Wednesday, June 20, 2012

GEAB N°66 is available! Red alert / Global systemic crisis

1 Global recession (no more engine of growth anywhere / the end of the myth of the "US recovery") (5)

2 Growing insolvency of the western banking and financial system

3 Increasing fragility of key financial assets such as sovereign debt, real estate and the CDS which form the base of the large global banks balance sheets

4 Fall of international trade (6)

5 Geopolitical tensions (particularly in the Middle East) approaching the point of a regional explosion

6 Global geopolitical blockage at the United Nations

7 Rapid collapse of the whole Western asset backed retirement system (7)

8 Increasing political divisions among the world "monolithic" powers (USA, China, Russia)

9 Lack of any “miracle” solutions as in 2008/2009, because of the growing powerlessness of several major Western Central banks (FED, BoE, BoJ) and the debt of the States

10 Credibility in free fall for all countries to assume the dual burden of public debt and excessive private debt

11 Inability to control/slow down the progression of the growing and now massive long-term unemployment

12 Failure of monetary and financial stimulus to stop the global depression

13 Quasi-systematic ineffectiveness of international forums G20, G8, Rio + 20, WTO,... on all the key themes of what was a global agenda (8 a total lack of consensus on virtually all matters of importance: economy, finance, environment, conflict resolution, global poverty,...

According to LEAP/E2020, the second half of 2012 will mark the major inflection point of the global systemic crisis. It will be characterized by a phenomenon which is in fact very simple to understand: If Euroland is today able to approach this period in a promising way (9), it is because it crossed in recent years a crisis of intensity and unmatched since the beginning of the project of European construction after the second World War (10).

From the end of summer 2012, all of the other world powers, led by the United States (11), will have to face an identical process. The United States after having tried by all means to delay or defer the crisis, the hour of payment finally arrives. And as in anything, the ability to delay the inevitable comes at a high price, namely a bigger shock of adjusting to the new reality.

This is in fact the end of party for the world of before the crisis.

This fall we will witness the collapse of the “dollar wall”; like the sound of the 7 trumpets which brought down the walls of Jericho, the period September/October 2012 will witness the fall of the last sections of the "dollar wall" and the end of the empire which has protected the world we have known since 1945.

The shock of the fall of 2008 will look like a small summer storm compared to what will affect the planet in a few months time.In our modest attempt to publish a regular "crisis weather forecast", we must give our readers a "red alert" because the upcoming events which will shake the world this fall belong in that category.

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