Global Systemic Crisis Alert

The Global Europe Anticipation Bulletin has issued a strongly-worded warning about the impending demise of the US economy next summer.


Global Systemic Crisis Alert – Summer 2009:
The US government defaults on its debt.

Our researchers anticipate that, before next summer 2009, the US government will default and fail to pay back its creditors (holders of US Treasury Bonds, of Fanny May and Freddy Mac shares, etc.). Such a bankruptcy will provoke some very negative outcome for all USD-denominated asset holders. According to our team, the period that will then begin should be conducive to the setting up of a “new Dollar” to remedy the problem of default and of induced massive capital drain from the US. The process will result from the following five factors:

1) The recent upward trend of the US Dollar is a direct and temporary consequence of the collapse of stock markets.
2) Thanks to its recent “political baptism,” the Euro becomes a credible “safe haven” value and therefore provides a “crisis” alternative to the US dollar.
3) The US public debt is now swelling uncontrollably.
4) The ongoing collapse of US real economy prevents from finding an alternative solution to the country’s defaulting.

5) “Strong inflation or hyper-inflation in the US in 2009?”–that is the only question.

Studying the case of Iceland can give an idea of the upcoming stages of the crisis. This country indeed provides a good illustration of what the US and the UK should be expecting.

It is now clear that this past month will remain in the history books of the whole planet as the month when the global systemic crisis started.

As a matter of fact, September 2008 is the month when the “financial detonator” of the global systemic crisis exploded. Therefore, this crisis is far more important, in terms of impact and outcome, than the 1929 crisis. However, the 1929 experience and all its dreadful outcome is still vivid enough in our collective memories to hope, if citizens are vigilant and leaders clear-sighted, that we will be spared from a “remake” leading to major world war(s).

The sudden shock that will result from the US defaulting in summer 2009 is partly due to this decoupling of decision-making processes of the world’s largest economies with regard to the US. It is predictable and can be dampened if global players start to anticipate it. LEAP/E2020 hopes that the September shock has “educated” the world’s political, economic and financial policy-makers and made them understand that it is easier to act by anticipation than in a panic. It would be a pity if Euroland, Asia and oil-producing countries, as well as US citizens of course, discover one morning of summer 2009 that, after a long-week-end or bank-holiday in the US, their US T-Bonds and Dollars are only worth 10 percent of their value because a “new Dollar” has just been imposed.

◊◊◊◊ Now: Gold @ $801.80, Silver @ $10.09, USDX @ 83.05 ◊◊◊◊
◊◊◊◊ Now: DJIA 9,265.43


One Response

  1. […] about the impending demise of the US economy next summer, including the death of the dollar. [read more] Possibly related posts: (automatically generated)Why is the dollar rallying?The Tale of Two […]

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