Friday , 28 October 2016

Total Reset of World Economy and Financial & Political Systems Unfolding – Here’s Why

The Great Financial Crisis of 2007-9 is now transcending into the Great Financial Catastrophe which could very well involve a total reset – or more likely a collapse – of the world economy, financial system and world political system. Here’s why.

The above comments, and those below, have been edited by Lorimer Wilson, editor of (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (see sample here – register here) for the sake of clarity ([ ]) and brevity (…) to provide a fast and easy read. The contents of this post have been excerpted from an article* by Egon von Greyerz ( originally entitled  The Great Financial Catastrophe ‏ and which can be read in its unabridged format HERE. (This paragraph must be included in any article re-posting to avoid copyright infringement.)

The total reset – collapse – won’t be orderly. It is likely to take a very long time and will involve bankruptcies of  major parts of the financial system as well as many major nations. It will also lead to:

  • social unrest,
  • escalation of wars,
  • major poverty,
  • famine and
  • the world population going down significantly.

I realise that this forecast sounds very alarmist and like an impossible doomsday scenario. I sincerely hope I will be totally wrong. Sadly, though, the risk that I will be right, or at least partly right, is major after 100 years of excesses in the world built on no solid foundation but an ocean of debt and printed money. Nobel Prize winners in economics, central bankers and ordinary people will learn the hard way that worthless pieces of paper that they call money cannot create real lasting wealth.

Most people are blissfully ignorant of the fact that 2007-8 was just a mild rehearsal of what we soon are going to experience. The additional $60 trillion in credit and printed money since then and the lowering of interest rates to zero have given the world the impression that all is now well again but let me be very clear, nothing is well.

In the 8 years since the start of the Great Financial Crisis the bubble economy has…spread to the world’s second largest economy – China.  China has had exponential growth in debt from $2 trillion to $28T this century. A major part of this debt has financed white elephant projects and ghost cities. It would be surprising if the total Chinese bad debts were below $10 trillion before all of this is finished.

The bubble contagion has also totally infected most emerging markets. With massive growth in debts, a stronger dollar and collapsing commodity prices, almost every emerging economy is now starring into the abyss. As Michael Snyder of the Economic Collapse Blog recently pointed out, 23 stock markets around the world are now crashing. Of the 23, there are 22 emerging economies and the 23rd is Greece which definitively is not emerging but sinking into the Mediterranean.

The contagion will not just affect EMs. It is already spreading to the West and this autumn we will see stock market falls that will shock the world, spreading massive fear throughout the world economy.

I expect this autumn to be the beginning of the end of the 100 year old failed experiment of manipulation and repression of the financial system by bankers and central banks.

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  2. RE: “I expect this autumn to be the beginning of the end of the 100 year old failed experiment of manipulation and repression of the financial system by bankers and central banks.”

    This coming fall both the decisions about approving the Iran Nuclear Treaty and the US Presidential election will have a profound effect upon the World economy. I see this fall as a “tipping point” since should Trump run against Sanders for the Presidency of the USA, we will then see real Change, not just more of the same failed policies being promoted by professional politicians that seem out of touch with reality.

    Both have stated that they are not part of the Big Corp. “old boy network” and therefore are not beholden to them. Trump says he will make the US Military so strong that nobody will challenge the US, while Sanders track record is to say NO to War.

    Both candidates have committed to massive jobs programs in order to get the USA back to work and Trump is even touting adding a special tax on all things “NOT Made in the USA” which he feels will force foreign manufacturers to open US plants (and employ US workers).

    Compared to these two “front runners” that are each employing far different political “tactics”, the others that are running are now faced with a situation where they can no longer just smile at their staged photo ops and wave to large crowds while spouting prepared sound bites. Voters are now getting used to these two candidates talking about major issues and what they will do about them, which is far different that just repeating “i’m the best candidate”.

    Trump has enough personal money that he does not have to beg for Big Corporate support and Sanders has always run his many winning campaigns without asking for corporate support, so it is no wonder that Wall Street, the Big Banks and other Big Corp.’s are now very concerned least they not have a financial leach on whoever gets elected.

    Short of a Robert Kennedy event which completely changed the Political landscape in the mid 60’s, I think it will take one or more major World events to shift the focus of the American people away from these two candidates, in order to reestablish Bush, Clinton or any other “mainstream” candidate or either party as being credible.

    I look forward to a reluctant MSM that has to date, done its best to downplay both of these candidates (since most of MSM is owned by 6 Big Corp.’s) starting to actual cover the up-coming election instead of what they have been doing up to now, which is “covering-up/making light” these two candidates campaigns. Because both Trump and Sanders are skilled public speakers and have much to say, political debates between them and/or the rest of the candidates will be interesting to say the least, since they will be different than the staged events we have seen in the last two elections.