Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

France and Italy are the Next Causalities of the Credit Bubble

Stock-Markets / Credit Crisis 2015 Feb 27, 2015 - 05:39 PM GMT

By: EWI

Stock-Markets

Editor's note: This article is excerpted from The State of the Global Markets Report -- 2015 Edition, a publication of Elliott Wave International, the world's largest financial forecasting firm. Data is updated to December 2014. You can download the full, 53-page report here.


Workforce is still shrinking

These two charts depict two imminent casualties of the credit bubble -- France and Italy -- where sentiment has decoupled from reality.

In November 2014, yields on 10-year French and Italian bonds fell to fresh multiyear lows (the sentiment), while unemployment pushed to record highs (the reality). In December, France reported the largest monthly spike in unemployment since February 2014, with more French workers now jobless than ever before. Italy, too, just got hit with a double whammy. At 13.2%, Italian joblessness also hit a new record, while CPI inflation came in at just 0.2%.

Keep in mind that these are Europe's second- and third-largest economies.

The data, meanwhile, confirms one of our longest-standing forecasts: that deflation will triumph over central bank stimulus, because consumers will delay purchases once they start to see that prices are falling. In November, a Reuters special report, "Why Italy's Stay-Home Shoppers Terrify the Eurozone," sought to explain why efforts to resuscitate Italy's moribund economy have failed.

Sure enough, the chief executive of a Milan-based shopkeepers association reports, "People aren't stocking up because they know prices will be lower in a month's time."

Moreover, shoppers are simply demanding steeper discounts. Italy's largest supermarkets, for instance, sell up to 40% of their products below their recommended retail price, yet the price cuts still routinely fail to increase demand. Says Reuters, "Italians are hoarding what money they have and cutting back on basic purchases...." Indeed, consumer prices in Italy have fallen on a yearly basis for the first time in half a century. Meanwhile, the country has lost 15% of its manufacturing capacity and more than 80,000 shops and small businesses since the country first entered recession back in 2008. "Those that remain are slashing prices in a battle to survive," Reuters reports.

Editor's note: This article is excerpted from The State of the Global Markets Report--2015 Edition, a publication of Elliott Wave International, the world's largest financial forecasting firm. For a limited time, you can download the full report, for free, and use its year-in-preview insights to prepare, survive and prosper through the global investment landscape of 2015 and beyond. Download the full, 53-page report here.


About the Publisher, Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world's largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in