You are currently browsing the monthly archive for March 2008.
Below is the link an article about the state of the American economy. I have been seeing something along these lines for quite a while. I also have been expecting this for almost two decades. There is much to be said in addition to provide context.
Read the next posting for my thoughts. All the best, Moish
International experts foresee collapse of U.S. economy
And you thought that I had a gloomy outlook on the economy. Now the bad news
pops up everywhere.
Harry Koza in the Globe and Mail quotes Bernard Connelly, the global
strategist at Banque AIG in London, who claims that the likelihood of a
Great Depression is growing by the day.
Martin Wolf, celebrated columnist of the U.K.-based Financial Times, cites
Dr. Nouriel Roubini of the New York University’s Stern School of Business,
who, in 12 steps, outlines how the losses of the American financial system
will grow to more than $1 trillion – that’s one million times $1 million.
That amount is equal to all the assets of all American banks.
Every day now, thousands of people all over the U.S. and Great Britain are
walking away from their homes – simply mailing their house keys to the banks
– as housing bailout plans fail.
With unemployment growing, the next phase will hit commercial real estate
making the financial institutions the unwilling owners not only of quickly
depreciating houses, but also of empty strip malls and even larger shopping
The next domino to fall will be credit card defaults, and after that… who
knows? There are so many exotic funds out there, with trillions of dollars
in paper – or rather computer-screen money – all carrying assorted acronyms,
and all about to disintegrate into nothingness. Over the next couple of
years, scores of banks that have thrived on these devices, based on quickly
disappearing equities, will fail.
The most frightening forecast so far comes from the Global Europe
Anticipation Bulletin (GEAB), available for 200 euros – about $300 – for 16
issues annually. Its prediction is quite specific.
Where my warnings never spelled out an exact date, this think tank has it
pegged precisely. Here are its very words:
“The end of the third quarter of 2008 (thus late September, a mere seven
months from now) will be marked by a new tipping point in the unfolding of
the global systemic crisis.
“At that time indeed, the cumulated impact of the various sequences of the
crisis will reach its maximum strength and affect decisively the very heart
of the systems concerned, on the front line of which (is) the United States,
epicentre of the current crisis.
“In the United States, this new tipping point will translate into – get this
– a collapse of the real economy, (the) final socio-economic stage of the
serial bursting of the housing and financial bubbles and of the pursuance of
the U.S. dollar fall. The collapse of U.S. real economy means the virtual
freeze of the American economic machinery: private and public bankruptcies
in large numbers, companies and public services closing down.”
The report goes on to say that we are entering a period for which there is
no historic precedent. Any comparisons with previous situations in our
modern economy are invalid.
We are not experiencing a “remake” of the 1929 crisis nor a repetition of
the 1970s oil crises or 1987 stock market crisis.
What we will have, instead, is truly a global momentous threat – a true
turning point affecting the entire planet and questioning the very
foundations of the international system upon which the world was organized
in the last decades.
The report emphasizes that it is, first and foremost, in the United States
where this historic happening is taking an unprecedented shape (the authors
call it “Very Great U.S. Depression”).
It continues to predict that, although this crucial event is global, it will
be the beginning of an economic ‘decoupling’ between the U.S. and the rest
of the world. However, non ‘decoupled’ economies will be dragged down the
U.S. negative spiral.
Concerning stock markets, the GEAB anticipates that international stocks
would plummet by 40 to 80 per cent depending where in the world they are
located, all affected in the course of the year 2008 by the collapse of the
real economy in the U.S. by the end of summer.
The European authors of this report – it appears simultaneously in French,
German and English – state that they simply and without prejudice try to
describe in advance the consequences of the ominous trends at play in this
21st-century world, and to share these with their readers, so that they can
take the proper means to protect themselves from the most negative effects.
So there you have it. Three reports from three different sources, all well
regarded, and all pointing to a disastrous fall-out from our monetary moves.
This and earlier columns can be seen at hielema.ca. Comments to
Article ID# 918803
This is a belated announcement of a lecture series I’m giving. Two hours or so after the live lecture, you can access it in mp3 by connecting to the following link:
Here is the flyer about the series:
Yeshivat Simchat Shlomo Presents:
The Rebbe and The Rav; Reb Shlomo and Rav Soloveitchik;
Uber Alter Chassidut and Hyper-Intellectual Brisk/YU Modern Orthodoxy
with R.Moshe Pesach Geller
Sunday, March 2nd 2:00pm – 4:00pm:
Identifying Their Essential Hashkafa
(source material will be provided)
Monday, March 3rd, 3:30pm – 5:00pm:
Delving Into Their Depths,
Searching for Convergence and Difference
Tuesday, March 4th, 4:00pm – 5:30pm:
Coming to Conclusions and Bringing Clarity to Our Own Journey
Where: 18 HaGilboa Street. Jerusalem, 94314, Israel. +972 (2) 622 1456
Rabbi Sholom Brodt, Av Rosh Yeshiva.
A Project of Sukkat Shaleym.