Global Research
Aug 3, 2011
It was 15-months ago that we projected that the second half of 2011 and onward would present many financial and economic problems, and we have not been disappointed. There was federal debt and its renewal, which we are now suffering through, municipal debt problems, the lack of any kind of solid recovery and financial problems emanating from Europe. Making the situation more difficult is the statistical exposure at Princeton University that more than $5 trillion has been spent since 9/11 to create new wars in Iraq, Afghanistan, Libya and Pakistan, with more in the works.
Running neck and neck has been the federal debt issue and the second bailout of Greece and its affect on the debt problems of five other close to insolvent nations. Perhaps with the exception of Germany the world economy is in disarray. Every major economy otherwise is in trouble in one-way or another. That means we have a very unstable international monetary system in which some sovereign nations are in desperate shape. The effects of QE1 and 2 and stimulus 1 and 2 and their equivalents have thus far proved to be futile. In spite of that most nations are about to embrace QE 3 or something akin to it, and make the same mistakes over again.
We are now approaching the autumn session in the temperate zone and we advise you to hold on tightly to your seats, because this is going to be a very bumpy ride. The political antics being displayed in regard to the US debt extension are going to cause a fall out, particularly in the US Treasury market as interest rates again to start to rise. What you have witnessed in the US Congress is not inducive to stability and recovery. In fact just the opposite is the case. If you combine US with European problems you have double trouble.
Over in Europe the Greek crisis has become a European crisis. We wonder when Europe is going to wake up to the fact that Wall Street and the City of London are attempting to destroy the euro as a viable alternative to the dollar as the world’s reserve currency. In spite of this the euro has so far held its own, as the dollar has faded against not only the USDX, but against gold and silver as well. There are those who believe that the euro and the EU have been revitalized, but we see Europe somewhat differently. The movement of more nations into the euro has not been due to stability, but to a weakening US dollar and assistance from China and Russia. The elitist powers in NYC and Washington have no intention of losing the dollar as the world reserve currency.
We said 1-1/2 years ago that the solvent countries could not handle the bailout of six nations that were on the edge of bankruptcy. If the EU-IMF-bank bailout of Greece goes as planned within 1-1/2 years Greece will not have met its commitments and the game will be on again. There is no question at that point that the solvent nations will balk, the euro will fall and perhaps even the EU. That is because the contagion will have spread to the other five troubled countries. These events will in turn trigger the debt bombs in England and the US. The interconnectivity that the elitists wanted so badly will finely be their undoing. The precursor to this is the rating downgrade we have witnessed just recently.
The world economy is slowing down and that is going to compound problems. That is why transnational conglomerates and others continue to lay off staff and hoard cash. They have an idea of what is on the way. This is why QE cannot end until forced to be ended by hyperinflation. At the same time the value of assets is wasting away, although held up in part by inflation.
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