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Analysts: New Era Of Chaos Has Taken Hold
Banking collapse has already happened; Crisis is worst
ever; Financial system has effectively disintegrated;
Mass social insurrection likely
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A wave of economists, investors and other financial experts
issued a series of dire warnings concerning the global financial
crisis over the weekend, stating that a new era of chaos has
taken hold all over the globe.
Some asserted that a total banking collapse has
already occurred, while others said that the downturn is now
the worst on record, far outstripping the great depression.
Hedge fund manager and billionaire philanthropist
George
Soros said the financial system has effectively
disintegrated, with the turbulence more severe than during the
great depression and with the decline comparable to the fall
of the Soviet Union.
Former chairman of the Federal Reserve Paul
Volcker said he could not remember any time, even
in the great depression, when things went down so fast and quite
so uniformly around the world.
Financial market analyst Martin
D. Weiss has stated that the banking collapse has
already occurred and a major Wall Street meltdown is now imminent.
Leading forecasters, The
National Association for Business Economics, have
warned that the recession is projected to worsen and unemployment
could hit 9% this year, 10% percent next year and continue to
rise into 2011. In 2008, the jobless rate averaged 5.8 percent,
the highest since 2003.
Financial professors Carmen Reinhart of the University of Maryland
and Kenneth Rogoff of Harvard University have said that the
crisis is
"as bad as they come", warning that if
the averages of previous crises hold, Americans can expect unemployment
to reach 11 or 12 percent, housing prices nationally to drop
36 percent, stocks to lose more than half their value, and real
output per capita to plunge 9.3 percent.
New York University economist Nouriel
Roubini has predicted a lost decade of Japanese-style
stagnation (a deadly combination of stagnation, recession and
deflation) but on a worldwide basis.
"The global economy is now literally in free fall as the
contraction of consumption, capital spending, residential investment,
production, employment, exports and imports is accelerating
rather than decelerating," Roubini
wrote.
(Article continues below)
Though the Obama administration has denied it
plans to nationalize swathes of U.S. banks, speculators have
asserted
it is already happening, and will continue if Obama
converts the government’s preferred shares in Citigroup
Inc. into common equity to help the firm withstand losses. The
Treasury has also announced
that it is ready to throw even more money at the banks, in addition
to the trillions in taxpayer dollars that have already disappeared.
While some economists have resigned themselves
to accepting this as "the only way out", CNBC's
Jim Cramer has warned that nationalization would
crush America and plunge the financial system into "a world
of chaos" which throughout history has led to "deep
down insurrection and social unrest".
Similar reports and analyses have recently predicted
that the world
is on the brink of severe social unrest due to
the financial crisis. The weekend saw protests reach
boiling point in Ireland, Governments in Iceland
and Latvia have already been toppled, while police in the UK
are preparing for a “summer
of rage” and mass protests against the mishandling
of the economic crisis by the government.
An
increase in urban warfare training drills throughout
the U.S. does not bode well in the light of such reports, particularly
given that Northcom
has highlighted that active duty troops inside
the U.S. will be designated to deal with “civil unrest
and crowd control”.
Of course, out of this chaos, as we have consistently
warned for over a decade, is being presented a new order. Today
British Prime Minister Gordon Brown called for a "global
New Deal" which would see a government "clampdown"
on all financial markets including hedge funds.
Essentially this would be the final nail in the
coffin of the free market, and would usher in a new period of
global government regulation of the financial system.
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