Will 2012 be the year that we see an economic collapse in Europe? Before you dismiss the title of this article as "alarmist", read the facts listed in the rest of this article first. Over the past several months, there has been an astonishing loss of confidence in the European financial system. Right now, virtually nobody wants to loan money to financially troubled nations in the EU and virtually nobody wants to lend money to major European banks. Remember, one of the primary reasons for the financial crisis of 2008 was a major credit crunch that happened here in the United States. This burgeoning credit crunch in Europe is just one element of a "perfect storm" that is rapidly coming together as we get ready to go into 2012. The signs of trouble are everywhere. All over Europe, governments are implementing austerity measures and dramatically cutting back on spending. European banks are substantially cutting back on lending as they seek to meet new capital requirements that are being imposed upon them. Meanwhile, bond yields are going through the roof all over Europe as investors lose confidence and demand much higher returns for investing in European debt. It has become clear that without a miracle happening, quite a few European nations and a significant number of European banks are not going to be able to get the funding that they need from the market in 2012. The only thing that is going to avert a complete and total financial meltdown in Europe is dramatic action, but right now European leaders are so busy squabbling with each other that a bold plan seems out of the question.
Many European leaders are promoting much deeper integration and a "European superstate" as the answer to these problems, but it would take years to implement changes that drastic, and Europe does not have that kind of time.
If Europe experiences a massive economic collapse and a prolonged depression, it may seem like "the end of the world" to some people, but things will eventually stabilize.
A lot of people out there seem to think that the global economy is going to go from its present state to "Mad Max" in a matter of weeks. Well, that is just not going to happen. The coming troubles in Europe will just be another "wave" in the ongoing economic collapse of the western world. There will be other "waves" after that.
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