Europe’s Systemic Collapse…

The future according to Phoenix Capital Research.

It is always enlightening to read analyses written on behalf of the financial sector, but they also make me naively wonder why, when faced with the consequences of such a dangerous global meltdown, politicians think that they have anything to lose… why don’t they just take the banks into democratic ownership (ie. full nationalisation) and solve most of the problems at a stroke?  The political power of the banks would be annulled, and governments could get on with the real world problems of creating full employment, investing in mitigating climate change and oil dependency with a new green deal.

As Stephen Spratt wrote in January 2009 for New Economics Foundation:

‘Just as this was no accident, neither is anything about it inevitable. One positive feature of the meltdown we are witnessing is that it should finally lay to rest the idea that if we just let financiers and business leaders get on with it, the best of all possible worlds will be the result.’

Europe’s Systemic Collapse… and What It Means For Us and You

… it’s clear now that the world is entering a period of wealth destruction. Europe is in the midst of a sovereign debt crisis. History tells us that this will entail more than one sovereign nation going belly-up. Indeed, I believe that we’ll see ALL of the PIIGS, as well as France, stage sovereign defaults in the coming months.

After that will come Japan, then finally the US. By the time the smoke clears, we will have seen systemic collapse.

This will mean:

Many major banks disappearing, as well as numerous potentially lengthy bank holidays (think Argentina in 2001)

Multiple sovereign defaults as well as broad economic contractions and their commensurate unemployment/ civil unrest/ erasure of retirement accounts/ pensions (this process has already begun in some US municipals, e.g. San Bernandino and Stockton California as well as Harrisburg Pennsylvania).

Possibly new currencies being introduced or new denominations of currencies (say one new unit being worth 1,000 of the old one)

Massive wealth destruction to the tune of tens of trillions of Dollars (think MF Global i.e. the money is gone… only systemically… in fact we just had another such instance with PF)

A global contraction that will result in new political/ power structures being implemented as well as the breakup of various countries/ unions.

Very serious trade wars to begin (see Obama’s recent attack on China) and very possibly a real war.

… I know that much of what I’ve written to you in the past could be labeled as “gloom and doom.” However, I want you to know that I do not use the words “systemic collapse” lightly. Indeed, I wish I wasn’t mentioning them now, but I’d be doing you a disservice not to bring them up because we’re well on our way towards it.

At Phoenix Capital Research, we are determined to help our clients get through this period safely and profitably. The words “systemic collapse” sounds horrifying but the truth is that some of the world’s biggest fortunes were made during Crises.

1 thought on “Europe’s Systemic Collapse…

  1. Pingback: Can the Eurozone survive its Crisis? | Think Left

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