However, of more importance to us is the language in the IMF forecast that for the first time calls on European nations to curtail its emphasis on austerity programs in favor of policies that stimulate economic growth. It appears that the IMF is the latest in a number of private and official economic organs to recognize the fallacy of stringent austerity programs as the solution to the Europe’s sovereign debt crisis. Indeed, the relapse of an increasing number of European economies into recession and the failure of an increasing number of European countries to meet debt/GNP targets for 2012-13 are showing the destructive impact of the EU austerity programs on the economic, financial, social and political fabrics of Europe and its concomitant impact on the rest of the world.

We hate to say we told you so, but we forecasted this in our SPG Trend website articles of December 17, 2010 and March 15, 2011. Those articles, plus others on our SPG Trend blog, warned of the dire consequences of “squeezing” economic growth to zero as a result of the draconian austerity programs dictated by the EU onits members. Almost two years later, some of the very institutions demanding these austerity programs are recognizing their failure. Unfortunately, it is too late to save the EU from recession this year and in many cases within the EU, next and the wheels of political change we also warned about in our articles is already underway. Elections in France, Greece, Italy, the Netherlands and Spain could result in new governments that have vowed to repudiate or ignore the EU austerity measures. Such developments would unravel the EU and create panic in international financial markets. We have always felt the “Achilles heel” of the EU was the unwillingness of the populations within its members to endure increasing economic hardship to appease international creditors.
The upcoming elections with the EU this year and next will determine the Union’s fate and future. An increasing euro-skeptic mood among the Union’s body politic is ominous and should be a source of concern for all of us.

Morris R. Segall

You may listen to the broadcasts and ask questions by signing onto www.ashfordradio.com, select Studio A and look for the interview with Morris Segall. The interviews will also be accessible by telephone at 760-542-4100. These broadcasts will enable us to deliver to our clients and subscribers our current analyses and thoughts on contemporary events, national and international economies, U.S. politics, geopolitics and international capital markets in a recurring and timely manner. We hope you can participate and would appreciate your comments.

Mr. Segall recently was recently interviewed by WBAL on the effect of tax cuts on federal workers. We have posted a link on our website for your convenience.

You may also access his most recent Ashford Radio Interview here which includes an update on the national economy.

As in the January 18th interview, you may listen to the broadcasts and ask questions by signing onto www.ashfordradio.com, select Studio A and look for the interview with Morris Segall. The interviews will also be accessible by telephone at 760-542-4100. These broadcasts will enable us to deliver to our clients and subscribers our current analyses and thoughts on contemporary events, national and international economies, U.S. politics, geopolitics and international capital markets in a recurring and timely manner. We hope you can participate and would appreciate your comments.

If you happened to miss last week’s interview, you may now listen online!

Be sure to check out his interview with Ashford Radio.