Well, the global economic "meltdown"
continues apace - with no sign of a let up - even
though governments throughout the world are throwing
trillions of dollars at the problem.
Now they are talking up a "Bretton Woods II" - as
a way of reforming the global monetary system. I'm
not holding my breath though, as I don't expect
people who have no understanding of the underlying
problem to come up with a workable solution.
What we will likely get is more government control
of the global marketplace - without any measurable
improvement in affairs. In fact, it's almost dead
certain now that a global economic depression of a
very serious nature is upon us - and that current
government actions will only prolong the pain.
One economist who's become suddenly "popular" is
Nouriel Roubini - aka "Dr Doom".
He gets this title as a result of his persistent
warnings over the last year or so, regarding an
impending economic crash. And while he was derided
in the "good old days", he's suddenly become very
popular in the light of his predictions having
come TRUE. In fact, he is now in great demand
around the world by people who want to know what
he is predicting will happen NEXT!
Well I'm afraid it's NOT good news. In fact Mr
Roubini is stating with certainty that the "worst
is yet to come". He says his most optimistic scenario
is a global depression on a scale never seen before,
and that the global economy is heading for a hiding.
He also says that all government actions to date
have failed (and will fail) to stem the impending
panic.
You can watch a very interesting series of 5 videos
of Nouriel Roubini addressing the current situation
on YouTube here:
http://www.youtube.com/watch?v=T3zqDnOx6B0
I've just watched the whole 5 and certainly recommend
you do the same.
Mostly what is says is descriptive rather than
prescriptive - but it's worth watching anyway.
The major points I gleaned from him are as follows:
1. A major depression is imminent and will be prolonged
even over a number of years.
2. The USA's status is seriously going to be challenged
in this recessionary environment - as it finds itself
with little room to move as the world's largest debtor
nation. Roubini even predicts possible geopolitical
"horse trading" as the US deals with countries like
China - trying to get financial assistance.
3. A systemic panic is about to get underway, and it's
even possible the US will shut down the stock market
for days or even a week at at a time, in an attempt
to stem investor panic.
4. This depression will cause a vast over-capacity in
the productive areas of the world - China and Asia -
which will have to contract considerably in the face
of falling global demand for their goods.
5. This excess productive capacity means the price
of goods will fall, as will assets - leading not to
an inflationary environment - but deflationary.
6. Deflationary means that CASH will become worth more
and all forms of assets and consumables worth less.
7. His advice is to build up cash reserves - and also
invest in US T-bills. (Although I personally would
not want to hold US Treasuries in the light of what
he says!)
Nouriel Roubini has his own information service
entitled Ecomonitor, which you can access here:
http://www.rgemonitor.com
From what I've read, I haven't seen any particular
recommendations from Mr Roubini - as to how best
manage this process, or even more importantly, how
to set things up so this type of thing doesn't happen
again.
I do know, however, that speculative bubbles in
various parts of the economy, driven by easy credit,
have lead to this "correction". And correction we
will have. There is nothing any politician or
demagogue can do to waive the fundamental laws of
economics. Like gravity - what goes up must come
down. And unless the monetary reform promised to
us by our "leaders" looks deeply into the inherent
problems caused by government issued/controlled fiat
money (money declared "legal tender" by government
fiat or command), then don't expect any miracles.
Ultimately the only sane solution is to completely
remove the issuance of money from government hands,
and allow it to be a function of the market. More
importantly, such private money needs to be anchored
against either a commodity like gold, or a basket
of commodities, to act as a break on run-away credit
creation.
As I've stated before, the best strategy in such
circumstances is to get out debt, build up your
cash reserves, look for safe-haven stores of value,
and position yourself to go "bargain hunting" when
the time is right. For as Doug Casey has said,
"Crisis = Opportunity".
Joining me in SovereignLife is a good move, if
you're not already a member, because we provide a
haven for freedom-seekers and "out-of-box" thinking.
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