According to data from SWIFT, the global messaging service for cash transactions, use of the euro has collapsed over the past nine months. Its share of transactions dropped from 38 percent in January to a measly 23.2 percent at the end of August – this is the lowest level recorded in at least 12 years.
It is now being acknowledged that Europe is more than likely already in a recession. And based on the old standards of calculating a recession, the U.S. is likewise in a recession – and heading towards a great depression that will be much worse than the first one.
All gains made by the euro from December 2022 through July 2023 have now been lost. And since mid-July, the common currency has lost another eight percent against the dollar – and is likely only just getting started in terms of its continued decline.
(Related: Back in August, India and the United Arab Emirates [UAE] completed their first dollar-free sale of oil in rupees rather than in petrodollars.)
The global economy is grinding to a halt as inflation continues to soar
Based on the new standards, the U.S. is expected to "officially" enter a recession in 2024 as the effects of monetary tightening take their toll. Some believe that the dollar will hold roughly steady through the winter months before dropping off a cliff next year.
As poorly as the U.S. is doing right now economically, the Eurozone is reportedly doing much worse. There, growth momentum is declining at the most rapid pace, while the U.S. economy has seemingly magically continued to "hang in there."
Factory job losses across Europe are increasing as new orders decline and business confidence deteriorates. In its 26-year history, the Eurozone HCOB PMI report has never seen this severe of a decline in new product orders across Europe.
The European car sector is struggling as well, and EU leaders have launched their own probe into illegal state subsidies in the Chinese car sector. It remains to be seen what will become of the trade relations between the EU and China moving forward.
"At the end of the day, we believe that the most likely scenario is a negotiated settlement that would either result in some protective measures and / or entails an agreement on Chinese investments in Europe in either the car or the battery sector," reported Zero Hedge.
The European Commission says it will also assess the risks of four critical technologies: semiconductors, artificial intelligence, quantum technologies and biotechnologies such as vaccines and genome sequencing. The aim is to ensure that these technologies are not "being weaponized by countries not aligned with its values."
For the first time since April, there has also been an acceleration in the rate of inflation both here and abroad. There have likewise been substantial increases in energy prices, particularly during the month of September.
"Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will continue to depend upon the data and the evolving assessment of risks," reads a statement from Reserve Bank of Australia (RBA) head Michelle Bullock about the dire situation there.
All in all, the global economic climate is getting uglier and uglier as it nears falling off a cliff, never again to return to what it once was.
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