It's happening -- all over the U.S. and Europe!

Just this past Friday, Washington's jobless report was a shocker, driving Wall Street into a sudden tailspin. And just yesterday ...
* The government of French president Nicolas Sarkozy -- a central pivot of the entire euro zone -- was washed away in a rising torrent of voter revolt ...
* The government of Greece, scrambling to avoid default and climb out of deep depression, was slapped back down again by rebellious voters, while ...
* All over the euro zone, a whole new wave of mass street protests has begun.

So ...If Your Way of Keeping Tabs on the Global Economy
Is Simply by Checking the Dow, Beware!
The Dow doesn't reflect the true picture in the U.S. -- let alone in Europe.
This year's rise in global stock markets is mostly the natural side effect of the massive, unprecedented money-printing by the world's four most-powerful central banks.
And that money-printing is merely a reckless reaction to the worst combination of economic disasters and political threats since the Great Depression.
But There's Just One Nagging Problem:
The Money-Printing Isn't Working!
Finding that hard to believe? Then consider the evidence:
FIRST, the U.S. job market is virtually locked into Depression-era levels:

According to the widely respected Shadow Government Statistics, the actual number of unemployed in the United States today is 22.3%.
That's nearly TRIPLE the official number cited most frequently by the government or the media.
But it is far more accurate than the government's, reflecting ALL those who have given up looking for work or have no choice but to accept low-paying part-time jobs.
And now, after some recent flickers of "strength," even the official stats are turning sour:
o In April, employers added a meager 115,000 non-farm jobs -- worse than the already-disappointing March report.
o The percentage of workers participating in the labor force plunged to its worst level since 1981.
o Long-term unemployment is abominable. Among the jobless, a whopping 29.5% are now out of work for more than a year. That's 3.9 MILLION Americans in near-permanent limbo -- more than the total population of Chicago and San Francisco combined!
SECOND, it's not just jobs. The ENTIRE U.S. recovery is rapidly fading. In the first quarter, it expanded by just 2.2% -- a big drop-off from the fourth quarter of last year.
And this economic anemia is not just a temporary relapse; it's a chronic disease that's increasingly resistant to the biggest guns the economic witch doctors can throw at it.
THIRD, the U.S. is not alone.

As I told you at the outset, in Europe, every attempt to either stimulate the economy -- or slash massive budget deficits -- has failed, unleashing the most-virulent political backlash since World War II:
Remember: In yesterday's French elections, President Nicolas Sarkozy was just booted out of office, threatening to throw the entire European "fiscal pact" into disarray.
And never forget: That's the agreement that was supposed to help Europe overcome its sovereign-debt crisis and persuade global investors not to panic.
But Sarkozy is just the most-recent among a long line of political cadavers that litter the landscape of the European debt crisis ...

In Spain, the prior government first tried same-old stimulus ... and then switched to austerity. But neither worked. Unemployment soared. And in last November's elections, it got crushed.
What about Spain's new government? Not much difference! It has been unable to avoid a double-dip recession. And it has been powerless to stop an exodus of foreign investors from Spanish government bonds.

In Italy, repeated accusations of serial corruption and extravaganzas with minors could not dislodge Silvio Berlusconi from office. But when the debt contagion struck Italy late last year, he was out the door within weeks.
And just yesterday, his successor got slammed in local elections -- a mass revolt against austerity and the surging unemployment it has caused.

In the UK, Gordon Brown got fired because of the bust, and David Cameron could face a similar fate.
Reason: The UK just sunk into its first double-dip recession since Margaret Thatcher. Banks have gotten slammed. Construction is in a tailspin. And the entire country is now on the verge of another big day of reckoning.

In Greece, George Papandreou was swept to power in October 2009, pledging to spend his way out of the crisis. Two years later, in the midst of riots and the worst financial crisis since World War II, Papandreou's own deputies threw him out. And in yesterday's elections, his successor's party got severely punished as well.

The list of fallen leaders goes on and on: Portugal's Jose Socrates voted out of power in June 2011 ... Denmark's center-right government displaced in September ... and Finland's establishment parties struggling for their life to contain a sudden surge in the nationalist True Finns party.
But it's Not Just at the Polls. The Backlash
Is Also Spilling out onto the Streets.

Last week, Italian demonstrators clashed with police in Turin, while thousands more marched in the central city of Rieti to denounce the government's reforms.
In France, trade unions organized not just dozens -- but HUNDREDS -- of demonstrations, from Marseille in the south ... to Strasbourg in the east ... to Paris and beyond in the north.
All over the euro zone -- in Spain, Portugal, Italy, France, Greece and elsewhere -- the population is rebelling against spending cuts.

Precisely as we predicted many moons ago, the austerity has been ...
o Too little, too late to heal decades of borrow-and-spend damage, and
o Too much, too soon for a population addicted to debt and government largesse.

The end result: The Western World Now has a Long Line-Up of
Once-Proud Politicians Cornered Like Rats!
They see no way out.
When they persist with borrow-and-spend stimulus, foreign creditors dump their government bonds and threaten to shut down their entire economy.
When they pursue austerity, angry voters and striking labor unions rise up in rebellion, also threatening to shut down the entire economy. And when they flip-flop from stimulus to austerity, they get trapped between BOTH at the same time.
They see no way out. And so they resort to the same, short-sighted tactic that has doomed so many great civilizations in history: They devalue their currency -- a quick-and-handy device to confiscate wealth from their own people.

Just since August 2008 ...
The U.S. Federal Reserve has printed a whopping $1.963 trillion dollars.
The European Central Bank has chipped in with $1 trillion worth of euros.
The Bank of England has cranked up its sterling-printing presses to the tune of $520 billion.
The Bank of Japan has printed the equivalent of $322 billion.
And other central banks are jumping in as well.
All told, the outright money-printing thrown at this crisis just in the last three years (excluding trillions in other stimulus and bailouts) exceeds $4 trillion!
What's Next?
Are the central banks finished printing money? Or is the orgy of money-printing we've seen so far only the beginning?
How will this tsunami of unbacked paper money impact YOU? Your income? Your cost of living? Your quality of life? Your investments? Your retirement?
Is global hyperinflation directly ahead? If so, how bad will it be?
How high will gold go? What about silver and oil?

If you would like to discuss more on this topic, feel free to call on me at 614-310-7520.

Patrick McCarthy

Stonegate Mortgage