Monday , 17 June 2024

Global Systemic Crisis Coming THIS Summer!

This summer will confirm that the US Federal Reserve has lost its bet: the U.S. economy has, in fact, never left the “Very Great Depression” …despite the trillions of dollars injected… Unable to launch a QE3, the Fed will helplessly watch interest rates rise, US government deficit costs explode, the world dive into an intensified economic recession, stock exchanges collapse and the U.S. dollar show erratic behavior… before suddenly losing 30% of its value. Words: 1157

So says an article* by which Lorimer Wilson, editor of  (It’s all about Money!), has further edited ([  ]), abridged (…) and reformatted below  for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. The article goes on to say:

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:
  1. world geopolitical dislocation and
  2. the global economic and financial crisis on the other.
[Indeed,] the almost unbroken succession of geopolitical, economic and financial shocks the world has experienced over the last several months constitute the warning signs [that the]  major traumatic event that we analyze in this issue [is unfolding]. 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. Any hope for significant and lasting global economic recovery has now evaporated whilst the Western pillar’s indebtedness, especially [that of] the U.S., has reached a critical level unparalleled in modern history.

The catalyst for this explosive fusion will obviously be the international monetary system – the 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.

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The end of QE2, the symbol of, and factor in, the explosive fusion now underway represents the end of an era where the U.S. Dollar was the currency of the United States and the rest of the world’s problem [and is now] becoming the main threat weighing on the rest of the world and [on] the United States [in particular].

[With the U.S.] unable to launch a QE3 the Fed will helplessly watch interest rates rise, US government deficit costs explode, the world dive into an intensified economic recession, stock exchanges collapse and the U.S. dollar show erratic behavior before suddenly losing 30% of its value. At the same time Euroland, the BRICS and commodity producers will rapidly strengthen their cooperation while launching a final attempt to salvage the international institutions created by Bretton Woods and the world dominated by the US /UK duo.

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The world is preparing for a new economic, social and geopolitical shock with barriers, security, export embargos, diversification of reserves, frenzy over commodities and widespread rising inflation:

  • China has just announced that it is halting all diesel exports to try and stop a rise in fuel prices that recently caused a series of strikes by road hauliers.
  • Russia has also stopped exporting certain oil products to limit domestic shortages and price increases, having halted the export of certain cereals several months ago.
  • Across the Arab world, instability continues to prevail against the backdrop of the rising cost of basic food commodities whilst questions over the extent of Saudi Arabia’s oil reserves and production capacity have resurfaced.
  • In the United States, any weather event out of the ordinary immediately causes the risk of shortages due to the lack of a security “buffer” in the U.S. distribution system, except to call upon strategic stockpiles. Meanwhile, the population reduces its spending on food in order to fill the tanks of their cars at more than 4 dollars a gallon.
  • In Europe, the decline in social security and extreme austerity measures implemented in the United Kingdom, Greece, Portugal, Spain and Ireland, … will cause an explosion in the number of poor.
  • The EU has more or less surreptitiously just reinforced its customs arsenal to withstand Asian imports in particular. First, it has reviewed its whole paraphernalia of preferential tariffs to eliminate all emerging nations, China, India and Brazil first of all. Second, at the end of 2010, it discreetly passed legislation to facilitate the implementation of anti-dumping and safeguard measures, because now a simple majority is sufficient to pass such a proposal with the Commission, whilst previously a qualified majority was needed, often difficult to marshal.
  • Meanwhile, central banks continue to buy gold to diversify their reserves whilst, [at the same time,] taking the increasingly inconsistent and dangerous steps of increasing interest rates to counter inflation in a context of economies that are weak or in recession to counter the influx of liquidity generated by the US Federal Reserve’s policies.

The U.S. is completely in dreamland. Whilst it has reached unsustainable levels of debt, the leaders in Washington have made this topic an election issue, as illustrated by the question of the Federal debt ceiling… Comparisons abound in the U.S. and international financial press with the Clinton years where a similar problem had arisen without major consequences. Obviously a sizeable part of the U.S. elite and financiers haven’t yet taken on board the fact that, unlike the 90s, the United States today is seen as the “sick man of the world” in which any sign of weakness or serious inconsistency can trigger uncontrolled panic.

Crazy central bankers, world leaders without a roadmap, economies at risk, inflation rising, currencies in trouble, frenzied commodities, uncontrolled Western debt, unemployment at its highest, stressed societies …

There’s no doubt that the explosive fusion of all the above events will really be the memorable event of the second half of 2011!

Related Articles:

  1. U.S. Debt Default Risk is Up Dramatically YTD
  2. These Signs Suggest Global Economy at a ‘Tipping Point’!
  3. Are You Properly Positioned for the Global Slowdown Ahead?
  4. Inflation to Surpass 4% in 1 Year; 6% Within 3 Years – Here’s Why
  5. The U.S. is Headed Towards Self-inflicted Disaster: Here’s Why
  6. America’s Political Process Guarantees Another Financial Crisis!
  7. Be Forewarned: Worldwide Systemic Financial Risk is Rising Rapidly – Again
  8. Stephen Roach: Chances of World Sliding Back into Recession a Distinct Possibility
  9. Martin Armstrong: The Next Wave Begins June 13th, 2011

Editor’s Note:

  • The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
  • Permission to reprint in whole or in part is gladly granted, provided full credit is given as per paragraph 2 above.
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