From Harry Dent at davidstockmanscontracorner.com:
I’ve been shocked over how much QE and stimulus the central banks have signed on for in the last seven years, but they’re finally starting to reach their limit.
The U.S. already did in 2014 when the Fed finally tapered. And this week, the markets are betting on a rate hike – never mind the trouble brewing in China, other emerging markets, and now Europe.
Good luck with that.
There’s just too much going on in the world suggesting deflation is the real fear, yet the Fed’s betting on 2% inflation to justify a hike. Give me a break!
There’s a reason the Fed has put off raising rates time and time again, and it hasn’t gone anywhere.
The fall in commodities prices is nowhere near its conclusion. That will only continue to ravage emerging nations as those prices continue to fall for several years.
And now Europe has its own troubles that are only getting worse… and could potentially signal the end of the euro and the economic bloc itself.
Recently I explained why the attacks on Paris were such a major issue. It was like the 9/11 wake-up call over here. Sure, our attack was larger. But Europe’s came after the recent terrorist attack on Charlie Hebdo, and while a massive refugee crisis was already calling everything into question.
This recent escalation in terrorist events, including the Russian Metrojet being bombed, only creates an atmosphere within the euro zone of individual nations re-asserting their own sovereignty over one another. And that includes controlling their own borders and trade flows.
That’s been the major flaw of the euro and the euro zone from the beginning.
These very diverse nations with long histories of shifting alliances and wars don’t really trust each other – they never did. And they’d never fully submit to a fiscal and political union. Greater trade and migration flows were just fine – until something went wrong. Something like the Paris attacks… Russian aggression in the Ukraine…
Or 800,000-plus refugees from Syria and the Middle East, with three million or more still expected to come.
It’s a giant mess! And the refugee crisis specifically is a huge expense to the many European nations accepting them, all while they’re teetering on the verge of recession again.
To continue reading: The Euro Crisis is Only Just Beginning
See also: Europe Is Toast, SLL, 12/2/15