Harry Dent | Thursday, February 28, 2013 >>
There hasn’t been any “bad news” in Europe recently, so it’s no surprise the stock markets reacted so sharply at the beginning of the week on the outcome of the recent elections in Italy.
Understand one thing clearly: the political uncertainty caused by this election is only a symptom of something much – MUCH – bigger…
As a wealth civilization, Southern Europe is dying.
I often remind people, during my frequent speaking engagements, that it’s just human nature to project in straight lines… to desire to get better and be better… and then go to heaven to stay!
That is what the southern Europeans have done. They tried to go to heaven… early. Now they’ve found themselves in hell.
The thing is, this crisis in southern Europe is only partly due to their aging populations and the resultant slowing in spending.
Europe’s overall demographic trends in spending and productivity peaked in 2010, as you can see in this Spending Wave chart…
These trends will plateau into 2014. Then they’ll drop like a rock forever!
This drop-off is steeper in southern and central Europe than in northern Europe where trends go more sideways. If you think Europe is in a crisis now, wait until demographic trends kick in more fully over the coming decade and beyond.
But the crisis is in large part due to downright poor work ethic and waning competitiveness.
Germany is aging faster than Italy, Spain, Portugal or Greece, but you don’t see it in the throes of a deep recession and debt crisis… with uprisings in the streets. That’s because its citizens still have a strong work ethic. The country is still competitive in world markets.
The PIIGS, on the other hand, have high wages, few working hours, early and generous entitlements, massive bureaucracy for businesses to deal with… and you can just forget about firing a slack employee. That’s just damn near impossible!
And everyone wonders how these countries ended up where they find themselves today?
The CEO of U.S. tire maker Titan recently commented that “he would be stupid to take over a Goodyear tire plant in France as the French work for three hours, talk for three hours and take two hours of breaks a day.” When he confronted these “workers” directly, they replied…
“This is the French way.”
See… the French are already in heaven.
I actually love going to countries like Italy and Spain. There’s good food, simple living, rustic landscapes. The people are always so relaxed and easy-going. I love going to islands for the same reasons.
That doesn’t mean I would hire most of the people in Italy or in Jamaica. You have to throw rocks at a waiter to get a coffee refill… or wait for them to finish their lengthy conversation with a co-worker or customer, or their smoke break, before they deign to serve you.
They’ve retired on the job… and then they expect to retire full time in their 50s.
What worker wouldn’t want this heaven if its culture tolerates it?!
These countries will continue to have political turmoil for a long time, perhaps forever, because its people and politicians don’t live in the real world.
They’re simply uncompetitive and unwilling to make the sacrifices needed to “live on earth,” which dictates that your standard of living should go down if that’s your attitude. Sacrifices like working until you’re 65… or even 70. And not working in the “French” way. Actually working eight hour days… for pay that’s reasonable and fair. Contributing to growth. Having a sense of purpose. Accomplishing something meaningful.
People living in la-la land just don’t understand the reality of work and contribution, so now they have a major reality check and crisis coming.
The reality is, we see a declining civilization. It’s been wealthy a long time. Once it led the world (from about 500 BC into 450 AD). Now it’s descending into hell.
If I were in southern Europe, I would get the hell out of Dodge and move to northern Europe, North America or Australia. I certainly wouldn’t hold any investments in euros… or any euros at all for that matter.
I suggest you do the same.
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