December 21 2012

Letter Re: Numerous New Economic Crash Warnings

Hi Jim,
Within the last couple of days I have noticed that multiple economic and financial institutions have started to issue global financial crash alerts. For instance:


- Morgan Stanley warns of a 'catastrophic event'. The point of maximum stress could occur in coming months if the European Central Bank (ECB) starts to raise rates and the Fed backs away from expected tightening. The rates differential "could trigger a 'catastrophic' event".

- The Global Europe Anticipation (LEAP/E2020) team is now convinced that this period will consist for the whole world in a major plunge into the heart of the phase of impact of the global systemic crisis. The upcoming six months are in fact the core of the unfolding crisis. The troubles met in the past 12 months were mere harbingers.

- In its latest quarterly report, the Bank for International Settlements (BIS) warns that the credit crisis could lead world economies into a crash on a scale not seen since the 1930s.

- The Royal Bank of Scotland has advised clients to brace for a full fledged crash in global stock and credit markets over the next three months as inflation paralyses major central banks.

You know the risk for a 'mother of all great depressions' is real when normally cheerful bankers start to openly warn about a global crisis.
Time to recite the old adage: "The one who panics first wins!" Thanks for publishing a great blog. Regards, - Alain

JWR Replies: Here is one more article to add to your list: Paulson & Co. Says Writedowns May Reach $1.3 Trillion

R-girl.....
Regarding credit cards...all our gas stations here are only excepting Cash now. Could be just a matter of time before they do this with buying food. I've always used cash anyway, but then thats going to be worthless. After that it will be the Amero, or the Euro.
Lets hope they don't enforce a "national ID card" too soon!

R-girl....Our gas stations are only taking cash (somewhere in Tx)...Others stations are closed. Exxon is trying to sell their gas-stations, and get out of the "reatail" part of oil and gas. (Now that they've made their $billions off of us poor civilians).

The closest station to me is 8 mls away...if it closes, then its 25 miles to the next one.....if that one closes, then its 50 miles.

Been useing the motorbike to get to work, but maybe its time to get that bicycle........heh,heh.

Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero".

"We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. "There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."

Fortis expects a complete collapse of the US financial markets within a few days to weeks. That explains, according to Fortis, the series of interventions of last Thursday to retrieve € 8 billion. "We have been saved just in time. The situation in the US is much worse than we thought", says Fortis chairman Maurice Lippens. Fortis expects bankruptcies amongst 6000 American banks which have a small coverage currently. But also Citigroup, General Motors, there is starting a complete meltdown in the US"