Credit in the EU is contracting, with credit growth peaking at 11.5% in 2008, halving by 2010, falling to zero in 2011, rising back to 4% in 2012 and then falling below zero in 2013. This is the rate of growth so we can see that at zero new loans equal old loans and when it is negative new loans (credit) issued is smaller than loans that are closed either due to default or being paid off.
According to Steve Hochberg, the European Union is coming unglued. The Euro-zone Real GDP is falling and has spent the majority of the last five years with the exception of 2010 in negative growth territory. A recent Economist magazine article (August 10,2013) stated that “Euro-zone rescues have left sovereign debt too high to be sustainable.” And the U.S. isn’t any better, in the U.S. debt is being shifted from the private sector to the government with massive government debt growth. The other major sector of debt growth is “student loan debt” which is currently at the $1 Trillion level. With student loan write-offs at $3 billion in just the first few months of this year. Cities in California, Pennsylvania and Michigan are going bankrupt. See the video below for the full analysis. ~Tim McMahon, editor
(VIDEO) What Is the Debt Situation in Europe and the U.S.?
By Elliott Wave International
In this video clip from Steve Hochberg’s “Don’t Get Caught Holding the Bag” presentation, recorded at the San Francisco MoneyShow, Elliott Wave International’s Chief Market Analyst addresses a popular question we get at EWI. Enjoy this insight from Hochberg, then take a few minutes to learn how you can get Elliott Wave International’s newest free report: How to Protect Your Money When the U.S. Debt Bill Comes Due.