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The Very Great Depression of 2008

2008 is going to be rough. According to some, it’s going to be the kind of rough we’ll tell our grandkids about.

Bert Heilema, writing in Canada’s Belleville Intelligencer, cites a chilling report called the Global Europe Anticipation Bulletin. Its authors conclude that we’re about half a year away from total economic meltdown — what they call the forthcoming “Very Great U.S. Depression”.

It’s a grim analysis. Phrases like “no historic precedent” get my attention.

“The end of the third quarter of 2008 (thus late September, a mere seven months from now) will be marked by a new tipping point in the unfolding of the global systemic crisis.

“At that time indeed, the cumulated impact of the various sequences of the crisis will reach its maximum strength and affect decisively the very heart of the systems concerned, on the front line of which (is) the United States, epicentre of the current crisis.

“In the United States, this new tipping point will translate into — get this — a collapse of the real economy, (the) final socio-economic stage of the serial bursting of the housing and financial bubbles and of the pursuance of the U.S. dollar fall. The collapse of U.S. real economy means the virtual freeze of the American economic machinery: private and public bankruptcies in large numbers, companies and public services closing down.”

The authors of the GEAB are not the only prognosticators of doom. Ambrose Evans-Pritchard, International Business Editor for the London Telegraph, says the Fed’s January rate cut hasn’t done diddly:

The verdict is in. The Fed’s emergency rate cuts in January have failed to halt the downward spiral towards a full-blown debt deflation.
The debt markets are freezing ever deeper, a full eight months into the crunch. Contagion is spreading into the safest pockets of the US credit universe.
For the first time since this Greek tragedy began, I am now really frightened.

What does that mean? Bank failures, business closings, and some very difficult times ahead as about a trillion-with-a-T dollars in phantom wealth goes *poof* around the world.

The incomparable Mogambo Guru puts its best: “We’re freaking doomed!”

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