The magnitude of current private and government debt, coupled with massive unfunded contingent liabilities for promises of future services to their citizens, will prove to be impossible for many nations to fund. Massive inflation in the money supply will become the preferred vehicle to deflect the default monster and will result in vastly devalued currencies and price inflation as a prelude to default. Such action will be a desperate attempt to buy time to stave off the inevitable and will result in social unrest caused by persons whose comfortable lifestyle and elevated standard of living is about to disintegrate before their very eyes. more
The U.S. military is reviewing options for a unilateral strike in Pakistan in the event that a successful attack on American soil is traced to the country's tribal areas, according to senior military officials. more
U.S. stocks slid, capping the worst May for the Dow Jones Industrial Average since 1940, while the euro slumped and Treasuries rose as a downgrade of Spain’s debt rating and escalating tensions on the Korean peninsula triggered a flight from riskier assets. more
As we’ve discussed recently, persistent deflationary forces do not augur for a repeat of Japan circa 1990s or the US in the 1930s. Instead, because of the inability of governments to finance their current and future debt burden (there is a dearth of domestic savings and global capital), deflationary forces will ultimately lead to severe inflation or hyperinflation. In today’s missive, we explain how this will happen but in various stages. more
The global credit system is flashing the most serious warning signals in almost a year on triple fears of a Spanish banking crisis, escalating political risk in Asia, and a second leg to the US housing slump. more
The Spanish Inquisition used to burn Englishmen in Sevilla's Plaza de San Francisco when they had the chance. There must have been some nostalgia for this practice when the news hit that Fitch Ratings had stripped the country of its AAA status. more
A month ago, with the market charging ever higher, climbing the "wall of worry," most bearish voices had been silenced. Now they're back with a vengeance. more
Threats of a general strike in Spain intensified this weekend following Friday's decision by the credit agency Fitch Ratings to downgrade the country's debt from AAA to AA+. more
One of Spain’s biggest banks was this weekend negotiating a merger with five smaller rivals as part of a desperate government effort to restore confidence in the faltering economy, which threatens to drag down the rest of the eurozone. more
Israel has allegedly deployed a permanent submarine presence in the Persian Gulf to keep an eye on Iran, according to media reports published Sunday. The three German-built submarines are reportedly equipped with nuclear cruise missiles. more
The dollar's recent strength has been explained by most market analysts as a result of the euro weakness rather than any fundamental support for the greenback. In fact, a closer look at the dollar's chart - particularly the dollar index - suggests the currency may be primed for a collapse. more
Spain lost its AAA credit grade at Fitch Ratings, which said the country’s debt burden is likely to weigh on economic growth. more
THE Greek government has been advised by British economists to leave the euro and default on its €300 billion (£255 billion) debt to save its economy. more
I want to draw your attention to this article:
Credit Crisis Indicators Going Bonkers Again! Batten Down the Hatches!
Apart from everything else that is going on in the World; The Oil Crisis, The Korean Crisis, The Euro Crisis, The Greek Crisis, The Spanish downgrade etc these indicators represent the greatest threat to the world economy.
It was these same indicators that heralded the Lehman induced Credit Crisis of 2008. The World overcame the freezing of the credit markets at that time through a massive infusions of Government money.
If the Credit markets freeze again there's no more Government money to solve the problem-that's it game over.
If the credit markets freeze now it will be PERMANENT.
What can you expect, should this happen? Firstly the stock markets will shut down, then the banks will declare a holiday and you will be limited to the amount you can withdraw. The world economy and financial system will collapse in a matter of days. We will enter a new and totally alien world. It's not definate but these indicators point towards it. If they keep going up Collapse is unavoidable.
If you sense real danger get your money out of the bank and stock up on fuel and food. Watch the markets closely this week, check in at Business Insider several times a day(they're the best for up to the minute news). A full blown collapse is now a very real possibilty.
Sorry to spoil your Bank Holiday!
ukws
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