The Coming Global Financial Collapse
Jungle Buzz — By JGM Staff on February 25, 2010 at 7:33 pmContrary to the belief among mainstream economists that the “recession” is over it has, in fact, only been delayed by western governments pumping more money into the financial system. U.S. stocks in the Standard & Poor’s were at their lowest point during March of 2009, hitting 12-year lows, before rallying to around 1,150 at the end of the year. Once all the money that governments have pumped into the financial system via “stimulus packages” or “bailouts” run out, we will all have to suffer the consequences. If the global economy were to collapse you can forget about ever retiring, kiss your standard of living goodbye, and pray to keep your job with a serious pay-cut.
An example of how the consequences are global is the current sovereign debt crisis that is going on in Greece. If Greece were to be pardoned of its sovereign debt obligations it would totally undermine any sort of credibility the European Central Bank has. An article in the Financial Times states that there are only three possible ways of solving the crisis, “(1) reducing the deficit from 13 per cent to 3 per cent of gross domestic product within just three years, (2) outright default on all or part of the Greek government’s debt, or (3) some kind of bail-out led by Berlin.” None of these options would go well. Because of how globalized the world economy is, anything that happens in Europe will effect us here in America, likewise anything that happens in Asia will effect us here in America.
As a banking chief of the Paris-based, S ociete Generale stated, “Collapse of the euro is inevitable.” He added that, “Any “help” given to Greece merely delays the inevitable break-up of the eurozone.” This is the same bank that was advising its clients to be ready for a possible “global economic collapse” over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.
What’s even more troubling is that the Greece crisis has also exposed other member states of the European Union to their own problems as well. The so-called PIGS; Portugal, Italy, Greece, and Spain are in danger of defaulting on their sovereign debt obligations. All this is further undermining the credibility of the Euro currency and the euro-zone as a whole.
There’s really no place in the world that is safe from the financial crisis, not even the world’s biggest economy, the United States. As stated in the Financial Times, “The worse things get in the eurozone, the more the US dollar rallies as nervous investors park their cash in the “safe haven” of American government debt.”
What’s even scarier to hear is that “according to the White House’s new budget projections, the gross federal debt will exceed 100 per cent of GDP in just two years’ time.” It goes on to say that the US will NEVER again run on a balanced budget. This goes without mentioning on how the Chinese own most of the America’s debt and are sharply reducing the buying of American treasuries.
References:
Article by Alex Elkan
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