By: Reuters

The U.S. dollar rose across the board on Thursday as weak economic data from the United States, Europe and China spurred investors to flee riskier currencies and seek shelter in the greenback.  

U.S. jobless claims indicated the labor market is still struggling, while signs of softening in U.S. manufacturing and weakness in global output heightened the aversion to risk.The reports reinforced the impression that the Federal Reserve did not act aggressively enough on Wednesday.

“We’ve come back to the situation where the data was weak and concerning and we have anti-risk sentiment going on, which tends to benefit the dollar,” said Tom Fitzpatrick, chief technical strategist at Citigroup.

“In addition, nothing has really been done in Europe to solve the debt crisis, and as a result the underlying dynamic has not really changed. Therefore, we should continue to expect the dollar to outperform other currencies.”

The euro came under fresh pressure after data showed Germany’s private sector shrank in June for the second month running, with manufacturing activity hitting a three-year low. The euro posted its largest daily loss against the dollar in more than three months.

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EU poised for $943B Spain, Italy bailout

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Economic collapse in Greece is finally sinking into the consciousness of its citizens

Wednesday, June 20, 2012 by: J. D. Heyes

(NaturalNews) Greek citizens may have narrowly avoided an economic catastrophe following a vote this week to remain with the euro, the fact that their country is slipping further towards a financial abyss is becoming more ingrained in their psyche.

On Sunday voters narrowly elected a center-right New Democracy Party to take the reins of power in a country that, besieged by debt and teetering on the brink of insolvency, is literally in chaos. For months now, Greece has only managed to exist, not thrive, as successive bailouts of its government by the European Central Bank (led mostly by German efforts and money) have kept Athens from tumbling headlong over an economic cliff that, frankly, its leaders should have seen coming years ago.

Even now the bailouts – once gratefully considered a lifeline – are now being panned by vast numbers of Greek leaders and citizens who abhor the fact that the money is flowing with so many strings attached. Mindful of Greece’s expensive social benefits packages for government workers and citizens alike, those who are forking over euros by the billions have only done so by insisting Athens accept some of the most restrictive austerity measures ever imposed on a government.

Those measures, more than anything, have led to Greece’s current crisis. And that’s what Sunday’s vote was about: Forging ahead as best as possible while accepting the mandatory cuts to pay and benefits, no matter how painful they are, or reject them out of hand, ditch the euro and start printing drachmas again which, according to scores of economists, would have almost instantly created a situation of hyper-inflation in Greece or hyper-devaluation of the “new” currency or more likely, both.

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Europe’s train-wreck and the inevitable collapse of the global economy

June 20, 2012 – ECONOMY – Yes, it is officially time to start freaking out about the global economy. The European financial system is falling apart and it is going to go down hard. If Europe was going to be saved, it would have happened by now. The big money insiders have already pulled their funds from vulnerable positions and they are ready to ride the coming chaos out. Over the next few months, the slow motion train-wrecks currently unfolding in Europe will continue to play out and things will likely really start really heating up in the fall, once summer vacations are over. Most Americans greatly underestimate how much Europe can affect the global economy. Europe actually has a larger population than the United States does. Europe also has a significantly larger economy and a much larger banking system. The world is more interconnected today than ever before, and a collapse of the financial system in Europe will cause a massive global recession. Once the global economy slides into another major recession, it is going to take years to recover. The pain is going to be immense. Yes, that is going to include the United States. Sadly, we never recovered from the last recession, and it is frightening to think about how much farther this next recession is going to knock us down. The big problem is that there is simply way, way, way too much debt in the United States and Europe. It has been a lot of fun spending all of this borrowed money, but now we get to pay the price. Citigroup Chief Economist Willem Buiter says that both Italy and Spain are going to need major bailouts and despite the new Greek elections in favor of a continual bailout by Euro nations, Greece will have to bite the austerity bullet with no chance of the loan payments being restructured as many Greeks are hoping. German Chancellor Angela Merkel has declared that Germany will not budge at all on the terms of the Greek bailout. If you are looking for some kind of a global financial miracle; you can stop watching. If European leaders had a master plan to save Europe, they would have shown it by now. The entire house of cards is starting to come down and things are going to get really messy.  A lot of people both in the United States and in Europe are going to lose their jobs and their homes over the next few years. It is likely that the next recession will be even more painful than the last one was.

Greece Looks Towards Bailout Austerity & Fed Talks Stimulus As Economy Wanes

Liberty CPM News
June 19, 2012

Things should remain calm in Greece for the next couple of weeks. Affairs will be internal as the largest party, New Democracy (ND), will attempt to form a coalition government.

This is likely to transpire in one way or another as the risk of eurozone collapse will implore political leaders in Greece to reach a consensus in order to enter into talks with European partners, namely the ECB and Germany.

The coalition will support the euro and it will likely support a bailout program. But, discussion of “austerity” will lead into a world of euphemisms as to what degree austerity can be implemented will be discussed.

European partners will insist on further austerity and will be disinclined to provide financial assistance, even though the living standards of Grecians has been already lowered by 30% or so.

Europe, however, has a history of instability with its multi-party structures, and it could take more votes before a stable government can be formed.

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