20 Global Implications Of French Presidential Election
Forget the anemic latest US jobs report - the world is in play, and the election of Francois Hollande as the President of France may do more to determine US unemployment rates (and global investment results) in the next year than anything that Ben Bernanke and US government policies will accomplish.
In this analysis, we will examine twenty potentially world-changing economic and financial implications of this change in direction in France and Europe. These include the exacerbated near-term meltdown risk, the worsening of the long term outlook, the potential global political shift, the rapid redistribution of European wealth, and the impact on US unemployment, financial sector solvency and stock market returns, as well as US deficits and Federal Reserve monetization.
Potential Euro Collapse & Rapid Redistribution Of Personal Wealth
...the potential rapid annihilation of what used to be a global reserve currency could lead to one of the fastest and sharpest redistributions of wealth in financial history. If catastrophe takes down Europe's economy and banking system, then we may see repeated tidal waves of business collapse and spiking unemployment spreading out from the EU, and slamming into the already weak but tightly interlinked economies of the US, Japan, Canada, Australia and others.
At the same time there will be enormous windfall profits for some governments and for many millions of individual citizens. For many, whether they gain - or are destroyed - will be more or less happenstance. However, if we see the waves coming and are prepared, there are personal steps we can take to change whether we are likely to be one of the victims or one of the beneficiaries.
Gas For $1.75 A Gallon & Depression Level Unemployment: The USA After A Euro Collapse
The US dollar could soar in value. Gasoline could return to under $2 a gallon, possibly even $1.75, and filling up a near empty tank could once again be done for under $30. The prices of clothes, shoes and a shopping trip to Wal-Mart could drop significantly, providing much needed relief to retirees on fixed-incomes. In the midst of global economic crisis, there could be an "Indian Summer" in the United States with a return to cheap oil and abundant imports at prices well below current levels. Standards of living could briefly rise - for those fortunate people who still have jobs and/or stable incomes.
As pleasant as it could be for some, this potential "Indian Summer" won't change the bigger picture. If the Euro collapses (and that's a big if), the end destination will likely be disastrous for the US economy, US employment and the value of the US dollar. For a US economy that is already reeling - the fall of the Euro and a corresponding implosion of European economies could take a bad situation and make it much, much worse. The brunt of this damage will be borne by the many millions of newly unemployed as well as retirees and investors, but many more will bear the pain.
However, the journey from a full Euro meltdown to the end results for the United States may take longer than many expect, and the particulars of the path could also take many by surprise. In this article, we will speculatively explore some of the potential twists and turns between Euro collapse and US economic disaster, and the economic logic that may drive them.
