Will Another “Great Depression” Start in Europe?
See these signs of “Europe’s sputtering economic engine”
by Bob Stokes
Updated: September 07, 2022
Many people are familiar with the Great Depression of the early 1930s, but most of them may not know that this economic calamity began in Europe before arriving in the U.S., as a past issue of our Global Market Perspective has noted.
In Germany, for instance, consider that real GDP fell 1% in 1929 after growing 8.2% in 1927 and 2.8% in 1928. Other economic indicators hit a peak as early as 1927.
Only time will tell if history repeats. Yet, here in 2022, we do know that troubling signs are developing in Europe's biggest economy.
First, look at this recession indicator from our August Global Market Perspective with the commentary below:
Companies in Germany are seeing "softer demand for their products amid a darker economic outlook." (Bloomberg, 7/4/22) Germany's GDP also stagnated in July. More importantly, the economy recorded a 0.5% drop in overseas sales while imports were up 2.7%, meaning that the country recorded its first trade deficit since 1991. While deficits themselves are not recessionary, the change in behavior is notable, and, in case you're wondering, 1991 was indeed a recession year.
Since this analysis published, an August 22 Reuters headline said:
German recession increasingly likely, Bundesbank says
Some of Germany's neighbors are likely already experiencing economic contractions -- like Estonia and Latvia. Other economies -- Austria, Belgium, Luxembourg and Portugal -- registered shrinking GDPs in Q2.
Getting back to Germany, here's more commentary and another chart from our August Global Market Perspective:
The bottom graph on this chart shows the market capitalization of German companies as a percentage of worldwide market cap. Notice that it has been declining since its high point in 2008... The percentage has dipped relentlessly lower, falling to an all-time low of 1.92% just two weeks ago. Today, among Germany's largest four companies, only one ranks among the world's 100 largest.
Our just-published September Global Market Perspective provides more insights into global economies, including the U.S., Asian-Pacific and other parts of Europe.
Follow the link below to get the details so you can prepare for what may be just around the corner.
“A Textbook Ending for the Ages”
That's the title of one of the dozens of charts in our just-published September Global Market Perspective.
Discover which stock index (and country) right now -- plus get analysis of cryptocurrencies, crude oil, forex, gold, silver, global bonds and key stock indexes from around the globe in the 50-plus pages of the new Global Market Perspective.
Once reserved for only Elliott Wave International's institutional clients, the Global Market Perspective is now available to anyone who wants to tap into our timely insights into 50-plus global financial markets.
Just follow the link below to get started now.
A “Freight Train of Grains” Didn’t Cause Soybeans’ Recent Price Crash. So… What Did?
"Crash," "sink," "runaway freight train," and ever-lowering "limbo pole" are a few of the phrases used to describe the May selloff in grains, particularly soybeans. But before you blame the "bombshell" May 12 USDA supply/demand report for the slide, you'll want to read this first.
Commercial Real Estate: Prepare for a Potential Global Calamity
A lot of the commercial real estate market is faced with a decline in liquidity and falling values. The specter of defaults looms large. In at least one region of the world, there are reminders of the dark days of Q1 2009, as revealed by this chart.
'How people FEEL is how they ACT'
Like all ideas that make you want to slap yourself on the forehead and scream "How didn't I think of that!", the idea behind socionomics is simple: Social mood impels social action. When you know social mood's trend, you can forecast everything from the stock market to culture to politics and more. So, how then do you define the social mood trend? Watch our Head of Global Research touch on that in this video.