The
Financial Collapse—What Will Happen Next?
by
Bruce Porteous
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THE FINANCIAL COLLAPSE – WHAT WILL
HAPPEN NEXT? Many are surprised
at the speed of events occurring with the current global economic
collapse. Yet few appear to be aware
of what is still to follow as events unfold in the days that lie ahead. For some years I have been writing about
this economic collapse, and now will explain the events that will unfold over
the coming weeks. The
present crisis is not just an economic crisis – it is a political crisis
also. What is unfolding now is a going
to result in the end of the Anglo-Saxon dominance of the global economy,
along with the collapse of their economies and military capacity. We are experiencing some of the most
dramatic and historic events in the history of mankind. The political
landscape of the world we live is being significantly changed. Here
is a brief summary of the events to unfold. 1.
The
Anglo-Saxon financial institutions will continue to haemorrhage as investors
withdraw their funds and no longer refinance loans as they fall due. Many of the investors are foreigners who
have lost confidence in investing in the Anglo-Saxon banking system. 2.
The fall-out is impacting the European Union
economies, resulting political and economic changes is how the way the EU is
govern[ed]. 3.
There will be a lack of confidence by the
Asian countries in reinvesting in the Anglo-Saxon nations – the withdrawal of
their capital will result in the collapse of the US dollar, British pound and
other currencies depended on the carry trade, followed by national
bankruptcy. 4.
While Asia and European economies will
survive and once-again prosper, the Anglo-Saxon nations will collapse into
deep depression, poverty and social disintegration. 5.
A new economic model will emerge, where the
State replaces the private sector, exercising control over the population in
how commercial activity is conducted. Central
banks over the last couple of weeks around the world have been increasing the
money supply to prop up a collapsing banking system. In simple terms, this has meant creating
money to advance to banks to ensure that they have funds to pay depositors
and to provide additional funds to ensure banks will continue lending. The
recent $US700 billion bailout in the USA means that the banks will be repaid
by the government for their bad loans, with the hope that they will continue
loaning once again to debt-laden consumers to entice them to purchase more
goods that they really don’t need in an effort to stimulate consumer
spending. Yet banks are having trouble
to find credit-worthy customers to lend to, or do not have the funds to lend
at all as depositors withdraw their savings. The
expansion of credit through the global banking system on the scale of the
last few weeks has been a risky gamble yet has failed to restore confidence
in the global equity markets, and which in turn is further weakening the
banking system as depreciating assets destroy their balance sheets. The
Anglo-Saxon nations are depending on their foreign creditors rolling over
their loans they have advanced through the international banking system or by
purchasing Government Bonds. Their creditors have been seduced into lending
to them through complex financial products and high interest rates. The
English speaking world need the inflow of capital to finance their current
account deficits and maintain domestic liquidity. Without the inflow of foreign capital their
currencies risk collapsing, drying up liquidity and economic activity in
their markets. Countries such as the
UK, USA, Australia and New Zealand now face national bankruptcy. They will not be able to sustain economic
activity to generate the foreign exchange to enable them to repay their
enormous debts to their foreign creditors. Many
have compared the current crisis to that of the depression of the
thirties. However there are some
significant differences. The problems
that prolonged the depression of the thirties were from a lack of liquidity
in the markets. This time, Central
Banks have flooded the markets with money to prop up the banking system and
in a vain effort to stimulate economic growth. This is eventually going to be
disastrousness. Printing money in a
desperate effort to solve the current economic crisis will only make the
situation worse. The market was
already flooded with money on a market that lacked confidence and has
declining productive output. The
outcome will be a lack of confidence in fiat money and a flight to gold or
currencies that are perceived as being safe. At
present the flow of money between banks has slowed because of a lack of
confidence. Yet this is not the real
problem. The current situation has
been bought about as a result of continuing expanding the money supply in the
Anglo-Saxon economies while maintaining large current account deficits. This has resulted in their banking systems
being dependent on an inflow of capital from countries operating with current
account surpluses, especially China and Japan. Printing money to finance payment of
imports, dividends on investments and interest payments cannot be sustained
indefinitely. The current crunch has
come at a time when there has been a slow-down in the global economy, partly
due to the collapse of an over-heated housing market in the West, making it
more difficult for the indebted Anglo-Saxon nations to service their debts. We
are now seeing a dramatic shift of wealth from the Anglo-Saxon nations to
Asia. Though the US dollar has
recently appreciated against the Euro, this will only be for a short time as
the world becomes flooded with unwanted dollars. The collapse of the US dollar and British
pound will also drag down those currencies that have been supported by the
carry trade that is dependent on the inflow of overseas capital to sustain
their economic activity. The
current crisis will have enormous global politically repercussions. It will see the end of the ascendency of
the western democracies. People will
be willing to accept authoritarian forms of government out of economic
necessity. Europe will experience the
biggest political change. The current
crisis has shown the inability of divided leadership in Europe to react to a
crisis on the magnitude that has happened over the last couple of weeks. This crisis will bring together the EU
nations under a single leader and [Global] political system. The
acceptance of a single [Global] EU leader with the power to take control of
restoring prosperity to the European economies will result in the State
taking a much greater role in how economies are managed. Already we are seeing Governments taking
over failed banks, and legislation is rapidly being passed to give the State
the authority to direct investment and control the banking system. Once this confidence is restored the Euro
will quickly replace the US dollar as the international currency to finance
globally trade. As currencies
collapse, the Euro will be accepted as an alternative currency, so if will be
widely accepted around the world as the money of choice. This will enable the EU to have great
economic and political influence around the globe. We
will shortly see the collapse of the economies and currencies of the USA,
Canada, UK, Ireland, Australia and New Zealand. The speed of this collapse is catching many
by surprise. It will happen once their
overseas investors withdraw confidence in their economies and withdraw their
capital. Without being able to roll over their loans there will be a collapse
of their currencies and defaulting on their international debt
obligations. They will be blamed for
the economic crisis that has engulfed the globe, bringing the hatred of the
whole world against them. It
will result in the Anglo-Saxon nations sinking into poverty; their people
face starvation, disease, famine, and abject poverty. Their people will suffer greatly, as their
societies sink into anarchy, as law and order breaks down, and society
collapses. Their nations will be taken
over by their creditors as they try and recover their debts, and their people
put into slavery. It will be a time of
great suffering and tribulation to its people. One
consequences of this calamity is that religious freedom as we have known it
will be greatly curtailed, as the State imposes its will upon those subject
to it. How
have the Anglo-Saxon nations got themselves into such a mess, when they were
the most powerful economic and military powers on earth? The current situation is a direct result of
rejecting the economic and moral laws God has given our nations to ensure
that we have a society of equity, and prosperity, rather than what we have
today – a society that is based on greed, pursuit of the self, pleasure and rejection of moral and religious
values. It is a society bent on
self-destruction, but few realize the consequences of such actions. Over
the coming weeks I will write as events quickly unfold as we sink into the
darkness of economic abyss. Bruce
Porteous bruceport@xtra.co.nz 10
October, 2008 |
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