe are way down.

#17 One recent poll found that 75 percent of Americans are either “very or somewhat worried” that the U.S. economy is heading for another recession.

#18 Under Barack Obama, the United States has been indulging in a debt binge unlike anything ever seen in U.S. history. The following is from a recent Forbes article….

After just one year of the Obama spending binge, federal spending had already rocketed to 25.2% of GDP, the highest in American history except for World War II. That compares to 20.8% in 2008, and an average of 19.6% during Bush’s two terms. The average during President Clinton’s two terms was 19.8%, and during the 60-plus years from World War II until 2008 — 19.7%. Obama’s own fiscal 2013 budget released in February projects the average during the entire 4 years of the Obama Administration to come in at 24.4% in just a few months. That budget shows federal spending increasing from $2.983 trillion in 2008 to an all time record $3.796 trillion in 2012, an increase of 27.3%.

Moreover, before Obama there had never been a deficit anywhere near $1 trillion. The highest previously was $458 billion, or less than half a trillion, in 2008. The federal deficit for the last budget adopted by a Republican controlled Congress was $161 billion for fiscal year 2007. But the budget deficits for Obama’s four years were reported in Obama’s own 2013 budget as $1.413 trillion for 2009, $1.293 trillion for 2010, $1.3 trillion for 2011, and $1.327 trillion for 2012, four years in a row of deficits of $1.3 trillion or more, the highest in world history.

#19 Barack Obama almost seems more focused on his golf game than on the problems the global economy is having. He just finished up playing his 100th round of golf since he became president.

If you are looking for some kind of a global financial miracle you can stop watching.

If European leaders had a master plan to save Europe they would have shown it by now.

If Barack Obama had a master plan to fix things he would have implemented it by now.

If the Federal Reserve had a master plan to fix things we would have seen it by now.

The entire house of cards is starting to come down and things are going to get really messy.

A lot of people both in the United States and in Europe are going to lose their jobs and their homes over the next few years. It is likely that the next recession will be even more painful than the last one was.

Now is not the time to panic. If you acknowledge what is coming and prepare accordingly then you will likely be in good shape.

But if you stick your head in the sand and pretend that everything is going to be okay then the next few years will likely be incredibly painful for you.

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14 Responses to "19 Reasons to Start Preparing for a Global Economic Collapse"

  1. zan  June 20, 2012 at 12:34 pm

    a bit odd to put 12 points about the ‘bad economic health’ of southern europe while
    1. the USA has bigger debts than anybody in the world
    2. the UK has bigger debts than anybody in Europe
    3. the US banks that borrowed money to these southern Europe countries started these problems and walk free.

    4. if you would have a crisis in your relationship, you are always too late to admit. And once you do this it’s time to change plans/schedule for things NOT to blow.
    Nothing happened so far with changing the current system, so it has to blow.

    the people with money are already for 3/4 years preparing… it’s the people without that can’t get ahead

    • Beci  June 26, 2012 at 2:59 pm

      unbelievable…ill make an educated guess you reside in an european state so are on the defensive because an article points to the flaws in the European system. as many of us informed and getting prepared feared people will for some strange simplistic reasoning will attack innocent people in other countries. granted im sure traffic will be returned but this does not make it acceptable or helpful.

      during the frenzy of the growing nationalistic attitude and simmering conflict between nations the real culprits will sit back in their comfortable safe retreats to witness the turmoil they have inflicted without so much as a cry from the citizens suffering their greed.

      try taking your energy and directing it at those who deserve…or you could even start thinking of solutions.

  2. Manny  June 20, 2012 at 3:05 pm

    Can you please post some ideas on how to prepare for what is about to unfold? Thanks!

    • Beci  June 26, 2012 at 3:08 pm

      basic preperations are to get your finances in order, as much as possible. either concentrate on reducing high interest debt or consolidate everything into one tidy loan.

      then if you have savings transfer it into precious metals gold and silver, or if you have disposable income after bills purchase amounts from bullions each payday.

      ensure you have food and water supplies. with food collect canned options, nuts seeds, pastas and things that are long life. with water consider purification bottles and tablets.

      it depends on what the global collapse actually looks like but there are much more steps you can take.heres a video from the us which identifies the top 20 things for total economic collapse


      whether it is going to be this bad i cant say, im not qualified to be able to rationalize it but in my opinion, it would be daft not to make provisions…as the saying goes, prepare for the worst and hope for the best.

      hope this helped.

  3. Average Joe  June 20, 2012 at 3:54 pm

    Well, if the history of american capitalism has shown us anything, now is about the time the US government sells off aspects of itself to other private corporations due to the effects of the “federal” reserve’s campaign on our money’s value. We’re bankrupt, and it’s time to privatize the government. That’s been their plan for the last 100 years.

  4. An Exercise In Frugality  June 20, 2012 at 8:58 pm

    As far as preparedness-no joke look into stockpiling. I run a couponing website that teaches people how to shop for next to nothing and get more for much much less. Get a good stockpile of basic staples going in the event of an interruption or problem with food supply (something most of us have never experienced let alone imagined would happen in our lifetime, so it is imperative that we acknowledge the possibility and prepare!)
    I say have a minimum of six months worth of non-perishable and frozen food/toiletry/medication items for your whole family (don’t forget your pets!!)

  5. Tom  June 20, 2012 at 11:06 pm

    What if everyone had to default the debt? And Massive debt forgiveness is initiated? Would the build prisons for everyone? Would the USA try to invade Europe to get us to pay?

    I doubt anyone would suffer. Would they? It seems like all this accumulated debt is held in the hands of a few private banks. In theory if all the countries defaults no one would really suffer. As these private corporations have accumulated so much profit over the years it will only be felt as a pinch in retrospect.

    Think about it!

  6. gabriela  June 20, 2012 at 11:31 pm

    It goes beyond the usual analysis of world economics everyone…
    The time has come…The arrests of the cabal (banksters,corrupt officials and military) are now due…June 21st is the date that the Galactic Federation of Light has given for us (Earth allies, humans) to take action on this…and if not, they themselves will take over…We are all in it together, whether you’ve been a believer or not of extraterrestrial presence, and if we don’t remember who we are NOW we will not be living on this planet for too much longer…
    This is it everyone!…if we don’t change our ways, Gaia (Planet Earth) is going to shake us all off in the next few months for she is undergoing a major transition into a higher dimension (entering the Age of Aquarius as stated by the Mayans with their famous calendar) and she simply cannot do this if we ourselves don’t make the effort to vibrate in higher frequencies…Love is the ultimate and most powerful energy of them all and this is the energy that has to prevail within us. Every thought, word and action is affecting us all and Gaia is no exception…It is now time to WAKE UP!! And yes the lights in the skies are our galactic families…they are here to help us!! SO BE IT ♥

  7. cr0ft  June 21, 2012 at 7:14 am

    That part about President Obama is largely BS, though. The only President anytime lately that has been more “fiscally conservative” than Obama is… Clinton. Aside from the stimulus (which was pretty necessary under the current asinine capitalistic rules) Obama is among the least bad.


    So less of the “Obama debt binge”, if you please. I don’t like what the guy has done in many areas – he’s been hideous for civil liberties and all that murdering abroad with drones sucks, to pick a few – but the issues with the US economy and the runaway military spending were there before he got into office and are going to be there when he leaves.

    • john  June 21, 2012 at 7:39 pm

      +1 to Croft.

  8. Glen  June 30, 2012 at 5:49 am

    I would be reluctant to invest in precious metals, because if economies fell, who could buy them?
    They aren’t stored at home, so you have no immediate access to ‘your portion’.

    If you could sell it to someone, they could dictate the price because if your desperation to sell it in order to survive. I believe it is teh Emperor’s New Clothes, pushed by those hoping to get the maximum profit before it all falls apart.

    You can’t drink or eat it…

    Am I missing something here?

  9. Evan D  June 30, 2012 at 1:42 pm

    Can someone tell me how this isn’t peddling fear?

  10. Artful Sustainable  August 12, 2012 at 4:11 am

    good job ever one need more opinions! communication is the best way to handle a problem before it gets out of control,

  11. bambles  November 5, 2012 at 11:14 pm

    instead of buying a bunch of canned goods and items from big stores, plant a garden. reasons being: you’re not giving any money to the main head honchos way up the line that are contributing to our problems, and you’re not eating any GMOs, which are also problematic in our society. if you do buy shelf items, go to a local health market. it may be a little more expensive but at least you’re not compromising your health or handing money over to big corporations.


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