The shape of the world economy

[Gatelodge]

The shape of the world economy

moneyweb.co.za/mw/view/mw/en … &sn=Detail

The Chinese property market has experienced a growth that is incomprehensible to western minds as it moves millions of people into new cities. The stock exchange is on a run to the moon at a pace that makes the American stock exchange of 1929 look like a dwarf. Credit is on the increase and everyone and his dog is in the stock market.

China has also formed a political alliance with Russia and Iran over future supplies of oil, which could precipitate a world war in the Middle East - the guns are loaded and ready.

As if trade wars and currency devaluations by all exporting countries was not enough, we also have a global crude oil supply problem, peak oil and global warming.

Now add a derivative market problem that did not exist in the 1920s. According to the Bank of International Settlement data there are $370trn derivatives sitting on a wall just waiting for somebody to give them a push. Today every time a derivative trade goes bad the losses run into billions of dollars. A recent mal-investment on a derivatives bet in South Africa cost the trader R200m. A derivative collapse is on the cards and nobody knows the exact damage it will cause.

Global economies today appear to be strong, in fact stronger than at any time in history. Central banks are supremely confident that they can avert any global monetary crisis - this time it really, really is different - Financial systems are far more sophisticated. However, historically we have seen that just as the praises are sung and the tower of Babel is almost complete, tragedy strikes.

[Blindjustice]

Invest in Nuclear weapons…

[crashandburn]

Read in The Financial Times on Friday that some oil sites in the North Sea are now up for sale by Exxon…they’re not profitable anymore, given their low oil output, for the larger companies to operate…

[Green_Bear]

Credit Expansion: When It Corrects It Will Be The World’s Biggest Planetary Bust