Posted: Thu Nov 15, 2012 10:23 am Post subject: Euro zone falls into second recession since 2009
It's happening ...
Euro zone falls into second recession since 2009
(Reuters) - The euro zone debt crisis dragged the bloc into its second recession since 2009 in the third quarter despite modest growth in Germany and France, data showed on Thursday.
The French and German economies both managed 0.2 percent growth in the July-to-September period but their resilience could not save the 17-nation bloc from contraction as the likes of The Netherlands, Spain, Italy and Austria shrank.
Economic output in the euro zone fell 0.1 percent in the quarter, following a 0.2 percent drop in the second quarter.
Those two quarters of contraction put the euro zone's 9.4 trillion euro ($12 trillion) economy back into recession, although Italy and Spain have been contracting for a year already and Greece is suffering an outright depression.
A rebound in Europe is still far off. The debt crisis that began in Greece in late 2009 is still reverberating around the globe and holding back a lasting recovery.
An observation ... the reporters will do anything to avoid using the word 'depression'.
These are the facts. Picture a sine curve ... a big 'S' shape, on its side, on the going down phase. The economic decline actually starts after the flat part of the curve. at the top ... But the aggregated stats will average this out and (often) report a small positive number.
In the next quarter, they will announce that the economy is flat-lining, perhaps ... but they will use another metaphor ... treading water, perhaps ... but it is actually going down quite steeply.
In the third quarter, the stats will show a distinct decline. Often, a debate will start. The word 'recession' comes up. Is this a recession or not, they will ask the Finance Minister, knowing he cannot answer. In reality, the economy can be going down even more steeply. It is, in fact, in a depression, defined as two quarters of negative economic growth.
The stats they are acting on are already a quarter, or more, behind the reality. When a depression starts, it often starts with a bang ... you may have noticed ... But it isn't really acknowledged as happening until it is already recovering ... at least that's been the pattern. This time it's different. The central banks of the world have spent $trillions trying to a few $100 billion onto their GDP, basically so they can deny the society is in a depression. Because it didn't work.
Europe goes first, then the USA ... and who really knows about China and/or Japan? What can poor little Canada do?
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