The initial concerns over the bailing out the irresponsible spending of countries in southern Europe were costs of doing so, but according to Citigroup (NYSE:C), that has now changed to how much effect it will have on growth.
Coupled with problems of inflation emerging in China and how that may cut into demand for raw materials and other products, and you have a potentially disastrous economic situation emerging before out eyes.
Add to that hints from the Federal Reserve that they will probably be throwing billions into the bailout of the EU countries, and it’s shaking up the markets once again.
Somehow transferring the bailout money from the countries of Europe to the banks of America is supposed to make us feel better about the ongoing throwing of money at every economic problem that arises. The impression given is it’s almost like an addiction to the central banks around the world, which in fact should be reined in. Throwing money at those who are unwilling to really curb spending is like offering an alcoholic more booze to fight off his addiction. It just doesn’t work.
Citigroup also added that China battling inflation and property bubble challenges have also produced economic “headwinds,” and it’s uncertain the degree to which this combined situations (included European debt) will cut back on imports of Europe and China.
