In this very good piece in Britain’s The Daily Mail a comparison between 1932 Europe and 2012 Europe is made. As during the Great Depression many Europeans are now quickly losing faith in their governmental institutions. The EU is a mess. British leadership is not leading. There are riots in the streets. Many people are afraid. Fear makes people do stupid things.
That is to say nothing of the situation in the United States which is not exactly rosy. Though we are not starring directly into the abyss at this moment like Europe is, this could change quickly.
Add that China is slowing at a breathtaking pace. Beijing housing prices are in freefall. In October housing prices dropped by 30%. In November 35%. The auxiliary economic engine of the world is more than sputtering, it may be failing.
Add these things up and the world does not appear to be in recovery at all. What we likely are seeing is the beginning of the hangover from the massive Keynesian “hair of the dog” infusion of the past 3 years.
Hold on. As if the past 3 years haven’t been exciting enough, things are likely get even more “exciting” in 2012.
Happy New Year!