Quote Originally Posted by passengers View Post
^Correct, in stages 10 and 11 of the ecomonic forecast BKKandrew posted a long long time ago, with the baseline being early 2007...:

1. Global Housing Market Bubble Bursts
2. Global Bank Lending Implodes
3. Global Economy Begins to Contract
4. Global Banks begin to Fail
5. Global Unemployment Soars
6. Global Banks are Nationalised
7. Global Interest Rates are Lowered Dramatically to 0%
8. Global Quantitative Easing will be carried out on a Massive Scale
9. Global (Inflationary)Default on Debt
10. Global Hyperinflation
11. Global Dash For Assets
12. Global Monetary Collapse
13. Global Political Meltdown
Appears to be on track so far. But I would have to disagree with number 13 as the end game. Instead I would go for --
#13. Global political disarray and civil unrest. then, --
#14 Reassessment of global monetary system abandoning the $US and replacing it with a productivity based basket of currencies. And finally
#15. A slow return to global trade prosperity.

I used to think this current world financial crisis would last for 3 to 5 years, but now I am thinking it might go 5 to 10 years because every country is trying to maintain the status quo of the already failed $US hegemony by simply pumping more paper money into the system. Such a move, trying to promote recovery by inflationary practices designed to sustain an unsustainable US debt is doomed to failure and only prolongs the agony period of recovery.

The big danger is that even after the inevitable crash of the $US, the world will continue to try to base international trade on the currency of just one country/region, -- be it the $US or the Euro. Such a move would inevitably lead only to another world financial collapse sometime in the future.

I do have confidance however that (eventually) after the failed experiment of the past 35 years using the $US as the worlds trading medium, common sense might prevail and a more substantial productivity based trading medium will be established.