From personal experience in the last year or so though, I can tell that things have been better in America in the past, versus how they are now. It’s easy to see that the money I once had bought a lot more groceries than it does now. Inflation is scary. I’ve had to make the cuts where I can, and it’s made things difficult in terms of sacrifice and being forced into prioritizing.
My little girl and I get by though, and we trust God, 100%. God has been here for us in countless ways this holiday season; nevertheless, it’s a little nerve-wracking, even when one has faith.
I hope the rest of you out here in blog-land, all across the world, are faring well and that there are people to help you when you need it. I’m praying for our world and our country, and hope you are too.
Billionaire investor George Soros says that the global financial system is on the brink of collapse.
Developed countries are falling into a “deflationary debt trap,” in which consumer spending falls, products become more expensive, tax revenues drop, and sovereign debt grows, Soros said last week, according to the Wall Street Journal. As a result, he said, the global financial system is in a “self-reinforcing process of disintegration.”
“The consequences could be quite disastrous,” Soros, who was born in Hungary, said at the tenth anniversary of the International Senior Lawyers Project.
Concern is mounting that the eurozone may break up because of market pressure on European sovereign debt, which could plunge Europe into a depression and the world into a recession. Observers are already worried that Europe could suffer a recession and subsequent slow growth for several years even if it averts a eurozone breakup, since products would remain expensive on the euro, making consumers more hesitant to buy them and forcing governments to curtail budgets even more as consumer spending falls.
The markets have forced pressure on the eurozone because of these fears. Borrowing costs for Italy and Spain recently hit record highs, which economists say are unsustainable over the long term. Either of these countries would be forced to default on their debt if not enough investors are willing to buy their new sovereign debt at bond auctions.
If Italy or Spain defaults on their sovereign debt and leaves the eurozone, it would probably break up. Depositors likely would pull their investments from banks, large European banks would fail, borrowing costs for other countries would become unsustainable, and other countries would leave the euro. Such an outcome would depress lending and consumer spending and plunge Europe into a deep recession.
European leaders will meet for a summit on Thursday and Friday to try to reach an agreement to stave off a breakup of the eurozone — a deal they haven’t been able to come to for two years.
European stock markets have fallen in response to the crisis in Europe. The FTSE Eurofirst 300 is down 9.97 percent for the year, the DAX in Germany is down 11.78 percent for the year, and the CAC 40 in France is down 14.70 percent for the year, according to Thomson Reuters.
Many economists say that the eurozone can avert a breakup only if the European Central Bank steps up to become a lender of last resort for troubled European countries. But the ECB has been purchasing European sovereign debt only in limited amounts, and the central bank in Germany — Europe’s largest economy — has expressed concerns that printing money to buy large amounts of European sovereign debt would violate the ECB’s mandate to temper inflation.
The United States itself continues to grapple with federal debt that topped $15 trillion for the first time last month, according to ABC.
Posted by: the warrioress | December 5, 2011
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