- Are we in a Depression? More are coming around to the conclusion! IMF Says Advanced Economies Already in Depression :
Advanced economies are already in a “depression” and the financial crisis may deepen unless the banking system is fixed, International Monetary Fund Managing Director Dominique Strauss-Kahn said.
“The worst cannot be ruled out,” Strauss-Kahn said in Kuala Lumpur, where he was attending a gathering of central bankers from Southeast Asia. “There’s a lot of downside risk.”
Ten days ago, the IMF cut its world-growth estimate for this year to 0.5 percent, the weakest pace since World War II. Stimulus packages alone won’t succeed in dragging the global economy out of recession unless confidence is restored in the banking system, Strauss-Kahn said today. “All this will work if, and only if, the different countries are likely to do what they have to do in terms of restructuring the banking sector,” he said. “And today it’s not done.”
“There is hope that the fiscal and monetary stimulus measures being implemented around the world can help turn things around,” said David Cohen, Singapore-based director of Asian economic forecasting at Action Economics. “But there is still the risk it can be short-circuited by further financial turmoil.”
Asian nations will need a recovery in the global economy before the region can exit a slowdown, the IMF said this month. Strauss-Kahn said today the fund’s forecast for a recovery to start in 2010 is “very uncertain.”
- The usual ‘banking system need to be fixed’ comments. How many times have we heard this before? We are already into the 2nd bailout for banksters. The derivatives exposure is something like US$512T for all these banksters. All the money in the world cannot fix this financial blackhole. It is time to let them go bust and stop throwing good tax payer’s money to these banksters who have been hijacking us. Why bankrupt the whole country for the sake of these banksters? I prefer to keep and spend my money to boost the economy. Who caused the problem? FedRes and their bankster buddies!
“If you want to continue to be the slaves of bankers, and pay the cost of your own slavery, then let bankers continue to create money and control credit,” warned Sir Josiah Stamp, former chief of the Bank of England in 1927
- The 21st Century Great Depression has begun and has 7 more years to go. Gary Dorsch writes in Political Elite on Guard Against Global Economic Depression and Gold Safehaven :
… the world economy is now held hostage by an elite banking cartel, whose reckless pursuit of speculation and bloated profits, has precipitated a breakdown of the global financial system, and is plunging the world towards a “Great Depression.”
The global economy will grind to a halt this year, the IMF predicts , after $ 30 -trillion in market capitalization was erased from world stock markets since October 2007, in the wake of the worst banking crisis since the Great Depression of the 1930′s. ….
Global trade collapsed by 45% in the fourth quarter from a year earlier, exposing the staggering depth of the global financial crisis. Speaking at Davos , Switzerland last week, Australian trade minister Simon Crean warned that falling global trade would compound the economic downturn. “If global trade is a multiplier in growth, it also has the potential to be a multiplier in reverse,” he warned on Jan 31st .
- Global trade plunged 33% in the 1929-1939 Great Depression. We have now exceeded that benchmark. The current slide is breaking all records for speed of collapse!
- Is the MSM deluding the sheeple into thinking this will just be a recession? Obviously. All these analyst forecasting a rebound in 2010 are going to have to eat their words very soon ! However, there are sane forecasters like Eric Sprott Another Prominent Economist Forecasts Depression, Says Gold To Hit $2000 :
Canadian investor Eric Sprott, who rightly predicted the collapse of banking stocks last year, has told Bloomberg News that the U.S. has entered the worst economic slowdown since the Great Depression: “The trend is down, and there’s not one signpost that says it’s changing yet,” Sprott said yesterday from Toronto. “We’ll stand by to wait to see those, and until it does, you have to assume it gets worse.”
Sprott, the chairman and founder of Sprott Asset Management Inc., a company worth $4.5 billion, also said that he sees gold prices hitting $2000 as a result of a systemic financial meltdown:
“The window to raise money for gold stocks has blown open,” Sprott said. “The investing public has started to go to that one thing that they think it’s safe to invest in.” Gold is currently trading at around $908 per ounce, and while other commodities are falling off, gold producer’s stocks have almost doubled in the past three months.
Sprott also warned that the foreign investment in U.S. Treasury securities could dry up as countries concentrate on their own financial markets. Sprott said such activity would be “catastrophic”:
“When do people stop buying the credit of the country? That’s a tough question to answer, but it’s on a lot of people’s lips right now,” he said. “Each country has their own financial problem, so there’s no funding for anything external.”
- Investment in Treasury bonds is already dropping. Witness the dramatic rise in yields for the past few weeks. The FedRes has been reminding everyone that they will buy Treasuries. A sign of panic really !
- Martin Weiss writes in United States Day of Reckoning Treasury Bond Market Collapse Underway :
we are nearing Washington’s great day of reckoning. On the not-too-distant horizon, we can already begin to see …
- The end of Washington’s futile attempts to stop the explosive collapse of the U.S. economy and stock market …
- The end of the slow-motion disintegration we’ve seen in corporate earnings, stocks and bonds, plus …
- The end of the slow, incremental rise in unemployment.
And just beyond that horizon, don’t be surprised to see …
- A massive collapse in the economy and stock market, triggering a tidal wave of bankruptcies, despair and even homelessness …
- A massive, global cleansing of the debt that caused this crisis …
- And, provided we avoid some major pitfalls, the first step toward rebuilding the foundations upon which our economy can grow for generations to come.
Before Washington’s day of reckoning, the American people think that government resources are abundant and even unlimited; after the day of reckoning, those resources suddenly become scarce, often non-existent.
Before the day of reckoning, it’s widely believed that the government has the power to prevent, end, delay or cushion this crisis; after , it’s finally recognized that the government’s actions merely deepen, aggravate and prolong the crisis.
Before, the government remains committed to doing everything it can to fulfill the people’s belief; after, it begins to abandon its rescue efforts, allowing the economy to fall on its own weight.
Suddenly, government omnipotence is replaced by government impotence; generous largesse is replaced by miserly penny-pinching.
- America can no longer borrow its way out of its problem. A country can borrow US$10T to boost the economy today. But it will have to pay back the US$10T some time in the future. You may boost the economy now with debt stimulus. But the economy will crash when you pay back the US$10T in the future. Effectively you are mortgaging your future for current economic growth. Withdrawal of US$10T from the economy will collapse it. This is essentially the stage America is in. It’s payback time!
- Martin Weiss again :
Global investors are already growing skeptical that too many government agencies, corporations, states, counties and cities will be unable to make good on the interest and principal they’re promising to pay. And since December 18, we have already seen a sneak preview of what could lie ahead: A massive plunge in the price of Treasury bonds.
That price decline, however, is just ONE symptom of Washington’s coming day of reckoning. Another is the sinking confidence in U.S. investments around the world. Some prime examples:
- Last Wednesday, at the World Economic Forum in Davos, Switzerland, China’s Premier Wen Jiabao laid the responsibility for this global crisis squarely on Washington’s doorstep: The financial crisis, he said, is “attributable to inappropriate macroeconomic policies and their unsustainable model of development characterized by prolonged low savings and high consumption; excessive expansion of financial institutions in blind pursuit of profit.”
The implication: A major, across-the-board reassessment in China’s investments in the U.S.
- Last year, China ended all new investments in a number of U.S. companies.
- Also last year, China dumped $26.1 billion in Fannie Mae and Freddie Mac bonds — just in the five months ending November.
- Major investors in Japan, Russia, Western Europe, the Middle East, and Latin America — whether politically aligned with the U.S. or not — are also showing signs of slowing down, stepping back, or even pulling out of U.S. investments.
Fast forward to Washington’s day of reckoning and you will see how the bailout game could end:
On that day, Washington will have to either pay rates of interest that wound paralyze, and virtually KILL the economy … or it will have to slash and even abandon its bailout efforts.
Ultimately, it will have no choice but to step aside and let failing companies fail … collapsing industries collapse … and sinking markets sink. The carnage will be traumatic and terrifying. But it will also be the beginning of the end of the crisis. Once trillions in toxic debt are swept away, America will finally be ready to lay the foundations upon which this economy can grow for decades to thereafter.
In the meantime, though, if you thought 2008 was a nightmare, brace yourself. The months ahead are likely to be far more brutal than anything we’ve seen so far.
- How bad is it going to get? We will know pretty soon!
- Dr Doom himself highlighting the esoteric Zimbabwe School of Economics which America is into.
- Soon, very much like Zimbabwe, 3 eggs will cost US$ 100 billion. All of us will no doubt be Trillionaires. But we probably cannot afford breakfast. All our hundreds of thousand of dollars of savings, will not buy us chicken shit ! Hyper-inflation destroys savings ! So what’s not to like about Gold ?
- The spectre of a Greater Depression looms large. Many forecasters have been warning about it. Gerald Celente has no doubts that riots and unrest will occur in America.
- Now, WTO Chief Pascal Lamy has added his voice to the growing concern, WTO chief warns of looming political unrest :
The global economic crisis could trigger political unrest equal to that seen during the 1930s, the head of the World Trade Organization (WTO) said in a German newspaper interview Saturday.
“The crisis today is spreading even faster (than the Great Depression) and affects more countries at the same time,” Pascal Lamy told the Die Welt newspaper.
Questioned about the risks of political instability, Lamy — who wraps up his four-year term as WTO director-general in September — responded that that was “the main danger”. “This crisis weighs heavily on politics and puts peace in danger,” he said.
“Some democracies are old and sufficiently stable to overcome such problems, (but) others are going to be confronted by unrest and inter-religious and inter-ethnic conflicts.”
- As mentioned in my past posts on riots and unrest, we are entering a period which looks increasingly like what happened in between the 2 World Wars. Now, even the WTO chief is highlighting it. Are all these prelude to a major World War?
- IMF Chief Strauss-Kahn remarked in a similar fashion IMF Chief Warns Of Riots In Response To Economic Crisis :
The head of the International Monetary Fund has warned that advanced nations will be hit by violent civil unrest if the elite continue to restructure the economy around their own interests while looting the taxpayer.
During a speech in Madrid, Dominique Strauss-Kahn said that “social unrest may happen in many countries – including advanced economies” if governments failed to adequately respond to the financial crisis.
“He added that violent protests could break out in countries worldwide if the financial system was not restructured to benefit everyone rather than a small elite,” reports the Guardian. Strauss-Kahn’s comments echo those of others who have cautioned that civil unrest could arise, specifically in the U.S., as a result of the wholesale looting of the taxpayer and the devaluation of the dollar.
- See also :
Riots Around the World Because of High Unemployment!
Global Depression – Social Unrest – Violent Protests
Riots in Europe – Signs of Things to Come ?
Gerald Celente – Trends 2009
Riots, riots & more riots II