(Saul Loeb/AFP/Getty Images)
The Spanish economic miracle looks like it is over. Spain is headed for recession for the first time since the creation of the euro, according to investment bank PNB Paribas. For 15 years, Spain has never had a single quarter of negative growth. But if the Spanish party is ending, what does that mean for the rest of Europe?
Spain’s Economy Minister Pedro Solbes stunned capital markets with an admission that his country faced “the most complex crisis” in its history. The admission, according to the Telegraph, was a break with previous efforts to put a reassuring face on a rapidly deteriorating economy.
Solbes said the Madrid stock exchange had suffered an “earthquake,” crashing 27 percent since June, and that high oil prices, a slowdown in exports, and the global credit crisis had crimped consumer spending and the Spanish economy.
Solbes’s comments followed last week’s collapse of property developer Martinsa-Fadesa. With an empire of housing estates, hotels, shopping malls and other properties, Fadesa is the largest Spanish corporate failure in modern times.
The root of the current problem ailing Fadesa and Spain is the same thing ailing the United States—too much easy money creating bubbles that later burst.
In America, the roots of the housing bubble go back to the dot.com bust. At that time, then Federal Reserve chief Alan Greenspan massively cut interest rates to stave off recession—the side effect being that all of a sudden mortgages became inexpensive and millions more people could afford to purchase homes. Then, as real-estate prices were consequently driven sky high, the government encouraged the state-sponsored housing lenders Fannie Mae and Freddie Mac to make loans accessible to people who couldn’t qualify for loans big enough to purchase homes—which only increased the home buyer pool and drove prices even higher. But when the dot.com danger was over and the Fed began raising interest rates to combat inflation, loans and adjustable-rate mortgages became more expensive, housing prices began to fall, and the bubble burst.
The cause of the Spanish housing bubble is essentially the same. After joining the eurozone, the Spanish financial system became effectively backed by the much larger and more powerful German economy. Consequently, all of a sudden Spanish borrowers were able to borrow money at rates previously unheard of for a smaller economy. And like in America, Spaniards went on a spending spree, and all the newly available money ended up creating unprecedented demand for houses, automobiles and other consumer goods—thus the bubble economy was born.
In 2006, around 750,000 new homes were built in Spain—more than in Germany, France and the United Kingdom combined. And along with the houses, newly created lending, construction, remodeling and real-estate industries were also created, as easy money flowed from one sector to the next. Jobs became more plentiful, and as tax receipts grew, the government collected its share, posting moderate budget surpluses.
But now all that debt-fueled growth seems to be ending. With the European Central Bank raising interest rates to clamp down on inflation, the wheels have fallen off the Spanish economy. During the first quarter of 2007, new home sales plummeted by 32 percent. By the second quarter of this year, home prices had fallen by 20 percent. All the foreigners who had hopped on the hot-property bandwagon were now beginning to exit. Rising energy costs are also taking their toll, as are exports to the U.S., which have slowed due to the twin weaknesses of the U.S. dollar and economy. Corporations are tightening their belts, jobs are being shed, and the Spanish government now expects a multi-billion euro budget deficit.
Recession may be on the horizon, but Spain is not alone; much of the periphery of Europe is in the same boat. Like Spain, other smaller countries, such as Ireland, Estonia, Latvia and Lithuania, also benefited enormously from previously unexperienced low eurozone interest rates, and are now facing economic contraction.
A crisis could be brewing in outer Europe. If so, expect the periphery to look to Europe’s economic heart and core, its largest and most dynamic economy—meaning Germany—for the way out. •
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(Getty Images)
“Time is short for making a course correction before this grand experiment in liberty goes into deep hibernation,” the U.S. Congress was told earlier this month. On July 9, Texas Rep. Ron Paul warned the House Financial Services Committee that “big events” were about to occur.
“… I have days, growing more frequent all the time, when I’m convinced the time is now upon us that some big events are about to occur,” he said. “These fast-approaching events … will affect all of us. They will not be limited to just some areas of our country. The world economy and political system will share in the chaos about to be unleashed” (emphasis ours throughout). Paul continued:
There are reasons to believe this coming crisis is different and bigger than the world has ever experienced. …
The financial crisis, still in its early stages, is apparent to everyone: gasoline prices over $4 a gallon; skyrocketing education and medical care costs; the collapse of the housing bubble; the bursting of the nasdaq bubble; stock markets plunging; unemployment rising; massive underemployment; excessive government debt; and unmanageable personal debt. Little doubt exists as to whether we’ll get stagflation. The question that will soon be asked is: When will the stagflation become an inflationary depression?
Until recently, Mr. Paul endured a near constant barrage of criticism for his pessimistic views on the American economy. But nowadays he’s not alone in his fear of impending economic disaster. The New York Times agreed this past weekend that “big events” are indeed on the horizon:
Meanwhile, as American debts swell and foreigners hold more of it, nervousness grows that, some day, this arrangement will end badly. The dollar has been declining in value against other currencies. Some foreigners have begun to hedge their bets by buying more euros. “Obviously, this is going to come to an end,” [president of Euro Pacific Capital Inc. Peter] Schiff said. “Foreigners are not charitable organizations, and they’re going to demand that we pay them back.”
No single country owning large amounts of dollar-based investments is inclined to dump them abruptly; nobody aims to start a panic. But fears have begun to grow that one day a country may get spooked that another is about to dump its dollars—and that could trigger preemptive panic selling.
The Trumpet has been warning about a massive financial crisis in the American economy for years. Now, it seems each week brings more bad news—the recent news about Fannie Mae and Freddie Mac’s troubles, for example. The U.S. government, as Paul noted, has printed money with abandon, creating a bubble economy that is about to burst. With the dollar being a fiat currency, inflation will run rampant—the massive government and consumer debt that needs to be repaid practically guarantees it.
Read “America’s Bubble Economy” for more on the true underlying reasons for the impending economic storm. •
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Obama's 'Birth Certificate'
By Lame Cherry
7-25-8- No, Barack Obama BC does not make him prehistoric no more than BCE or AD after his name, but Barack Obama BC is about the creative Barack Obama Birth Certificate which is a fraud that his campaign has issued.
- Apparently, Barack Hussein Obama needs all of our help. You see, Israeli experts have concluded that the Obama birth certificate on DailyKos and posted on other liberal sites to be a forgery and a very bad one at that.
- It seems the same people who were creating the Forgegate documents for Dan Rather were given the job to make amends, but just need a little more practice.
- Therefore, to help Barry Obama until another forgery comes along for all DailyKos bloggers to conclude it is real, a stand-in birth certificate from Canada is placed below for the man without a country.
- Canada you might say? Why on earth Canada, eh?
- Canada, because it seems that Stanley Ann Dunham, Barack's Mom, had to be somewhere when Barry was born. That somewhere is logically Canada due to the trail of evidence.
- We know Barry was registered once, if not twice, to 2 different Hawaiian hospitals.
- Conjecture speculates that the grandparents on finding out Ann had the baby in Canada and registered baby Barack as a commonwealth baby of colonial Kenya, that the grandparents blew a cork and hauled the kid down and made him a "live birth" registration and a quite criminal act of making Barry an American and didn't tell the pouting Ann.
- Ann not knowing what was going on and seeing reason of making her son an American even if she loathed white Christian American United States, hauled Barry down to the other hospital by chance and registered Barry, too.
- All of this would have worked out fine if Barry had not wanted to be president and Democrats were ready to hitch to anyone other than Hillary.
- But I digress.
- To answer the question of 'why Canada, eh?'
- We know from a friend on Mercer Island that Ann Dunham was there with infant Barry. As women were in 1961 in a delicate condition, where their air travel was deemed harmful just like getting up on a stool, and hauling babies around was just not done and mothers and infants stayed usually a week in the hospital, it means that her friend was seeing Ann and Barry on their way home to Hawaii.
- That means they were someplace else.
- The United States of course is negated as if a baby born in Spokane was American, there would be no reason to register the baby twice in Hawaii.
- Kenya being in Africa, required all sorts of vaccinations for travelers there. A pregnant woman would not be vaccinated, so this rules out pregnant Ann Dunham.
- This by elimination means Canada for Ann to make baby Barry jr. just like Barry sr. a full-fledged British subject of the Queen and future Prime Minister.
- As Kenya was still a colony in 1961 and did not open a consular office in Ottawa until 1978, that rules out any registration with Kenya or Ann having a reason to travel by train east into Ottawa as all she desired was in Vancouver, British Columbia.
- The British Embassy which would handle all commonwealth information and probably birth registrations passing the information along to Kenya and perhaps a telegram of congratulations to Barack sr. on having junior has a consular in Vancouver.
- 1111 Melville Street, Suite 800
- Vancouver, British Columbia V6E 3V6
- Tel: 604 683 4421
- Fax: 604 681 0693
- Email: vancouver@britainincanada.org
- Obviously, those records would be extremely interesting as to the date if it did not match the Hawaii birth certificate in being sent before his birthday that he was born. Location of course would be most interesting too if the telegram was from Vancouver or Ottawa embassy announcing the joyful news.
- Nice part about this too is phone records should still be available even in Kenya in the date and location calls came in if a reporter cared to check.
- Where there are definite records are in hospitals. Vancouver would attract an out of town 18 year old girl to two.
- The first would be the new 1959 constructed Vancouver General Hospital and the Children's Hospital established in 1947.
- And as white girls having black babies in vanilla Canada would be quite noticeable along with a girl telling nurses and perhaps embassy officials, "The daddy is Kenyan and I'm American, but I demand my baby be a British baby", sort of would stick in the minds of prudish Canadian nurses who probably only saw black people on boxes of Cream of Wheat.
- I actually requested a reporter babe to check into this concerning the hospitals in Hawaii weeks ago as I asked her, "Just why is everyone taking a Democratic state's word, a Democratic employee's word for a Democratic candidate?"
- As noted before, Barack Obama's sister, Maya, has 2 online registered birth months of August and September. This would point to Ann Dunham having had Maya out of the country, too and in a few weeks hauled her back to Hawaii for a late registration too to be an American.
- So this is all the Barack Obama BC birth certificate mess everyone needs to help him out with as he is more qualified with the above birth certificate to be Canadian Prime Minster than the one DailyKos has issued in June 2007 in being an American President.
- At least with the above, there is probably a real one in Vancouver to back it up.
- Barack Obama, BC, (British Columbia) BCE, (Before Conning Everyone) and AD (Angelic Diety)
- He seems to be a man of all history, past, present and future depending on the script.
- Post Script: One might note that Dudley Dooright signed Barack's birth certificate, so we know this one is real too as it is posted online.
