Mr. Global Economy – The Economic & Psychological Prognosis

Reading time: 2,516 words, 6 to 10 minutes

Satyajit Das, who I consider one of the high priests of Finance, wrote the following hard-hitting global economic prognosis on the Prudent Bear.

I re-print his introduction below with a link if you want to read the rest of the article. He confirms what I’ve been saying for five years; we’re in for a long global depression.

If you like Satyajit’s warning, thank him, not me. I just messenger. Here’s the message.

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Mr. Global Economy – The Economic & Psychological Prognosis
• by Satyajit Das
• October 11, 2012

As requested, I have undertaken an extensive examination of Mr. Global Economy, both physical and psychological.
Patient History

The patient’s history includes a seizure in 2007/2008 – financial losses, banking problems, a major recession, etc. Liberal injections of taxpayer cash avoided catastrophic multiple organ failure assisting a modest recovery.

Governments ran large budget deficits in the period after the crisis. Interest rates around the world were reduced to historic lows, zero in many developed countries.

With interest rates constrained at zero, central banks have adopted “innovative” treatments, referred to as quantitative easing; the fashionable appellation of a more old-fashioned procedure – printing money. Balance sheets of major central banks have increased from around $6 trillion to $18 trillion, an unprecedented 30% of global gross domestic product (GDP).

As evident from the anticipation of and reaction to decisions by the U.S. and European central bank to provide further support, the global economy is now addicted to monetary heroin. Increasing doses are necessary for the patient to function at all.

To continue reading click Mr. Global Economy – The Economic & Psychological Prognosis

Gerold
October 15, 2012

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About gerold

I have a bit of financial experience having invested in stocks in the 1960s & 70s, commodities in the 80s & commercial real estate in the 90s (I sold in 2005.) I am appalled at our rapidly deteriorating global condition so I've written articles for family, friends & colleagues since 2007; warning them and doing my best to explain what's happening, what we can expect in the future and what you can do to prepare and mitigate the worst of the economic, social, political and nuclear fallout. As a public service in 2010 I decided to create a blog accessible to a larger number of people because I believe that knowledge not shared is wasted.
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