“Let’s recapitulate: the Fed and the Treasury continue to flood the world with $65 billion a month, but no one wants them… Where can they dump them now?” – Quote
- GEAB N°82 is available! 2014, resumption of the global systemic crisis « normal » path!
The avalanche of liquidity from the Fed’s quantitative easing in 2013, allowed the world before’s tenets to wake up: indebtedness, bubbles, globalization, financialization… But all it took was a slight slowing down in the astronomical amounts injected by the US central bank every month for the rampant crisis, buried under these piles of liquidity, to reassert itself. As anticipated, the method of “resolving” the crisis by accentuating the excesses that caused it is ineffective, causing a crisis squared instead. All the same one can find an actual benefit: time is gained which everyone uses to their best advantage.
Throughout 2014, we will once again witness the global systemic crisis’ “normal” deployment, a phase of major transition between two global organization systems, a historic crisis that goes well beyond an economic-financial crisis, which we begin to see clearly. That’s why alongside the serious dangers to the stock exchanges, banks, real estate and, more generally, the economy, the agenda also includes the expansion of people’s anger and the rejection of current political systems, the worsening of geopolitical tensions and blocs withdrawing back in on themselves.
The timing belt of this renewal of the crisis is primarily driven by tapering (the reduction of the Fed’s QE programme) which, as we know, has immediately led to the tremors in emerging currencies. Beyond the negative impact that that has on the global economy, our team anticipates that these shocks will cause a boomerang effect on the US and finally unleash the chain of events of the Dollar’s massive devaluation, destabilizing everything that remains of the old system of which it’s the cornerstone.
Layout of the full article:
1. TAPER’S MISCALCULATION
2. THE END OF THE TENETS OF THE PAST
3. BREAK THE BANK?
4. PEOPLES’ ANGER
This public announcement contains an excerpt of section 1.
A number of realities hide behind the Fed’s decision to progressively reduce its quantitative easing programme (1).
At the first is obviously it’s ineffectiveness as regards the real economy and especially the growing risks that it’s running in creating various bubbles and addictions and distorting any ability to understand reality. The second, without doubt, is the clinging to the desire to “show” that the situation is improving and that the Fed can pull out without risk. The third is less exemplary: aware of the emerging countries’ addiction to Fed liquidity created in 2013, its announcement couldn’t fail to trip them up. They now make headlines in the financial press, whilst the US situation has moved into the background. In fact, who remembers that Puerto Rico is in the process of exploding (2) (as anticipated in the GEAB n°77)? Or that Chicago can’t pay its debts (3), or that food stamps, the cornerstone of US Social Security, continue to be cut back (4) whilst an increasing number of households depend on them? Or finally that child poverty has reached levels which are difficult to imagine for a so-called developed country (5)?