Wednesday, March 04, 2009

Prepare for Global Geopolitical Dislocation - Wolfie

The last few weeks we have been hearing a lot about stimulus packages and historic decisions but what might have many people puzzled is that these bold pronouncements don’t seem to be cheering the markets very much, in fact they have been heading south faster than ever. So why are the markets not responding to the stimulus now and are they going to in the near future? Well this very issue was picked-up by European think-tank leap2020 last week and their prognosis does not look good.

Beginning of Phase 5 of the global systemic crisis: phase of global geopolitical dislocation.

Due to the global leaders’ incapacity to fully realise the scope of the ongoing crisis (made obvious by their determination to cure the consequences rather than the causes of this crisis), the global systemic crisis will enter a fifth phase in the fourth quarter of 2009, a phase of global geopolitical dislocation.

A. Two major processes:
1. Disappearance of the financial base (Dollar & Debt) all over the world
2. Fragmentation of the interests of the global system’s big players and blocks

B. Two parallel sequences:
1. Quick disintegration of the current international system altogether
2. Strategic dislocation of big global players.

In the United States, as in Europe, China and Japan, leaders persist in reacting as if the global system has only fallen victim to some temporary breakdown, merely requiring loads of fuel (liquidities) and other ingredients (rate drops, repurchase of toxic assets, bailouts of semi-bankrupt industries,…) to reboot it.

More depressing thoughts at the Two Wolves Blog

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