Friday, August 14, 2015

Eurozone Stagnation Worsens

It is not clear that the Eurozone is even growing.  The latest GDP number reported yesterday was up 0.3 percent -- that's a pulse, but barely and may be revised downward later.  In Europe 0.3 percent translates to 1.2 percent annually.  Given how the date is collected, it is questionable that the Eurozone had any growth at all.

Once again the reported number was barely half the forecast.  The rosy predictions of European (and US Growth) never seem to materialize and forecasts continue to be revised downward.  Stagnation is the story in the Eurozone and nothing is going to change that except a return to free markets.  Bureaucratic control of the economy produces no growth and unending stagnation. 

The US is following the same pattern as the Eurozone for the same reasons.  Once you have decided that free markets are evil, or that bureaucrats know better, then hopes for the middle class and for GDP growth go out the window.

1 comment:

0f9ec222-434d-11e5-90d2-a3dbdfec9f0a said...

Mr. Burton,
What are your thoughts on the record low velocity of money (M2)? I've been following this trend on https://research.stlouisfed.org/fred2/series/M2V/ and even though GDP may be positive, the record low velocity points to a huge problem.

Sincerely,
John Cattano