Overdue doom explained
The post 2009 clean up has never been dully finalized. Instead we been drowning in asset bubbles, in enormous sizes such as the student loans of US or the Chinese construction mania. Other smaller notable contenders are the UK housing craze fueled by the governments fetish with raising house prices through schemes with positive happy names such as “Help to buy”.
The truth however is that these misguided government policies are extreme in similarity to the sub-prime mortgage crash that brought the whole world down to its knees in 2008 and 2009.
Ridiculously leveraged and unsubstantiated promises of value where there is none. Today with abundance of liquidity being force fed to banks at 0% is guiding them to absurdly risky investments and derivative filled balance sheets which none understands.
Déjà vu is immense.
The pain has to come. And it surely will.
With chief financial presidents at their national banking groups leading belief of cyclical difficulties, they know only one stimuli, this being Quantitative Easing. This is of course an attempt to artificially stimulate the markets to high heavens and pretend that growth is happening, when we live in an year of record high stock buybacks.
The problem is of course not cyclical but systematic. The blind following that a fully paper money system where printing for devaluation and inflation generating purposes is seen as “normal” or “healthy” is absurd. On this basis the value of the dollar or pounds is purely based on trust. However in a case of financial distress this trust is severed. Of course some nations in the world are already preparing for the pain that is coming. Be this in the form of gold accumulation or forming systems outside of United States influence such as the BRICS formation and the inter monetary exchange system working between China and Russia.
The ultimate doom and financial re-adjustment will have a victim which will shake the world as we see it. This being the ultimate demise of the dollar as the world currency. This is very apparent with the rise of IMF and change of its role in the world as the “ultimate” lender of last resort. With their SDR as the new world currency based on a basket of worldwide currencies with a more pronounced proportion towards chinese yuan.
Of course doom will bring painful features in extreme amounts for the whole developed and developing world: high inflation, deflation, disorders, defaults or repressions. There wont be soft landings.