Last May, in the Global Europe Anticipation Bulletin N°5, LEAP/E2020 had detailed the four phases of the global systemic crisis, indicating that the phase known as of acceleration would start in June and would be spread out over a period of a maximum six months at which stage, the explosive phase of the crisis, the “impact phase”, would start.
Following these last months developments and the central part played by the United States in the current global system, LEAP/E2020 announces that the phase of impact will begin in November 2006 and that this phase’s catalyst will be the mid-term elections of the United States Congress which is the cross point of the main fracture lines of the current global system.
The phase of acceleration consisted of the generalized realization that the global system that we have been familiar with for several decades is changing radically and permanently as the following, now largely recognized, trends for the whole planet illustrate: aggravation of the nuclear crises with North Korea and Iran, general lack of power of the United States on all major crises of these last months, including the Israeli-Palestinian conflict, civil war in Iraq and American stagnation up until at least 2010, growing feeling of the defeat of the West to progress in Afghanistan, collapse of the United States real estate market, increasing volatility of the “hedge funds” system, starting recession of the US economy, aggravation of trade deficits and American payments, on-going weakening of the Dollar, increasing debt of American households.
The phase of impact which succeeds the phase of acceleration constitutes a period when a series of brutal crises starts affecting by contamination the total system. This explosive phase of the crisis, which will last six months to one year, will affect directly and very strongly financial players and markets, the owners of investment schemes with fixed incomes in dollars, pension’s funds and the strategic relations between the United States on the one side, and Europe and Asia on the other.
According to our analyses, its impact will be much stronger in the financial sector than our forecasts of the first half of 2006 suggested, because the mobilization of this sector in the United States (together with its communication relays) in order to preserve the control of the Republican Party in the American Congress, led to “euphorise” the American public opinion and the immense majority of the players in this sector, enabling the leaders of this party to claim a good economic assessment (the only campaign topic at their disposal since summer 2006). The using of this side of the global system for electoral ends thus prevented the majority of the players from correctly anticipating the ruptures to come and as such will considerably increase the explosive potential of the impact phase in this sector, since the operators will be caught “on the wrong foot”…
Read more in the GEAB No 8 / 16.10.2006