Europe’s Greater Depression is worse than the 1930s…. Europe is turning Japanese….. Zombie banks… French Jobseekers Surge To Record High… Greek prostitution up 1,500 percent


 

Europe hasn’t recovered, because it hasn’t let itself. Too much fiscal austerity and too little monetary stimulus have, instead, put it more than halfway to a lost decade that’s already worse than the 1930s.

It’s a greater depression.

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But it’s a little misleading to just call this a depression. It’s worse than that. Europe is turning Japanese. The combination of zombie banks, a rapidly aging population and, most importantly, too-tight money have pushed it into a “lowflationary” trap that makes it hard to grow, and is even harder to escape from. That’s what happened to Japan in the 1990s, and now, 20 years later, its nominal GDP is actually smaller than it was then. Now, Europe isn’t that far gone, but it’s getting there. Inflation is already a meager 0.4 percent. And you can tell that investors don’t think it’s going to pick up anytime soon, because they’re willing to lend to governments for almost nothing. Indeed, for the first time in its history going back to the Napoleonic era, Germany (or one of its predecessor states) can borrow for 10 years for less than 1 percent. Japan, of course, has been able to borrow this cheaply for a decade now.


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