The Trap Snaps

An article on the Charles Schwab website this morning predicted that Europe was going into a depression. The only reason they are not already in a depression is that no one actually knows how to define a depression. One of the metrics is the unemployment. When one’s neighbor is out of work, that is a recession. When that same person is out of work, that is a depression. In many parts of Europe the unemployment is over 25%. The unemployment in some demographic groups is over 40%. A lot of people might perceive that as a depression.

In the “great depression”, there were rampant bank failures. The bailouts are the only thing preventing those failures now. The retirement systems in most European countries are absolutely ridiculous and should be reformed. Now is not the time. That money needs to go into the economy. Retired people spend money and don’t take up space in the workplace.

The German economy is tightly tied to the rest of Europe. Austerity is a way of life in Germany anyway. Imposing this austerity on the rest of Europe has cost Germany a big part of its market. Germany has the last successful economy in the Eurozone. When it crashes, the trap will snap.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/