Home Les bulletins GEAB Global systemic crisis – Phase II: Only a few weeks left to avoid the worse…

Global systemic crisis – Phase II: Only a few weeks left to avoid the worse…

On May 15, 2006, in GEAB N°5, LEAP/E2020 announced that phase II of the global systemic crisis – the so called « acceleration phase » – would start in June 2006 and that it would be characterised by a general awareness of the existence of such a global systemic crisis. The strong and ongoing fall of all stock exchange indicators all over the planet in the past weeks clearly indicates the start of this acceleration phase of the crisis, a fact which has now become obvious to all economical and financial players. These players are now seeing their past reference points fading and their certitudes being smashed to pieces. The relative value of the loans throughout the world is being disrupted and, for a great number of them, long term depreciation is starting.

Our team had the occasion to tell participants at the March 2006 LEAP/E2020 conference-dinner,  that large world stock exchanges (New York, London, Tokyo, Frankfurt, Paris,…) would be affected only at a time when the world economic and financial system would be unable to prevent such a situation. Indeed, these large stock exchanges are the financial equivalent of the “standard bearers” in armies of the past. It was primordial for the banner not to fall otherwise the whole army would scatter. It was thus protected at any cost for its fall meant the defeat.

For our team, the start of phase II, the so called “acceleration phase” embodied in the collapse of all stock market indicators of the planet, and in particular those of the main stock exchanges, means that leaders of the world economic and international  financial system (central bankers, G8 Ministers for Finance, the IMF.) are carrying on a flight forward strategy, pretending to validate situations that they actually do not control, and that they had not anticipated at all. Obviously this situation is extremely worrying since it prevents any assumption that these same leaders will be able to bring innovative, daring and effective solutions to this first major global crisis.

Their first concern should be on the one hand to understand that this is a long term crisis which is at its early start, and on the other hand to rapidly evaluate the “multiple damage” caused by the fall of the world’s stock exchanges. In the next few weeks, we will observe the bankruptcies of many companies, speculative funds and associated pension funds, and finance firms. By then, it will be too late to act and prevent a wild development of the crisis. Today, and in the month to come, one might still anticipate the consequences and attempt to channel the crisis within the financial and economic sphere in order to try to prevent it from turning into a social and military crisis…

Read more in the GEAB No 6 / 16.06.2006

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