Around the world investors, consumers, and citizens are waiting on the "magic announcement" from either political leaders or Central Bank heads to solve the problem of weak economic growth, high unemployment, and the risk of capital flight.
Recent articles suggest that savings/money is leaving Spain at a rapid percentage of GDP. When money leaves the economic system, economic activity will contract and not expand. The money contraction is being replaced by Central Bank or government purchases of bonds to continue to support a failing economic system or a depression. As most citizens know, the United States is in a depression. Most economic statistics keep coming in weak or weaker. Investors, consumers, and citizens are starting to ask the most important question; Will economic activity or the economy ever get better?
While Europe is suffering, the U.S. announced the ISM factory activity index is now below 50. Most economists consider the economy is contracting when the index falls below 50. The European Central Bank heads will meet again September 6th trying to float the idea of unlimited bond purchases in the E.U. to prevent the wide credit spreads between higher rates of Spain and Italy compared to Germany. While the major issue remaining is the pending court ruling in Germany due at the middle of September to allow the ECB to purchase any bonds at all.
As most citizens now know by now, the magic announcement is just an illusion.
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