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$516 Trillion ‘Time Bomb’ Set To Destroy World Economy

Sorcha Faal, and as reported to her Western Subscribers

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Today our World is staring into the abyss of total economic collapse on a scale unseen since the Great Market Crash of 1929, and which has been succinctly stated by London economic expert Will Hutton who has stated:

In the week of the crash in 1929, Wall Street fell by 23 per cent. Last week, it fell by 18 per cent, London and Frankfurt by 21 per cent and Japan's Nikkei by 24 per cent. Every major financial centre's interbank market is frozen. Trust and confidence have collapsed; the global system is paralysed on a scale that now surpasses 1929. There is a combination of a worldwide bank run, seizure of credit markets and collapse of asset values that could plunge the globe into a depression.”

Stanford University economist Nick Bloom has further warned the London Times that “the recent volatility of the stock market is on a par with the 1929 crash and subsequent episodes in that period when the Depression took hold. Bloom, who spends some of his time at the London School of Economics, is one of a number of economists who think it is not the level of the stock market that counts but the extent to which it fluctuates. Recent days have seen some of the wildest fluctuations ever, which leads him to think a bad recession is on the way. Britain, he says, could experience a 3% contraction in the economy next year. That may not sound much, but if it happens, it will count as the worst year since the 1930s.”

[Note: “In October 1929 shares on Wall Street fell sharply following a speculative boom during the "Roaring Twenties". In two days the Dow Jones industrial average fell by 25% (ending on Black Tuesday, 29 October). The volume of stocks traded set a record that was not broken for 40 years. When it finally reached its record low in July 1932, the Dow Jones had fallen 89%, and it did not recover to 1929 levels until 1954.” BBC Worldwide News Service]

But, to the direst warning of the abyss our World is facing we can read as reported by the London Times News Service in their article titled “IMF warns that markets could collapse by another 20% ”, and which says:

“The world is on the brink of financial meltdown, the head of the International Monetary Fund (IMF) said last night. His bleak warning came as finance ministers tried to calm the frenzy in markets that saw share prices crash by more than 20% last week.

Separately, the IMF’s chief economist predicted that shares could slump by another 20% before stabilising. G7 finance ministers pledged to take all necessary steps to support the banking system and stave off an economic slump.

Dominique Strauss-Kahn, the head of the IMF, warned that the measures so far “have not yet achieved the goal of stabilising markets and bolstering confidence”.

He said: “Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown.”

Even worse, and to what US billionaire Warren Buffett has called the real 'weapons of mass destruction', the ticking $516 Trillion ‘time bomb’ of the Global derivatives market is set to explode upon all of us, and as we can read as reported by London’s Independent News Service:

The market is worth more than $516 trillion, (£303 trillion), roughly 10 times the value of the entire world's output: it's been called the "ticking time-bomb".

It's a market in which the lead protagonists – typically aggressive, highly educated, and now wealthy young men – have flourished in the derivatives boom. But it's a market that is set to come to a crashing halt – the Great Unwind has begun.

Last week the beginning of the end started for many hedge funds with the combination of diving market values and worried investors pulling out their cash for safer climes.

Some of the world's biggest hedge funds – SAC Capital, Lone Pine and Tiger Global – all revealed they were sitting on double-digit losses this year. September's falls wiped out any profits made in the rest of the year. Polygon, once a darling of the London hedge fund circuit, last week said it was capping the basic salaries of its managers to £100,000 each. Not bad for the average punter but some way off the tens of millions plundered by these hotshots during the good times. But few will be shedding any tears.

The complex and opaque derivatives markets in which these hedge funds played has been dubbed the world's biggest black hole because they operate outside of the grasp of governments, tax inspectors and regulators. They operate in a parallel, shadow world to the rest of the banking system. They are private contracts between two companies or institutions which can't be controlled or properly assessed. In themselves derivative contracts are not dangerous, but if one of them should go wrong – the bad 2 per cent as it's been called – then it is the domino effect which could be so enormous and scary.

Most markets have something behind them. Central banks require reserves – something that backs up the transaction. But derivatives don't have anything – because they are not real money, but paper money.”

This concept of ‘not real’ money plunging the World’s economic systems into the abyss has been further emphasized by Yale economist Robert Shiller, who has stated bluntly:

If you're looking to track down your missing money — figure out who has it now, maybe ask to have it back — you might be disappointed to learn that is was never really money in the first place.

The notion that you lose a pile of money whenever the stock market tanks is a "fallacy." He says the price of a stock has never been the same thing as money — it's simply the "best guess" of what the stock is worth.

"It's in people's minds," Shiller explains. "We're just recording a measure of what people think the stock market is worth. What the people who are willing to trade today — who are very, very few people — are actually trading at. So we're just extrapolating that and thinking, well, maybe that's what everyone thinks it's worth."

Shiller uses the example of an appraiser who values a house at $350,000, a week after saying it was worth $400,000. "In a sense, $50,000 just disappeared when he said that," he said. "But it's all in the mind.”

But, in our World today, and where perception holds much greater weight than reality, this massive battle between the forces of ‘real money’ and ‘not real money’ are having their intended, and designed effect, and which virtually assures the continued destruction of the current Global economic system, and as we can read:

For many bystanders, the drama is compelling. Newspapers and TV channels report the crisis much as they did Hurricane Katrina or the Indonesian tsunami: a mixture of shock, awe and lots of computer-generated graphics. We know in our hearts that this will hurt us all, but the lingering feeling that the world has changed for ever in just 30 days leaves us giddy.

The anxiety is also contagious. No matter how secure one’s personal finances, it is impossible not to feel a frisson of panic at the thought that bank ATM machines might run out of cash, or pay-cheques might vanish into the ether: both very real prospects until the Government stepped in to underwrite the bank clearing system on Tuesday. Even now, there are scenarios so destabilising they are barely mentioned.

Our fear explains why Friday’s sell-off was so brutal. This delayed reaction to a month of almost unbelievably bad news in the credit markets was driven primarily by ordinary investors – Mr & Mrs Average finally deciding to cash in their pension nest egg for fear it might be cracked beyond repair by Monday.

All round the world, fund managers reported a huge surge in customers demanding their money back. The professionals panicked long ago.

Ironically, the worst of the financial crisis may, just possibly, have passed. Friday also exhibited many of the hallmarks of what market historians call “capitulation” – the moment when even the optimists lose hope.

The sad lesson of past stock-market crashes is that the point when ordinary punters finally realise it is time to get out usually marks the point when it is time for the smart money to get back in again.

But the difference now may be in what happens beyond the financial markets. Usually, a banking crisis follows some form of economic crisis: lenders are hit by wave after wave of customer bankruptcies until they themselves cannot take any more and topple over. This time, the banking collapse has preceded the recession.

Although the crisis started with the default of some sub-prime mortgages in the US, the scale of the global market losses (and government bail-outs) long ago exceeded the size of the initial defaults.

Instead, last week’s stock market rout marked the point when the usual direction of cause and effect was reversed: now it is the real economy that is expected to take its cue from the markets.

Countries could be next to see their solvency questioned. Iceland is already seeing its currency under attack. Difficult places such as Pakistan, Ukraine and Kazakhstan are looking vulnerable – with devastating consequences for political stability.”

The importance of understanding all of these things, no matter how complicated they may seem to be, provides not only true knowledge, but true protection against the worst calamities yet to come. 

And towards this end it is first, and foremost, important to come to a full understanding that what is currently being viewed as an ‘economic’ crisis is, instead, a major shifting of our World’s current power structure from one of individual Nation States to one frequently referred to as a New World Order, and which calls for the abolishment of all Nations to be replaced with a One World Government.

Now history has given us the guideposts to spot along the road to One World Government, the most important of them being that any major shift in Global governance can only be achieved by its resting upon what is called ‘The Triads of Reason’, and which in our current circumstance two have already been put into place with the Global Warming and now Global Economic Chaos and leaving only the last one, Total Global War, to be thrust upon an unsuspecting World.   

For our World’s hope there are those factions operating within the United States desperately working to avert the final leg of this triad, Total Global War, from being put into place, and as we have reported on many times in the past including our October 9th report “Top US Generals Reach Out To Russian General Staff To Avert Global War”.

European factions against One World Rule are also attempting to avert Total Global War and are reporting that they have ‘shelved’ their differences with Russia in an attempt to avert the current crises from escalating, and which is a most significant move in that Russia now stands alone of all the World’s Nations in being able to contain those advocating the complete destruction of our Earth as we know it.  

In our discussion of these things it important that we acknowledge the beliefs of those advocating for the establishment of The Triads of Reason, and which are actually based upon sound scientific principles as first espoused by nineteenth-century German philosopher Friedrich Nietzsche who stated “out of chaos comes order”:

“According to a computational study conducted by a group of physicists at Washington University in St. Louis, one may create order by introducing disorder.

While working on their model – a network of interconnected pendulums, or "oscillators" – the researchers noticed that when driven by ordered forces the various pendulums behaved chaotically and swung out of sync like a group of intoxicated synchronized swimmers. This was unexpected – shouldn't synchronized forces yield synchronized pendulums?

But then came the real surprise: When they introduced disorder – forces were applied at random to each oscillator – the system became ordered and synchronized.

"The thing that is counterintuitive is that when you introduce disorder into the system – when the [forces on the pendulums] act at random – the chaos that was present before disappears and there is order," said Sebastian F. Brandt, physics graduate student and lead author of the study which appeared in the January 2006 edition of Physical Review Letters.”

Towards this end, the forces advocating for the Total Global Destruction, through Climate, Economies and War, envision an Earth free from these things in what they intend to rebuild in its place where no more wars will be allowed, poverty will be eliminated as Global wealth is redistributed, the environment is protected by the banning of genetically modified foods and pesticides, where prisons will be emptied of all but the most violent of criminals, and the main focus of the human race will be reaching to the stars instead of remaining on an World rapidly running out resources to sustain us.

To the desired end goal of the New World Order advocates there should be no disagreement. But, to the means they are employing in order to obtain their goals (order out of chaos) one can certainly raise strong objections to them as literally hundreds of millions of human lives are now hanging in the balance should they succeed.

Though too much uncertainly remains in all of these equations as to whom will ultimately prevail in this titanic struggle, it does remain a fact that in these very days we are living these issues will be decided, and which therefore leaves only one option for all of us….how to survive.

[Ed. Note: The United States government actively seeks to find, and silence, any and all opinions about the United States except those coming from authorized government and/or affiliated sources, of which we are not one.  No interviews are granted and very little personal information is given about our contributors, or their sources, to protect their safety.]

Translation to Spanish by: Sister Maru Barraza, Mazatlán, Mexico

www.whatdoesitmean.com/index1153.htm