There are signs of a Downturn in Europe

The European edition of the Wall Street Journal reports that Denmark is in economic recession and the whole euro zone is in danger of following the Danes.

Emma Charlton and Joel Sherwood report "The Purchasing Managers Index for the euro zone's manufacturing sector contracted in June for the first time in three years, dropping to 49.2 from 50.6 in May, research group Markit Economics said. A PMI reading above 50 signals an expansion in manufacturing, while a level below 50 indicates a contraction.

"Europe's economies are currently facing a toxic combination of elevated inflationary pressures, higher oil prices, strong exchange rates, weakening global growth and tight credit conditions. Denmark, Spain, the United Kingdom and Ireland also face falling housing prices after a recent boom, trailing a trend set in the U.S. after a two-year lag."

Unlike our Fed, who is fighting the U.S. recession with the wrong weapon, The European Central Bank (the ECB) is raising rates.