Global Systemic Crisis / September 2008 - Phase of Collapse of US Real Economy
GEAB N°22 is available!
Global systemic crisis / September 2008 - Phase of collapse of US real economy
Public announcement GEAB N°22 (February 16, 2008)
According to LEAP/E2020, the end of the third quarter of 2008 will be marked
by a new tipping point in the unfolding of the global systemic crisis. At
that time indeed, the cumulated impact of the various sequences of the crisis
(see table below) will reach its maximum strength and affect decisively the
very heart of the systems concerned, on the frontline of which the United
States, epicentre of the current crisis. In the United States, this new tipping
point will translate into a collapse of the real economy, final socio-economic
stage of the serial bursting of the housing and financial bubbles (1) and
of the pursuance of the US dollar fall. The collapse of US real economy means
the virtual freeze of the American economic machinery: private and public
bankruptcies in large numbers, companies and public services closing down
massively (2),...
A revealing harbinger: from March 2008 onward, the US government will stop a service publishing its economic indicators due to budget restrictions (3). Those who read the GEAB N°2 (02/2006) and included Alert certainly keep in mind our anticipation which connected the upcoming fall of the US dollar with the US Fed's decision to cease publishing the M3 indicator. This new decision is another clear sign that US leaders are now anticipating a very bleak economic outlook for their country.
Time perspective of the
seven sequences of the impact phase of the global systemic crisis as anticipated
since mid-2007
- Source LEAP/E2020, GEAB N°18
(10/2007)
In this 22nd issue of the GEAB, LEAP/E2020's experts try in particular to anticipate
very specifically what will come out of the collapse of the US real economy
for the United States themselves and for the other regions of the world. Meanwhile
our team presents five sets of strategic and operational recommendations helping
to protect oneself from the upcoming deterioration of the global systemic crisis.
On the occasion of the second anniversary of the publication of our famous “Global systemic crisis Alert” which toured the world in February 2006 (4), LEAP/E2020 wishes to remind that we are now resolutely stepping into an era with no historical precedent. Our researchers insisted on that many times in the last two years: any comparison with the previous crises of our modern economy would be fallacious. It is neither a “remake” of the 1929 crisis nor a repetition of the 1970s oil crises or 1987 stock market crisis. It is truly a global systemic crisis, that is to say a crisis affecting the entire planet and questioning the very foundations of the international system upon which the world was organised in the last decades.
According to LEAP/E2020, it is also instructive to observe that, two years after the release of this « Alert » which at the time generated both the interest of millions of readers worldwide and the condescending irony of most « experts » and « managers » of the economic and financial spheres, everyone is now convinced that a crisis is truly happening, that it is really global, and for most people already that it could indeed be systemic. However, it is always a repeated astonishment for our team to see the degree of incapacity of these same experts and managers in understanding the specific nature of the phenomenon currently unfolding. According to them, this crisis would only be a usual crisis but bigger. As a matter of fact that's how the financial media reflect the dominant interpretations of the ongoing crisis. According to our team, this approach is not only intellectually lazy (5), it is also morally guilty, because it has for a main consequence to prevent their readers (whether they are simple citizens, private investors or public or private organisation managers) from preparing for the upcoming shocks (6).
For this reason, in opposition to all what can be read in the mainstream media always eager to conceal the truth and serve the interests of those who rule them, LEAP/E2020 wishes to remind that it is first and foremost in the United States that the systemic crisis is taking an unprecedented shape (the « Very Great US Depression » as our team decided to call it in January 2007 (7)) because it is around this country, and this country alone, that the world got progressively organised after the second World War. The various issues of the GEAB extensively described this situation. In short, it appears to be useful to make clear that neither Europe nor Asia have a negative saving rate, a full-scale housing crisis throwing millions of citizens out of their homes, a free-falling currency, abysmal public and trade deficits, an economic recession and, on top of all this, a number of costly wars to finance.
Neither Asia nor Europe (or more precisely ‘nor the Eurozone') will suffer the roughest, the most sustainable and the most negative impact of the ongoing crisis; but the United States will, as well as all the countries/economies strongly linked to the US (what our experts have decided to call “the American risk”) (8). A “decoupling” is indeed taking place between the US economy and the other large regions of the world. But “decoupling” does not mean “independence” and it is clear that, as anticipated by LEAP/E2020 for many months, Asia and Europe will be affected by the crisis. But « decoupling » entails that the evolution of the US economy and of the other large regions of the world are no longer synchronised, that Asia and Europe are now moving along courses no longer determined by the US economy.
The global systemic crisis is in fact the beginning of an economic « decoupling » between the US and the rest of the world, knowing that the non « decoupled » economies will be dragged down the US negative spiral.
US Self-Employment in a Steep Downturn - Source Bureau of Labor Statistics
/ Merril Lynch (shaded region represents period of US recession)
The cases of the housing (2006) and financial (2007) bubble-bursting are
eloquent. Indeed, the large majority of operators (non-specialised in the
concerned sector)
discovered that « the party was over » a long time after the trend
had reversed. During the entire reversal period (which usually lasts between
6 to 12 months at most), dominant stances kept repeating them that nothing
was changing and that emerging worries had no reason to be; and later, that
the problems would remain confined to the sector concerned and to the US only.
All those who, in the US and elsewhere, listened to these arguments are bitterly
regretful now that they are stuck with unmarketable houses (or about to be
foreclosed) or now that they see the value of their assets crumble day after
day (9).
Concerning stock markets, our team has anticipated since October 2007 that international stocks would plummet by 20 to 60 percent according to the region in the course of the year 2008. Today, we must re-evaluate our anticipations as we estimate that losses will be even greater than that. Indeed, on the one hand, stock markets have already lost between 10 and 20 percent since the beginning of the year (10), and, on the other hand, the collapse of the real economy in the US by the end of Summer 2008 will drag down all stock markets. According to LEAP/E2020, international stock markets will probably drop by 50 percent in average compared to 2007 (including in the emerging countries) (11).
This sort of re-evaluation is typical of the work of anticipation carried by LEAP/E2020. Month after month we try to distinguish which trends are growing and which are relenting in order to improve the accuracy of our evaluations. We do not strive to “be right” (12), not to “sell” or “promote” anything. We seek simply and without prejudice to describe in advance the consequences of the heavy trends at play in this 21st-century world, and to share with our readers what we think are the proper means to protect oneself from the most negative effects.
In this 22nd issue of the Global Europe Anticipation Bulletin, with the alert we sound about a collapse of US real economy from September 2008 onward, we are trying again to warn those concerned that this major event will generate many very severe socio-political troubles in the United States (13) whose economy is truly on a tumbling course (14), a situation extremely likely to entail very heavy consequences for the financial and monetary markets, and for the world's economy. We have not yet reached the heart of the crisis. According to LEAP/E2020, we will be there in the second semester of 2008.
Notes:
(1) A very instructive film was recently nominated at the Sundance Film Festival: I.O.U.S.A., directed by Patrick Creadon. As it follows the journey of David Walker, US Comptroller General (and therefore responsible for controlling federal public spending), during a series of conferences on the state of public expenditures throughout the country, this film shows the very direct impact of the current crisis on American citizens and the United States. The release of this film illustrates the fact that, in just a few months time, this crisis left the mere circles of experts and boardrooms of financial institutions to enter into the daily life of the US citizens.
(2) In the past few days, the complete collapse of Municipal bonds (or « Munis ») illustrates the fact that the crisis is spreading to all the sectors of the US society. This collapse will freeze all public investment projects scheduled by local authorities in the US. It is one of the first big victims of the implosion of « bonds insurers » announced by LEAP/E2020 in the GEAB N°19. It also demonstrates the fact that large banks are now incapable of playing their role of financers of the country's economic activity. Sources: Financial Times, 02/13/2008 & Bloomberg, 02/14/2008
(3) Source: EconomicIndicators.Gov, Economics & Statistics Administration, US Department of Commerce
(4) See GEAB N°2, 02/15/2006
(5) The first reason that may prevent those « experts » to conceive the « unconceivable », is not a matter of intelligence but a « commercial » problem. Indeed it would compel them to review most of their intellectual principles (their work hypotheses) and their business base (their « clients » would not appreciate to learn that they were on the wrong track all these years).
(6) On this subject, it is worth noticing the very straightforward speech made by the head of the Bank of England, Mervyn King, who recently warned his fellow citizens that the current crisis would downgrade significantly their living standards. Unfortunately, no US leader, including among the Democrats, is able to produce such a speech, knowing that their fellow citizens are hit even harder than the British. Source: The Telegraph, 02/14/2008.
(7) See GEAB N°11, 01/15/2007.
(8) In this 22nd issue of the GEAB, the LEAP/E2020 team gives a set of recommendations helping investors to assess themselves the « American risk » of a country, sector or investment.
(9) The same goes for all those who chose to listen to similar arguments telling them, along the years 2006 and 2007, that it was impossible for the EURUSD exchange rate to go above 1.30, then 1.40, and now 1.50… while waiting 1.70 at the end of the year 2008.
(10) Only « dream merchants » can still imagine that stock markets could improve by the end of the year, while the crisis is speeding up.
(11) It is worth reminding that in January 2008, in just a month, global stock markets saw USD 5,200 billion-worth go up in smoke. Source: China Daily News, 02/10/2008
(12) Even if our anticipations undeniably proved to be right in the past two years concerning the global systemic crisis.
(13) See ‘Sequence 6 : 2nd quarter 2007 4th quarter 2009 : « Very Great Depression » in the US, social unrest and growing influence of the army on public management, GEAB N°18, 10/15/2007
(14) Predictions about the failure of dozens of US banks in the coming two years illustrate the scope of upcoming difficulties. Source: Reuters, 02/01/2008
Sent: Tuesday, March 04, 2008 9:59 PM
Subject: The Watchman -- NEWS Flash Clarification and EXTRA
Thanks to one of our readers, I now realize that perhaps the last NEWS Flash was a bit much to try and digest. It is an extremely important article, so I have gleaned a dozen vital points that you all do not want to miss from the article entitled:
GEAB N°22 is available! Global systemic crisis / September 2008 - Phase of collapse of US real economy
This article discusses an upcoming worldwide, financial, Armageddon that they believe will occur before the end of this year (beginning September 2008). By the way, this is according to schedule, because I've heard reports that the powers that be are planning to announce the new North American Union sometime between 2009 and 2010 so our whole economy will need to totally crash before that happens (i.e., the dollar has to totally crash (to bring in the Amero) and the United States needs to be reduced to the level of a 3rd world country in order to easily fit into the North American Union) -- see The Watchman, Volume 1, Issue 12, entitled,” Big Government… or the Return to the Dark Ages? Part 4 Final – The Shrinking of America for Packaging into the North American Union" (02/11/07) for more information on this subject.
Continuing, according to this article:
1. By the end of September 2008, the world will be in a total systemic crisis (a crisis of oil, water, fuel, etc., and the world economy as a whole).
2. By then, the US economy will be at a virtual standstill due to both private and public bankruptcies in large numbers (companies and public services will be massively closing down).
3. Currently, our US government issues regular reports on the state of our economy commonly known as economic indicators. However, the US government will stop a service publishing these indicators "due to budget restrictions." These economic indicators report on items such as, unemployment numbers, the Gross Domestic Product, consumer spending, consumer confidence levels, etc. According to this article, beginning in March 2008, these types of reports will no longer be available to us and that this fact is proof that we are in trouble and that US leaders know about it.
4. According to this article, what we are about to experience is something that has never happened (an historical precedent). This will be nothing like the Great Depression of 1929, the oil crises of the 1970s nor the stock market crisis of 1987. It will be much worse -- this time it will affect the entire planet.
5. The report that this article is referring to "LEAP/E2020" was released 2 yers ago, received some interest, but also some irony from most people. However everyone is now convinced that a crisis is truly happening and that it is really a global crisis.
6. The financial media is withholding the truth about this from the public and therefore, preventing people from preparing for the upcoming shocks. Therefore, this article is published to alert the people that the crisis will not just be in the United States but worldwide.
7. This article describes the situation like this: there will continue to be a full-scale housing crisis throwing millions of citizens out of their homes, the dollar will do a free fall, there will continue to be horrible public and trade deficits, there will be/is an economic recession and there will continue to be costly wars to finance.
8. The United States will suffer the roughest, the longest, and most negative impact of the ongoing crisis as well as countries/economies linked to the US. Many of the countries linked to the United States are currently breaking all ties (abandoning ship). Asia and Europe are now totally on a different course than that of the US economy.
9. The cases of the housing and financial disasters are not just confined to the housing and financial markets. They are definitely also affecting, food, clothes, water, and most other markets and they are affecting countries outside of the United States as well. The value of these assets are crumbling day after day.
10. In October 2007, the team responsible for this article thought the international stocks would drop by 20 to 60 percent according to region during 2008. Today, they have re-evaluated their anticipations and estimate that the loses will be even greater than that -- especially since the stock markets have already lost between 10 and 20 percent and this is only March.
11. This article is trying "again" to warn those concerned that this major event will generate many very servere troubles (both socially and politically) within the United States where everything is quickly heading south. They expect very heavy consequences for the financial and monetary markets and for the world's economy in general.
12. According to them, we have not yet reached the heart of the crisis. There is much, much, more to come.
This article confirms what has been said in The Watchman and much of the research I have done that there is zero time left. Brothers and Sisters, September is only 6 months away. May the Lord have mercy on us.
In sincerely, hope this helps.
God Bless,
The Editor
P. S.
NEWS Flash Extra...
So considering all of what is going on (including today's Presidential primaries in Ohio, Rhode Island and Texas), it's obviously time again for the government to add a little more pressure to an already dire situation. Apparently, there is not enough Fear in the Fear, Uncertainty, and Doubt equation (the F.U.D. Factor is definitely at work here).
Here's the latest...
Government warns of terror threat to trains
Posted on Tuesday, March 04, 2008 2:08 PM PT
Filed Under: Terrorism
By Jim Popkin, NBC News Senior Investigative Producer
In a bulletin released Friday to U.S. law enforcement officials, the Transportation Security Administration (TSA) is warning of “continued strong terrorist interest” in targeting mass transit systems in the U.S. The 10-page threat assessment, labeled “Unclassified/For Official Use Only” and obtained by NBC News, cautions that the “U.S. mass transit and passenger rail systems are vulnerable to terrorist attacks because they are accessible to large numbers of the public and are notoriously difficult to secure.” Previous rail attacks in Madrid, London and Mumbai “could inspire terrorists to conduct similar attacks in the United States,” the report adds.
However, the authors of the intelligence analysis make clear that there are no known, immediate dangers. “At this time, there is no credible intelligence regarding specific plans by any extremist groups or individuals to perpetrate an act of terrorism against the U.S. mass transit system,” they write.
"Mass Transit System
Threat Assessment"
The report is titled the “Mass Transit System Threat Assessment” and
was prepared by TSA’s Office of Intelligence. It comes just weeks after
Amtrak announced a series of new security measures. Amtrak does not routinely
screen passengers or their baggage with metal detectors or other devices, as
all U.S. airlines do. Instead, it announced on Feb. 19 that it would use so-called
Mobile Security Teams to randomly check passengers and baggage.
The report identifies Al-Qaida as one of the “most likely actors” in potential attacks. “Al-Qa’ida and affiliated extremists pose the greatest threat to the U.S. mass transit and passenger rail system,” it states. “The threat to heavy and commuter rail in the Homeland is greater than the threat to buses and light rail. Attacks on buses overseas tend to be small-scale and are carried out mainly by smaller separatist groups within their own countries.” Other terror groups are a threat, too. “Lebanese Hezbollah, which has supporters inside the United States, is less likely to attack U.S. domestic interests unless it perceives the United States has become a direct threat to its leadership, its armed capabilities, or to Iran,” the TSA authors write.
The threat from industry insiders:
TSA worries that rail-industry insiders might become terrorist accomplices: “The
insider poses a significant threat to transportation security. Intelligence
indicates the desire of terrorist groups such as al-Qaida to use individuals
with insider knowledge of transportation sectors to help facilitate an attack
against the United States,” the report states.
It cites two examples:
--“Asmin Amin Tariq, a security guard at Heathrow International Airport
(LHR), was one of 24 people arrested in connection with the plan to blow up
aircraft in the 2006 UK-U.S. transatlantic plot. Tariq helped Islamic extremists
pose as airport employees so they could conduct surveillance of security procedures
at Heathrow. Tariq allegedly provided information about airport security procedures
to the would-be bombers,” the TSA writes.
--“Turkish citizen Adem Yilmaz, reportedly a member of the Islamic Jihad Union cell targeting Germany, was arrested in September 2007. Yilmaz was employed in the security division of rail operator Deutsche Bahn from 1997 until 2002. During that time he worked in the railway station of Frankfurt airport. The airport was one of several targets his cell that allegedly considered,” it adds.
Homemade explosives:
The TSA is concerned about the use of low-cost homemade explosives, and even
an exotic chemical bomb called the “Mubtakar.” “Multiple
improvised explosive devices (IEDs) and improvised incendiary devices (IIDs)
are the most common means of attacking mass transit targets. Although homemade
explosives are more likely to be used, chemical and biological attacks are
also possible agents for terrorism,” the report says.
“Al-Qaida is reportedly interested in producing compact chemical dispersal devices. The group developed a small device called a mubtakar for disseminating cyanogen chloride and hydrogen cyanide. The device is considered efficient in enclosed spaces and could be effective if used in subway cars and underground rail stations,” the TSA analysts conclude.
Reference: http://deepbackground.msnbc.msn.com/archive/2008/03/04/729103.aspx
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