Chronicles Of Depression 2.0: #012

Bear market rallies only delay day of reckoning

Bernard Connolly at Banque AIG, who foresaw this crisis with uncanny accuracy, believes central banks will resort to full-throttle reflation, setting off a fresh boom in shares and gold. But this will occur only after the economic slump has spread to Europe and beyond.

The authorities will wait too long to act, believing their own decoupling myth. Unemployment will ratchet up. Civil unrest may rock Latin Europe.

In the end, the whole industrial world will stoke a fresh credit bubble to put off the day of reckoning, for another cycle.

The capitalist system is now so deformed by debt that it requires ever lower interest rates to keep going. It survives on perma-bubbles. Monetary rigour at this late stage would endanger democracy.

How did we ever let matters reach this pass?

Emphasis added by me.

If you’ve come in late: The British press is doing the best coverage of the current (final?) financial crisis. News you do not see in American press coverage. Ambrose Evans-Pritchard at the Telegraph.co.uk is the best of them.

Explore posts in the same categories: C.O.A.T. - Money, C.O.A.T. - Politics, Depression 2.0