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GLOBAL SYSTEMIC CRISIS Press clippings

Conférence
- "Comment traverser la crise et le chaos monétaire mondial?" (Paris, le
22/01/11)

Frankck-Biancheri.eu

Brazil's
vehicle sales are record-high in 2010

People's Daily

World
Bank issues its first-ever yuan bonds

China Daily

World
Food Prices Jump to Record on Sugar, Oilseeds

Bloomberg

Overheating
East to falter before the bankrupt West recovers

Telegraph

What
WikiLeaks revealed to the world in 2010

Glenn Greenwald

Too-Big-to-Fail
Banks Face Trade Limits Under EU Plan

Bloomberg

Le
cuivre termine l’année sur un record

Journal des Finances

Brown
May Cut Aid, Ask Voters to Extend Tax Increases

Bloomberg

Europe,
Japan to cancel grain contracts with Australia due to GMO
contamination

Natural News

Les
jeunes sont mal partis

Le Monde

I
Will Not Participate In the Journalism of Appeasement

Amped Status

The
surging pain of foreclosures

Chicago Sun-Times

BofA
Settles Mortgage Claims for $3 Billion; Shares Jump

CNBC

China’s
Naval Ambitions

New York Times

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Accueil > English > Excerpts
and public announcements

Global systemic crisis – New tipping-point in
March 2009: 'When the world becomes aware that this crisis is worse than
the 1930s crisis'

- Public announcement GEAB N°30 (December 16, 2008) -

LEAP/E2020 anticipates than the unfolding
global systemic crisis will experience in March 2009 a new tipping point
of similar magnitude to the September 2008 one. According to our team, at
that period of the year, the general public will become aware of three
major destabilizing processes at work in the global economy, i.e.:

• the length of the crisis
• the explosion of
unemployment worldwide
• the risk of sudden collapse of all
capital-based pension systems

A whole range of
psychological factors will contribute to this tipping point: general
awareness in Europe, America and Asia that the crisis has escaped from the
control of every public authority, whether national or international; that
it is severely affecting all regions of the world, even if some are more
affected than others (see GEAB N°28); that it is directly hitting hundreds
of millions of people in the “developed” world; and that it is only
worsening as its consequences reveal throughout the real economy. National
governments and international institutions only have three months left to
prepare themselves to the next blow, one that could go along severe risks
of social chaos. The countries which are not properly equipped to cope
with a surge in unemployment and major risks on pensions will be seriously
destabilized by this new public awareness.

In this 30th
issue of the GEAB, the LEAP/E2020 team describes these three destabilizing
processes (two of them are described in this public announcement) and
gives recommendations to cope with the surge in risks. In addition, this
issue also provides the opportunity to make an objective assessment of the
reliability of LEAP/E2020's anticipations and specifies a number of
methodological aspects of the analytical process used. In 2008,
LEAP/E2020's success rate reaches 80%, and even 86% when it comes to
strictly socio-econimic anticipations. In a year of major upheavals, our
teal ise altogether quite proud of this result.

The crisis will last at least until the end of
2010

Evolution of the US money base
and indications of related major US crisis periods (1910 – 2008) - Source:
Federal Reserve Bank of Saint Louis / Mish’s Global Economic Analysis

As we already explained in GEAB
N°28, the crisis will affect in different ways the different regions of
the world. However, and LEAP/E2020 wishes to be very clear on that aspect,
contrary to the dominant stance today (coming from those experts who
denied the fact that a crisis was coming up three years ago, who denied
that it was global two years ago, and who denied the fact that it was
systemic six months ago), we anticipate that the minimum duration of the
decanting phase of the crisis is 3 years (1). It shall be finished neither
in spring 2009, nor in summer 2009, nor at the beginning of 2010. It is
only towards the end of 2010 that the situation will start stabilizing
again and improving a little in some regions of the world, i.e. Asia and
the Eurozone, as well as in countries producing energy, mineral and food
commodities (2). Elsewhere, it will continue; in particular in the US and
UK, and in all the countries depending on their economy, were the duration
could approximate a decade. In fact these countries should not expect any
real return to growth before 2018.

Moreover no one
should imagine that the improvement at the end of 2010 will correspond to
a return of high growth. The recovery will take long. For instance, stock
markets will take a decade to return to levels comparable to 2007, if they
ever return to that. Remember that it took twenty years before Wall Street
resumed its 1920 levels. Well, according to LEAP/E2020, the present crisis
is deeper and longer than in the 1930s. The general public will gradually
become aware of the long-term aspect of this crisis in the coming three
months and this situation will immediately trigger two tendencies carrying
with them socio-economic instability: fear of the future and enhanced
criticism towards leaders.

The risk of sudden collapse of all capital-based
pension systems

Finally, among the various
consequences of the crisis for dozens of millions of people in the US,
Canada, UK, Japan, Netherlands and Denmark in particular (3), there is the
fact that, from the end of the year 2008 onward, news about major losses
on the part of the organizations in charge of managing the financial
assets supposed to finance pensions will multiply. The OECD anticipates
that pension funds will lose 4,000 billion USD in 2008 only (4). In the
Netherlands (5) as well as in the United Kingdom (6), monitoring
organizations recently blew the whistle asking for an emergency
contribution reappraisal and a State intervention. In the United States,
growing numbers of announcements call for contribution increases and
benefit reductions (7), knowing that it is only in a few weeks time that
most of these funds will start calculating their total losses (8). Most of
them are still deluding themselves about their capacity to build up again
their capital after the markets turn around. In March 2009, when pension
fund managers, pensioners and governments will become simultaneously aware
of the fact that the crisis is there to last, that it coincides with the «
baby-boomer » generation’s age of retirement and that the markets will not
resume their 2007 levels until many long years (9), chaos will flood this
sector and governments will reach the moment when they will be compelled
to nationalize all these funds. And Argentina, who took this decision a
few months ago already, will appear a pioneer.

All the
trends described above are already at work. Their combination and the
public becoming aware of the consequences they could entail, will result
in the great collective psychological trauma of Spring 2009, when everyone
will realize that we are all trapped into a crisis worse than in the 1930s
and that there is no possible way out in the short-term. The impact on the
world’s collective mentalities of people and policy-makers will be
decisive and modify significantly the course of the crisis in its next
stage. Based on greater disillusion and fewer beliefs, social and
political instability will settle down worldwide.

Finally, this GEAB N°30 presents a series of 13 questions & answers
designed to enhance savers'/investors'/decision-makers' capacity to
understand and anticipate the next stages of the global systemic crisis:

1. Is this crisis different from the previous crises which
affected capitalism?
2. Is this crisis different from the
1930s crisis?
3. Is the crisis as serious in Europe or Asia
as in the USA?
4. Are the current actions undertaken by
public authorities worldwide sufficient to curb the crisis?

5. What are the major risks still weighting on the world financial system?
And are all savings equal in front of the crisis?
6. Is the
Eurozone a true protection shield against the worst aspects of the crisis
and what should the Eurozone do to improve its protection status?

7. Is the Bretton Woods system (in its 1970s last version)
currently collapsing? Should the Euro take the place of the Dollar?

8. What can be expected from the next G20 meeting in London?

9. Do you think that deflation is right now the biggest
threat to economies worldwide?
10. Do you think that the
Obama administration will be able to prevent the USA from sinking into
what you called the ‘Very Great US Depression’?
11. In terms of
currencies, beyond your anticipation of the Dollar resuming its collapse
in the very next months, do you think that the UK Pound and the Swiss
Franc are still currencies with an international status?

12. Do you think that the CDS market is about to implode in the coming
months? And what could be the consequences of such a phenomenon?

13. Is there a ‘US Treasury Bonds Bubble” about to burst?

---------
Notes:

(1) It can be useful to read on this crisis a very
interesting contribution by Robert Guttmann published in the 2nd half of
2008 on the website Revues.org,
supported by the Maison des Sciences de l'Homme Paris-Nord.

(2) As a matter of fact, commodities have already started
contributing to boost the market of international sea transport. Source:
Financial
Times, 12/14/2008

(3) It is in those countries that
capital-based pension systems were most developed (see GEAB N°23) but is
also the case of Ireland. Source: Independent,
11/30/2008

(4) Source: OECD,
11/12/2008

(5) Source: NU.NL,
12/15/2008

(6) Source: BBC,
12/09/2008

(7) Sources: WallStreetJournal,
11/17/2008; Phillyburbs,
11/25/2008; RockyMountainNews,
11/19/2008

(8) Source: CNBC,
12/05/2008

(9) Not to mention the effect of an
explosion of the US T-Bond bubble on pension funds. See Q&A, GEAB
N°30.

Mardi 16 Décembre 2008

In the same category:

«
US Municipal Bonds »: The inevitable major shock of the second half of
2010 - 01/12/2010

Warning Global systemic crisis – First quarter 2011: Breach of the
critical threshold of global geopolitical dislocation
- 17/11/2010

Currencies: the storm will get worse – don’t confuse the waves with the
tide! - 04/11/2010

Global systemic crisis - LEAP/E2020’s analysis of 39 countries’ risks
2010-2014: A collective but contrasting dive into the phase of world
geopolitical dislocation -
16/10/2010

The five steps of the global geopolitical dislocation phase: T4 2009 – T4
2013 - 07/10/2010

The Global systemic crisis – Spring 2011: Welcome to the United States of
Austerity / Towards a very serious breakdown of the world economic and
financial system - 16/09/2010

GEAB in April 2007 - A Chronicle of America’s Very Great Depression – Two
growing trends: A historical reversal of global financial balances / An
implosion of the US society -
07/09/2010

GEAB in June 2007 - Summer 2007: Fed loses control on US interest rates
and crisis reaches China and EU -
30/08/2010

Second half of 2010: Sudden intensification of the global systemic crisis
– Strengthening of five fundamental negative trends
- 12/08/2010

The crisis marks the end of pre-eminence in the financial sphere and the
lasting decline of the City and Wall Street -
28/07/2010

12345»...13

GEAB N°50- Contents

- Published on December 16, 2010 -

Global systemic crisis: Second half of 2011 -
European context and US catalyst - Explosion of the Western public debt
bubble
The second half of 2011 will mark the point in time
when all the world’s financial operators will finally understand that the
West will not repay in full a significant portion of the loans advanced
over the last two decades… (page 2)
. The European context: the
price of the path from laxity to austerity will be partly paid for by
investors (page 5)
. The US catalyst: the paralysis in US
decision-making combined with the rapid degradation of all the country's
public debt criteria has triggered the count-down (page 8)
Read
public announcement

Wikileaks or the disclosure of the US
magician’s diplomatic tricks: Towards the “final
disillusion”
Contrary to what the United States and its allies
would try and have one believe, the massive disclosure of US State
Department documents by Wikileaks is a tipping point in the breakdown of
the international order of these last decades: a magician whose secret
behind his tricks is revealed simply has no means to "delight" his
audience... (page 10)
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Annual
evaluation of LEAP’s anticipations: A 78% success rate in 2010

Before introducing its anticipations for 2011 (to be published in the
January 2011 issue N°51), and on the occasion of an ongoing evaluation of
its analyses, LEAP/E2020 wished, as it does every year, to prepare a
balance sheet of its 2010 anticipations to establish their reliability...
(page 14)
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Strategic
and operational recommendations
. Protecting oneself against
the coming crisis of Western public debt
. Euroland in the face
of the next stage of the government debt crisis: Suffer or anticipate, six
months to choose
. Euroland and the investment banks: forward
to new regulations
. The United States reaches an impasse:
daring to imagine the only way politically to exit the crisis is on top

. GEAB $ Index: Measuring the «true » progress of the US Dollar
(page 19)
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The
GlobalEurometre - Results & Analyses
A very large majority
of respondents (80%) believe that Western public debt will not be repaid
in full… (page 24)
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