For about the kazillionth time, Ambrose Evans-Pritchard (AEP) is highlighting the imminent meltdown in the southern quadrant of the European Union. The southern quadrant includes Greece, Italy, Spain and Portugal. All of these Mediterranean countries are deep in debt, their economies are in a depression and no help is coming from the northern members … make that member: Germany. There’s a lot of heat, smoke and noise going on here. But thus far that’s all there’s been.

In his latest article, entitled “The Wheels are Coming Off the Whole of Southern Europe”, AEP quotes El Mundo as saying about Spain that “a ‘pre-revolutionary’ mood is taking hold.” This is because, on top their 26.9% unemployment, and debt to GDB ratio of 134%, a financial scandal is brewing, involving Mariano Rajoy taking “illegal payments” prior to becoming Premier. Rajoy would have been better off fathering an illegitimate child or being accused of beating his wife, instead of taking illicit money. But who knew things would get this bad? Yep.

Things in Portugal aren’t much better…the finance minister quit this week, because of lack of support for austerity measures (so maybe this is a blessing, depending on what his successor does). Greece will, once again, miss its austerity targets “by a wide margin” and its economy is expected to shrink by 5-7% this year. Italy had its bond rating reduced to junk status this week, and last I heard it was having trouble forming and keeping a coalition government going.

So the wheels are coming off. But they’ve been wobbling for the past three years or so. What’s new & different? First, HB, head of the Fed, with his ‘tapering’ comments, caused already strapped countries to endure a rather abrupt interest rate increase. Second, statements from ECU members have put them into a corner where they are bound to lose, whichever way they go. I shall elaborate.

Where it’s clear to everyone else in the civilized world, the ECB (European Central Bank), Chancellor Osborne of Great Britain and Angela Merkel still believe austerity can alleviate the problems in the EU. This strategy hasn’t worked, isn’t working and won’t work anytime, anywhere in the future. But you know the definition of insanity, and these folks previously named should be locked up in Bellevue relative to their position on this. But a few folks ‘get it’, and are working on trying to fix it. The folks that ‘get it’ are in the executive branch of the European Union. Referred to as the European Commission, they propose to give themselves extraordinary powers to help bail out failing banks in the EU. This would mean another massive bailout of the failing southern countries. Who is vehemently opposed to this proposal? Germany, naturally. So that won’t happen. Conversely, the leaders of the EU – including Merkel – have learned from their past mistakes in Greece and Cyprus, and have promised not to force any EMU state into default, with the associated losses for their member banks and pension funds. But folks, listen: it’s gonna be one way or the other. Right now, the choice is none of the above.

But as AEP points out, doing nothing is, in fact, de facto tightening of the flow of money. This will exacerbate the debtor countries’ problems, and can only end in grief for everybody. All the ECB and its head Mario Draghi have done so far is bluff their way into buying more time. Sooner or later, folk will figure out the emperor wears no clothes, and The Lone Ranger ain’t on his way to save them or back them up or do anything but maybe show up for the funeral. Oh me, oh my.

And what does that mean for the U S of A? Aren’t we, in fact, part of the global economy, and what will failure in Europe do to America’s ability to grow its economy and move forward toward a better life for all? Well, we may be either the last man standing, or the last body to fall on the heap. Time will tell..but in the meantime, it would really help a lot if Chopper Boy Ben would just keep his lip zipped.