Wednesday, 21 January 2009

"the entire financial sphere is suspected of being a giant black hole"
Edited on Wed Jan-21-09 01:09 PM by Ghost Dog
LEAP 2020 sees us entering a period of insolvency, including financial system insolvency:

...the situation prevailing today throughout the entire global financial system, a large part of the world economy and all the economic players (including States) who based their growth on debt in the past years. The crisis translates and magnifies a problem of global insolvency. The world is becoming aware of the fact that it is a lot poorer than it used to believe in the last decade. And 2009 is the year when all the economic players must try to assess their real level of solvency, knowing that many assets are still losing value. Moreover a growing number of investors no longer trust the traditional instruments and indicators of measurement. Quoting agencies have lost all credibility. The US Dollar is just a fiction of international monetary unit and many countries are striving to get away from it as quickly as possible (6). Thus, quite rightly, the entire financial sphere is suspected of being a giant black hole.

Roubini: Credit Crisis Losses Could Hit $3.6 Trillion January 20, 2009 10:36 AM ET At a conference in Dubai, NYU's Nouriel Roubini said credit crisis losses could hit $3.6 trillion, up from $1 trillion worth of writedowns and losses estimated by Bloomberg to have already roiled the global financial system.

... Roubini says that if losses are really as large as he fears “it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis.” He also warns the disease is spreading to Europe, where the Royal Bank of Scotland Group faces an estimated $41 billion loss. Roubini also said the global slowdown will keep oil prices in the $30-$40 a barrel range this year, and he predicted commodities would fall another 15-20 percent from current levels...

So, is the money just vanishing down a black hole, vapourising, since the globalised financial system was sitting on a bubble inflated by leverage and exotic toxic instruments? And/Or are certain or incertain parties taking advantage of the situation and making killings, resulting in "an unprecedented concentration of private wealth"?

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