Summer 2009: The international monetary system’s breakdown is underway (LEAP/E2020)

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In this issue of the Global European Anticipation Bulletin, our researchers anticipate the different forms a U.S. default will take at the end of summer 2009, a U.S. default that can no longer be concealed from this April (most taxes are collected in April in the United States) onward.

Public announcement GEAB N°34 -- LEAP/E2020

April 15, 2009 -- The next stage of the crisis will result from a Chinese dream. Indeed, what on earth can China be dreaming of, caught -- if we listen to Washington -- in the “dollar trap” of its 1.4 trillion worth of USD-denominated debt (1)? If we believe U.S. leaders and their scores of media experts, China is only dreaming of remaining a prisoner, and even of intensifying the severity of its prison conditions by buying always more US T-Bonds and Dollars (2).

In fact, everyone knows what prisoners dream of. They dream of escaping, of course, of getting out of prison. LEAP/E2020 has therefore no doubt that Beijing is now (3) constantly striving to find the means of disposing of, as early as possible, the mountain of "toxic" assets which U.S. Treasuries and Dollars have become, keeping the wealth of 1.3 billion Chinese citizens (4) prisoner. In this issue of the GEAB (N°34), our team describes the “tunnels and galleries” Beijing has secretively begun to dig in the global financial and economic system in order to escape the "dollar trap" by the end of summer 2009. Once the United States has defaulted on its debt, it will be time for the "everyman for himself" rule to prevail in the international system, in line with the final statement of the London G20 Summit which reads as a "chronicle of a geopolitical dislocation," as explained by LEAP/E2020 in this issue of the Global Europe Anticipation Bulletin.

Behind London’s "fools’ game," where everyone pretended to believe that an event of "historical" international co-operation (5) took place, the G20 summit in fact revealed major divisions. The Americans and British (followed by a compliant Japan) desperately tried to preserve their capacity to maintain control over the global financial system, freezing or diluting any significant reform granting more power to the other players, but in fact no longer powerful enough to enforce their aims. The Chinese, Russians, Indians, and Brazilians strove to change the balance of the international monetary and financial system in their favor, but were unable (or maybe, deep down, unwilling (6)) to impose their reforms. The Europeans (the EU without the United Kingdom) proved incapable of making up their minds between the only two options available: duplicating U.S. and UK policies and sinking along with them, or questioning the very roots of the current monetary and financial system in partnership with the Chinese, the Russians, the Indians and the Brazilians. Today the Europeans have avoided following Washington and London in their endless reproduction of failed past policies (7), but they do not yet dare to prepare for the future.

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