European Economic Collapse: This Indicator Says Europe Is in Trouble

European Economic CollapseSigns Point to European Economic Collapse

After a year of mayhem, the European economic collapse may finally be upon us. Key indicators are all flashing red as the continent slips into decline. The crash is coming and Germany is ground zero.

A slowdown in Germany would be disastrous. It is the European economy’s economic powerhouse, the one nation that could bolster faith in the euro. And yet there are disturbing trends emerging in Germany’s domestic data.

The country’s retail sales are in the midst of a stunning decline.

The Case of Missing Exports

The data show an overwhelming pullback in German retail sales during 2015. In fact, the rate of contraction in January was the highest it has been in 16 months. (Source: “Markit Germany Retail PMI,” Markit Economics, February 4, 2016.)

Either German citizens are cutting back on spending or they’ve reduced demand for other reasons. Regardless of the cause, the timing is horrific.

German Retail Sales Chart

Aside from weak domestic demand, German exports to Asia have also crumbled. The Chinese economy grew at just 6.9% in 2015—its slowest pace in 25 years—so demand was tepid. The German economy is collapsing from both sides, external and internal.

If Germany does experience an economic crash, the probability of a widespread European economic collapse rises significantly.