Threat of Another Recession, Look to Europe

The potential for another recession is high, according to financial adviser John Mauldin. The primary reason is not too much overspending by the federal government, quantum easings, or too many bad loans to people who couldn’t possibly repay. No, it is Greece and lesser debt-ridden European nations with their insolvent banks this time.

Mauldin’s concern is based on two weeks spent in Europe speaking with investors, bankers, economists, and other people. Many Europeans see continued decline in the value of both the Euro and the dollar. The same believe more quantum levels of money printing are inevitable in order to save their economies from default. One of Europe’s more astute financiers even see the Euro ceasing to exist in the near future.

Even Bernanke warned the possible negative impact on America’s economy if Greece defaults and European banks fail.

In Greece, the economy is so bad that drug companies are refusing to send hospitals needed medicine because hospitals cannot pay their bills.

Pharmaceutical companies are starting to refuse to deliver to Greek hospitals, as they are up to two years behind on their payments. It turns out that Greece owes some €6 billion to private businesses like hospitals and simply cannot pay. Those costs are rising, and much of it is to hospitals for medical care supported by the government. They are issuing bonds (shades of California) for the debt in some cases, which sell for a discount of 50%, if they can be sold. And we thought finding €12 billion was a hard thing.

That is one reason Americans should not allow socialist Democrats to socialize health care.

To read John Mauldin article, titled “The Contagion Risk of Europe,” go to his website

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