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Euro Zone Austerity Leads To Recession

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Euro Zone Austerity Leads To Recession

As self-imposed Euro Zone austerity leads to recession the political face of Europe may be about to change. While authorities try to deal with the so called PIIGS debt crisis voters seem likely to express their dissatisfaction with things as they are. The Euro Zone debt crisis is three years old. The problems of the Euro Zone have affected economies across the globe. China, for example, is seeing a decrease in manufacturing as Euro Zone austerity leads to recession and fewer purchases of Chinese products. After the painfully slow Greek bailout, and European Central Bank cash infusion, things, briefly, looked hopeful. However, the Euro Zone bailout package consequences are coming home to roost as the Central Bank bailout money has been used and Euro Zone austerity leads to recession. Stock traders may well see a fair amount of volatility in Euro Zone stocks and stocks in markets throughout the world as political volatility drives market volatility in the Euro Zone.

The Recipe for European Debt

In the run up to European Central Bank loans to Greece this spring the various solvent members of the Euro Zone demanded that Greece cut back on government benefits, including pensions and health care. Although Greece eventually complied the prices were riots in the streets and an anemic economy that may spell disaster by the next time that Greek bonds come due. Along the way credit rating agencies downgraded debt in more than a dozen nations in Europe. The response was to institute austerity measures across the board. This is likely a good idea in the long run as it helps reduce the tendency of politicians to buy votes with programs paid for with someone else’s money. In the near term, however, this policy reduces money supply across the Euro Zone and thus this Euro Zone austerity leads to recession which is what is predicted for 2012.

Voter Discontent in the Euro Zone

The bigwigs in Paris, Brussels, Bonn, and Berlin have thrashed out a monetary solution to the current Euro Zone debt dilemma. The issue of who is paying for what has not been lost on voters across the more solvent members of the Euro Zone, especially Germany. Citizens of those nations with healthier economies are coming to resent the fact that they are backing the debt of the so called debtor nations of the EU, with their taxes. Leaders in Germany and France understand that the European Union is a Common Market as large as the USA. This market, or free trade zone, makes internal trade easier and more lucrative. Thus leaders have cautioned against letting debtor nations such as Greece, Portugal, Ireland, Spain, and, especially, Italy go their own way. The price of this decision may be that the European leaders who led the EU in its efforts may be out of a job courtesy of voters.


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  • 1. Euro Zone Austerity Leads to Recession
  • 2. To see a complete version of thispresentation and to obtain our free EBookfollow this link:http://portal.sliderocket.com/BLOUC/Euro-Zone-Austerity-Leads-To-RecessionRead the Forex Conspiracy Report forinsights into trading foreign currencies. Getyour copy athttp://portal.sliderocket.com/BLOUC/Euro-Zone-Austerity-Leads-To-Recession
  • 3. As self-imposed Euro Zone austerity leadsto recession the political face of Europemay be about to change. www.ProfitableTradingTips.com
  • 4. While authorities try to deal with the socalled PIIGS debt crisis voters seem likelyto express their dissatisfaction with thingsas they are. www.ProfitableTradingTips.com
  • 5. The Euro Zone debt crisis is three yearsold.The problems of the Euro Zone haveaffected economies across the globe. www.ProfitableTradingTips.com
  • 6. China, for example, is seeing a decrease inmanufacturing as Euro Zone austerity leadsto recession and fewer purchases ofChinese products. www.ProfitableTradingTips.com
  • 7. After the painfully slow Greek bailout, andEuropean Central Bank cash infusion,things, briefly, looked hopeful. www.ProfitableTradingTips.com
  • 8. However, the Euro Zone bailout packageconsequences are coming home to roost asthe Central Bank bailout money has beenused up and Euro Zone austerity leads torecession. www.ProfitableTradingTips.com
  • 9. Stock traders may well see a fair amountof volatility in Euro Zone stocks andstocks in markets throughout the world aspolitical volatility drives market volatility inthe Euro Zone. www.ProfitableTradingTips.com
  • 10. The Recipe for European Debt www.ProfitableTradingTips.com
  • 11. In the run up to European Central Bankloans to Greece this spring the varioussolvent members of the Euro Zonedemanded that Greece cut back ongovernment benefits, including pensionsand health care. www.ProfitableTradingTips.com
  • 12. Although Greece eventually complied theprices were riots in the streets and ananemic economy that may spell disaster bythe next time that Greek bonds come due. www.ProfitableTradingTips.com
  • 13. Along the way credit rating agenciesdowngraded debt in more than adozen nations in Europe. www.ProfitableTradingTips.com
  • 14. The response was to institute austeritymeasures across the board.This is likely a good idea in the long run asit helps reduce the tendency of politiciansto buy votes with programs paid for withsomeone else’s money. www.ProfitableTradingTips.com
  • 15. In the near term, however, this policy reducesmoney supply across the Euro Zone and thusthis Euro Zone austerity leads to recessionwhich is what is predicted for 2012. www.ProfitableTradingTips.com
  • 16. Voter Discontent in the Euro Zone www.ProfitableTradingTips.com
  • 17. The bigwigs in Paris, Brussels, Bonn, andBerlin have thrashed out a monetarysolution to the current Euro Zone debtdilemma. www.ProfitableTradingTips.com
  • 18. The issue of who is paying for what has notbeen lost on voters across the more solventmembers of the Euro Zone, especiallyGermany. www.ProfitableTradingTips.com
  • 19. Citizens of those nations with healthiereconomies are coming to resent the fact thatthey are backing the debt of the so calleddebtor nations of the EU, with their taxes. www.ProfitableTradingTips.com
  • 20. Leaders in Germany and Franceunderstand that the European Union is aCommon Market as large as the USA. www.ProfitableTradingTips.com
  • 21. This market, or free trade zone, makesinternal trade easier and more lucrative.Thus leaders have cautioned against lettingdebtor nations such as Greece, Portugal,Ireland, Spain, and, especially, Italy go theirown way. www.ProfitableTradingTips.com
  • 22. The price of this decision may be that theEuropean leaders who led the EU in itsefforts may be out of a job courtesy ofvoters.Traders should consider this in decidingon trading US stocks versus Euro Zonestocks. www.ProfitableTradingTips.com
  • 23. Trading Stocks as Euro ZoneAusterity Leads to Recession www.ProfitableTradingTips.com
  • 24. The fundamentals are that the Euro Zoneis heading into a recession due to strictausterity measures and accumulateddebt. www.ProfitableTradingTips.com
  • 25. However, the situation may well be veryfluid in the coming year if major players innegotiations are removed from the scenevia voter discontent. www.ProfitableTradingTips.com
  • 26. Technical analysis may be more importantthan fundamentals in assessing marketsentiment and stock price direction inEurope and elsewhere. www.ProfitableTradingTips.com
  • 27. And as Euro Zone austerity leads torecession reduced manufacturing inChina may be compounded by a collapseof the real estate market and the slow USrecovery may be imperiled by eventssurrounding the fall electoral campaign. www.ProfitableTradingTips.com
  • 28. For more insights and useful informationregardingstock, options, commodities, and futurestrading visit
  • 29. www.ProfitableTradingTips.com