Saturday, November 17, 2007

Rocky Road Ahead for US Taxpayer

An object lesson for the US taxpayer is being played out in the subprime crisis fallout in the UK. The naive among us can still be found, on blogs and elsewhere, insisting that the measures being put in place by Governments and Central Banks will not cost the ordinary citizen. Developments in Britain are now showing the utter fallacy of this position.

It appears that Northern Rock, the British bank which suffered a run earlier this year in fallout from the funny money routine may saddle the UK government with "a bill in excess of £25bn" and calls are being made for the bank to be taken into public ownership. Since the latter action is unthinkable in the US, the alternative is easy enough to figure out.

"But now plans to sell the bank are running into a wall of opposition from politicians who are outraged that a sale could involve an open-ended commitment to provide government support to a buyer. 'Why should taxpayers' money be used to help Richard Branson, or whoever eventually acquires Northern Rock?' asked Vince Cable, shadow chancellor for the Liberal Democrats [a UK political Party]."

An insight into prospects for the easing up of credit pipelines worldwide can be gleaned from the comments of a City [of London] analyst: "No one will touch Northern Rock unless the Treasury continues to stand behind it; on its own, the Rock is not viable." Substitute the names of certain major US institutions and there you have it.

The full article is available at the Guardian website.

Sunday, November 11, 2007

Global Systemic Crisis - GEAB Update

The Global European Anticipation Bulletin No.18, Seven sequences of the impact phase of the global systemic crisis (2007-2009), is now available. This publication offers possibly the finest analysis of the big picture of the economic crisis to be found. Although a subscription item, there's an intriguing extract available without charge.

Here is the full scope of the current issue:

This public announcement provides the full description of the first sequence in addition to the complete list of sequences.
  • Sequence 1 - US debts infect the financial planet: A century after the « Russian loans”, meet the “American debts”!
  • Sequence 2 - Stock market collapse, in Asia and the US mainly: between - 60% and -30% in two years according to the regions
  • Sequence 3 - Bursting of global housing bubbles: UK, Spain, France and emerging countries
  • Sequence 4 - Monetary storm: Volatility at the highest / USD at the lowest
  • Sequence 5 - Global economy in stagflation: Recessflation in the US, soft growth in Europe, recession
  • Sequence 6 - « Very Great Depression » in the US, social unrest and the militaries' growing influence on public affairs
  • Sequence 7 - Major acceleration in world's strategic rebuilding, attacks on Iran, Israel on the brink, Mid-eastern chaos, energy crisis
The free extract is titled: Sequence 1 – US debts infect the financial planet: A century after the 'Russian loans', meet the 'American debts' (2nd quarter 2007 – 3rd quarter 2008).

As noted in a previous post, the position of GEAB is that the US is headed for a 'Very Great Depression' as an outmoded international economic order meets condition it was never designed for. Since the prognoses have shown an unusual accuracy to date it is well worth putting this site in your Bookmarks.