- GEAB N°75 is available! Systemic crisis 2013: with record stock exchange highs, the planet’s imminent plunge into recession!
Despite a feeling of relative calm given by both the media and the American and Japanese financial markets going from record to record, the world economy is slowing down badly and a widespread recession is looming. The various players are fully aware of it and, in the face of the challenges of an imminent collapse, countries or regions are putting various strategies in place to try and limit the consequences. Whilst some seem dictated by desperation or last chance solutions, others on the contrary bear witness to a real adaptation to the world’s current changes. And it’s no surprise that, in the first category, we find the “powers of the world before” which no longer have any real options.
Layout of the full article :
1. World recession in sight
2. The banks’ doubtful business
3. Tax haven all hell
4. Neo-protectionism between regional blocs
5. Emerging nations’ strategy in gold
6. The Fed’s last bullets
7. Euroland : national unity governments and the ECB to the rescue
8. High risk strategies
This public announcement contains chapters 1, 2 and 5.
World recession in sight
In fact several signals show that a reversal in the economic situation is imminent. Indeed the term “reversal” isn’t very fitting since the real economy has never really recovered from the 2008 shock: it is, therefore, rather a worsening which we will see.
There is no shortage of indices for that. Europe is already in recession. Exports from China, often considered “the workshop of the world”, are falling heavily (see chart below) and the benchmark signals are contracting or slowing down dangerously (1) with, additionally, a major credit bubble (2).
Australia, which gives a good indication of the world economy’s health due to its exposure to raw materials, is struggling (3). Consumers are also marking time. US wholesale (4) and retail sales are on the decline.
The majority of US benchmark indices are swinging into the red, for example the Chicago PMI index (5), as well as the Goldman Sachs global index (see chart below).
In short, a world recession is on the horizon (6). To protect themselves from its impact, the different players, beginning with the banks, use different strategies which we will now analyse.
The bank’s doubtful businessIt goes without saying that the financial sector is hardly a model of transparency. But with JP Morgan or Bank of America which “miraculously” succeeded in not having a single day of first quarter trading losses (7), or further, JP Morgan’s gold reserves which have mysteriously emptied (8) whereas by a strange coincidence we saw a crash in the gold price in mid-April, without even mentioning the variety of manipulations effected by the top-tier banks, first and foremost JP Morgan (9) and others as well (10); these shady operations going increasingly unnoticed.
Nevertheless, all the banks know that a new storm is on the horizon and are using all the means at their disposal (more or less legal) to shelter themselves, and anything goes, including between the banks themselves. It’s in this light that it’s necessary to look at the various banks’ amazing first quarter balance sheets making it possible to draw in investors, or at least to defer the debacle, or the mid-April crash in the gold price clearly caused by one or more of these financial institutions.
These rough battles in the middle of a full economic upheaval will leave their mark and the weakest or most affected banks will not come through the storm undamaged, especially as the financial centres are now facing a new adversary, countries themselves.