Global systemic crisis - Confirmation of a Major Alert for the second half of 2011

[Emillereid]

GEAB N°55 is available! Global systemic crisis - Confirmation of a Major Alert for the second half of 2011 – Explosive fusion of world geopolitical dislocation and the global economic and financial crisis

- Public announcement GEAB N°55 (May 16, 2011) -
http://www.leap2020.eu/GEAB-N-55-is-available-Global-systemic-crisis-Confirmation-of-a-Major-Alert-for-the-second-half-of-2011-Explosive_a6520.html




Almost a year ago LEAP/E2020 identified the second half of 2011 as a new critical point in time in the development of the global systemic crisis. Just like our February 2008 anticipation highlighted a major shock affecting the US economy in September 2008, our team confirms in this GEAB issue that all the conditions have now been met for the second half of 2011 to be the stage for the explosive fusion of two fundamental trends underlying the global systemic crisis, namely world geopolitical dislocation on the one hand and the global economic and financial crisis on the other.

In fact, for several months the world has experienced an almost unbroken succession of geopolitical, economic and financial shocks which, according to LEAP/E2020, constitute the warning signs of a major traumatic event that we analyze in this issue.

At the same time the international system has now passed the stage of structural weakening to enter a phase of complete decay where old alliances are breaking down, whilst new communities of interest are emerging very quickly.

Finally, any hope for significant and lasting global economic recovery has now evaporated (1) whilst the Western pillar’s indebtedness, especially the US, has reached a critical level unparalleled in modern history (2).


The catalyst for this explosive fusion will obviously be the international monetary system, or rather international monetary chaos which has been further exacerbated since the disaster that struck Japan last March and in front of the inability of the United States to face the requirement for an immediate and significant reduction of its huge deficits.

<snip>

Summer 2011 will confirm that the US Federal Reserve has lost its bet: the U.S. economy has, in fact, never left the "Very Great Depression" (4) which it entered in 2008 despite the trillions of dollars injected (5), as the vast majority of Americans are perfectly aware of (6). Unable to launch a QE3 (even unofficially through its Primary Dealers as it used to do until the world became too closely interested in the US Treasury Bond market), the Fed will helplessly watch interest rates rise, US government deficit costs explode, the world dive into an intensified economic recession, stock exchange collapse and the US dollar show erratic behavior, making short-term saw-tooth movements, depending on the influence of these events, before suddenly losing 30% of its value as we anticipated in the last issue (7).


lots more at link

[provis99]

1. aha! That's when the Rapture really is.

[postulater]

2. This is all foreign language to me.

It sounds bad. Should I consider trusting this?

[Pale Blue Dot]

3. They've been right far more often than they've been wrong. nt

[JDPriestly]

4. 50,000 square feet of space available for lease in Pasadena, Ca. Convenient -- right above

a bank in a well designed building -- across the street from the Bentley, Porsche and Audi showrooms.

This economic crisis is only for the little folks.

The rich are living better than ever.

[golfguru]

5. If the rich earned their money legally

I can't sit here and begrudge them. I have the same
opportunity to get rich, and believe me I am trying
like hell and not doing badly.

[JDPriestly]

6. But who is earning money legally and productively in this economy?

I can't figure that out.

If I could, I would agree with you, totally agree with you.

[golfguru]

7. one class of people are surely not getting rich "productively"

and they are the stock traders & corporate raiders.
I frequent a web site dedicated to stock trading, and
these people do a lot of "scalping". Which simply means
they buy and sell quickly capitalizing on daily fluctuations
in prices. But it is perfectly legal. And they risk their
capital on each trade. But adds ZERO productivity to economy.

The corporate raiders are even worse. They buy a outfit in trouble,
and sell parts of it, milk the remaining assets and then disappear.

However majority of people who get rich are small business owners
and real-estate investors. My hat's off to them.

[JDPriestly]

9. Problem is a lot of small business owners mostly have lost

money in recent years. And those who invested in real estate at the slightly wrong time are completely over their heads.

That is why I am so skeptical. So many hardworking small business owners have lost so much, while the very wealthy Wall Street crowd contribute nothing to society and make most of the money.

[mistertrickster]

8. US indebtedness is NOT higher than it's ever been.

It's 40 percentage points lower than after WW2.

It's also about the same as the Euro average and much lower than Japan and Singapore.

[Po_d Mainiac]

10. Where in the article does it state

That US debt is higher than it's ever been? I saw the term unsustainable

Also your comparison is weak. At the end of WWII the US was a net exporter, and the majority of the debt was owned by Americans. The economy was based on manufacturing, and the US was the only sovereign who's infrastructure hadn't been blown to dog shit. Thus the debt was high, but able to be paid down

Today the major holders of US debt (other than central bank) are foreign and the economic base is consumer driver. We also carry a heavy burden due to the negative trade balance.

On top of the debt carried by Federal, State and Local Gov'ts; John Q is also awash in debt. That is also a factor that didn't exist mid-40's

Japan's debt is held primarily by Japanese, and until the recent disasters a net exporter (not sure what the current numbers are). Japanese bonds can crash, but it would be at the hands of her own population.

[mistertrickster]

11. Where in the article does it state that US debt is higher than it's ever been?

Here:

the Western pillar’s indebtedness, especially the US, has reached a critical level unparalleled in modern history . . .

Also "Today the major holders of US debt (other than central bank) are foreign" is questionable . . . "The chart below, courtesy of Politcal Calculations, shows U.S. individuals and institutions, when including the Social Security, U.S. Civil Service and Military trust funds own 62.2% of the U.S. national debt, while foreign nations own the remaining 37.8%."

http://seekingalpha.com/article/246958-guess-who-owns-the-most-u-s-debt-not-china

[sendero]

13. Our "entitlement" obligations..

... are what put the "projected" debt so high. Also, at the end of WWII we were victorious, had just ramped up huge industrial capacity, had the world as our market as every other producer was decimated.

I'd be very careful about making comparisons to that time, this time is NOTHING like then.

[roamer65]

12. Get ready for QE3 and QE4.

[sendero]

14. They are going to print..

... and ZIRP until they can't.

Which really isn't that far off.