Germany’s Crisis & its Impact on US Markets Germany — Europe's largest economy — is plunging deeper into economic recession …

Historically, when Europe has fallen into a serious economic recession it has found its way across the pond to the US and threatened the US economy in the following months? …

Now, as I stated in a recent Option Pit post, Trump Must Act Quickly,? I believe the US will fall into recession in the next 9-12 months …

However, I do see the potential for a major positive event that could boost the European and US economy and push serious economic problems further down the road.?

Today, we’ll look at the current issues and the events that could rescue the global economy in 2025 …

Unpacking the critical points of the current German crisis.

Germany's current economic woes are driven by its struggling manufacturing sector, which has entered a prolonged period of contraction. The nation’s Purchasing Managers Index (PMI) data highlights a dire scenario:

What does this mean for the US?

The U.S. is not immune to the economic contagion spreading from Europe. Parallels between the German and American economies are emerging:

The U.S. manufacturing PMI remains below 50, signaling contraction, while durable goods orders are declining.

Spreading Economic Weakness

Layoffs on the Rise - the U.S. labor market is seeing early signs of layoffs, particularly in sectors tied to manufacturing and retail.

Consumer Spending Concerns -? Inflation-adjusted retail sales are flat or declining, mirroring the spending pullback seen in Europe.

Capacity utilization in the U.S. is declining - this is a precursor to rising unemployment.

Weak retail performance during the holiday season could send the US into recession … Unless …

A Trump Hail Mary Pass Could Provide an Economic Boost

Trump’s emphasis on "America First" suggests his strategy to reduce the financial and human costs of prolonged U.S. involvement in external wars could bring a peace treaty to the Russia/Ukraine conflict and possibly the middle east as well.

His approach to peace is often achieved with economic incentives, using sanctions, trade deals, and financial aid as leverage …

By linking peace agreements to economic benefits, such as investment opportunities or infrastructure support, Trump may create a framework where international cooperation aligns with national interests.

Trump’s Inner Ronald Reagan

Trump certainly has visions of being a global mediator rather than a military enforcer, focusing on diplomacy and strategic alliances to maintain influence.

However, similar to Reagan’s presidency it is impossible for any economy to overcome the dreaded “Stagflation”, which brings inflation AND weak economic growth …

The only cure for stagflation is the needed “cleansing” of debt prior to experiencing a new beginning and extended economic growth ..? Period!?

Stay tuned for more updates and insights as we continue to track these critical developments.

Live and Trade With Passion My Friends,

Bill Griffo?

PS: Please Follow us on Facebook at https://www.facebook.com/GriffoWilliam/ to see many more insights into the markets and its impact on your retirement portfolio ...