Greece, Italy, Spain, Portugal and Ireland are all on the brink of collapse because of their national debt. Germany is tired of bailing these countries out and arguably cannot afford to do it anymore themselves. The collapse of the Euro would put the entire EU into a recession. Supposedly the “moment of truth” is fast approaching for Europe. George Soros, who may or may not be orchestrating all of this, says the EU has three months to figure things out.
Germany and France will make it out of an Euro collapse in relatively good shape. They’ll have a recession but those two countries will be the first out of the recession. They’ll be soon followed by the lowland countries then the eastern countries. But the big question is what ends up happening to the defaulting nations. Chaos is likely to rule and the question then becomes first will that chaos spill into neighboring countries and second who ends up in control after the chaos subsides.
We’re more interested in the short term though because what happens with the Euro could have a direct impact on our Presidential election. The worldwide economy is slowing. Asia is stalling, Europe is falling apart, the NASDAQ and S&P are already in an official period of correction, the Dow isn’t far behind. In fact the Dow has lost all of its 2012 gains in the past couple weeks. Much of the loss is based on fears that Europe is about to come apart, that the Euro will no longer be the currency of the continent. That fear is quickly leading to a worldwide recession.
If the Euro collapses, in the short run we’ll lose a major trading partner in Europe because they will lose access to credit. That will affect us in the extreme, forcing the US into a recession and likely China as well. If this happens, Obama is toast. The economy is already unstable and Obama’s re-election chances largely hinge on how the economy does over the next few months. A recession based on a Euro collapse wouldn’t last forever because as previously mentioned Germany and France will be able to rebound fairly quickly. But they won’t rebound before the November election.
With so much on the line for Obama and the world economy it’s interesting that Obama has almost nothing to say about the potential Euro collapse. It’s as though he’s become an isolationist on this issue alone. Maybe he doesn’t have enough time for the Euro because he’s to busy picking and choosing which terrorists to kill. It’s quite odd that Obama isn’t trying to get involved, isn’t proposing American led solutions or demanding some sort of resolution. Obama doesn’t have isolationist tendencies, what he does have though is a lack of leadership skills. He’s the President of the United States, if he demands action and offers to lead Europe will listen. Especially now, they’re entering a crisis situation.
Obama however sits on the sidelines doing nothing. So much is riding on Europe for Obama, it makes one wonder if he even realizes it. Obama doesn’t really have an understanding of the economy and seems to have only cursory interest in how it actually works. With Valerie Jarrett being the only advisor Obama actually listens to, and with Jarrett being a serial incompetent, it’s no wonder the big O doesn’t have anything to say on Europe. But he needs to say something, he needs to do something. His Presidency truly hangs in the balance but more important than that, so does our economy.
What exactly Obama can and should do is up for debate of course. But barely commenting on the pending collapse of a major world currency isn’t an option. In the very least, the United States needs to offer to help negotiate some sort of resolution, even if that resolution means the planned and coordinated elimination of the Euro. In that case the end of the Euro would be relatively orderly, a much better outcome than a chaotic collapse. But Obama is nowhere to be found, he hasn’t offered to do anything. If Obama loses because our nation fell into recession after the Euro collapses, historians will look back and wonder why Obama never got involved or waited until it was to late. As voting citizens, we have to ask ourselves now why the President isn’t doing anything and why he has no comment on the matter when it so very much affects our day to day life.
Steven Birn is an attorney and conservative political junkie and blogger. For more news and commentary visit Steven Birn Speaks. (GCN) Photo - AP
Source: Steven Birn