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Report: Global Economy Teetering On The Brink

PERILOUS TIMES LIE AHEAD … By FITSNews  ||  A new report released this week underscores the long-term problems facing the global economy in the wake of the recession and government-initiated “recovery.”  Commissioned by the International Centre for Monetary and Banking Studies, the 16th annual Geneva Report contained some ominous warnings…

PERILOUS TIMES LIE AHEAD …

By FITSNews  ||  A new report released this week underscores the long-term problems facing the global economy in the wake of the recession and government-initiated “recovery.”  Commissioned by the International Centre for Monetary and Banking Studies, the 16th annual Geneva Report contained some ominous warnings for the world’s fiscal future.

The report – which “provides a deep dive into the details of global debt dynamics over the past decade” – specifically addresses the issue of deleveraging, which is a fancy term for reducing the percentage of debt in one’s balance sheet.

The myth has been that governments have been deleveraging in the aftermath of all the “stimulus” efforts of the last five years … but in reality, their debt situations have gotten worse.

“Contrary to widely held beliefs, the world has not yet begun to delever and the global debt-to-GDP is still growing, breaking new highs,” the report concluded.

Why is this happening?  Simple: All that taxpayer-funded “stimulus” failed to achieve the expected recovery, and the resulting economic lethargy is draining the ability those taxpayers to sustain the consumer economy.

“In a poisonous combination, world growth and inflation are also lower than previously expected, also – though not only – as a legacy of the past crisis,” the report concluded. “Deleveraging and slower nominal growth are in many cases interacting in a vicious loop, with the latter making the deleveraging process harder and the former exacerbating the economic slowdown. Moreover, the global capacity to take on debt has been reduced through the combination of slower expansion in real output and lower inflation.”

Wow .. “poisonous combination.” “Vicious loop.”

Sounds like a recipe for another crash if you ask us …

World debt – public and private – stood at 160 percent of national income in 2001, according to the report.  In 2009 – at the peak of the global financial crisis – it stood at 200 percent.

Today?  It’s an estimated 215 percent … and climbing.

We’ve said it before and we’ll say it again: The center cannot hold.  Governments around the world cannot continue to sustain their crony capitalist backers and their welfare states with money borrowed from future generations of taxpayers.

At some point, the bubble bursts …

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24 comments

Just another guy September 29, 2014 at 9:45 am

Thanks zerohedge. Great info and glad to see you are so smart that you can even call a top to the US and global Economy.

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Mike at the Beach September 29, 2014 at 10:13 am

If Zero Hedge says the sky is falling (and they always do), then by God the sky is falling. Not…

Zero Hedge is entertaining (once in while) but seldom correct in regard to investing or world calamity. There have been a few amusing studies of what a portfolio would look like after following the ZH lead for 7 years…it was pretty ugly. My favorite was their incessant crying about all of the inflation we would face in 2010 and beyond. Luckily, my investment guy went to regular money guy school and not Zero Hedge school so I stayed out of bonds and in the market and did pretty well. Of course, if they cry collapse long enough, eventually they will be right (about once every correction cycle, to be precise).

http://www.zerohedge.com/article/shadowstats-john-williams-prepare-hyperinflationary-great-depression

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E Norma Scok September 29, 2014 at 10:14 am

Wow…this place is pretty depressing lately.

When does the world end, Fits? It’s looking like any day now.

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2014 Candidate September 29, 2014 at 11:44 am

It ends sometime in November UNLESS YOU VOTE FOR ME! I have a plan which will save you, your family, your loved ones, and everyone else, and I will reveal it the second I win the election!
But if I lose, screw you. I’m keeping it to myself and the whole world can burn in Hades for all I care…

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euwe max September 29, 2014 at 12:11 pm

Well, I’m investing in Gold Line! I’ve got a closet FULL of newly minted 1mg gold clad coins! I got them while they were HOT!

When I get my genuine commemorative gold clad buffalo nickles out, I’ll be the ONLY ONE who can buy bread, BEETCHES!

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E Norma Scok September 29, 2014 at 1:23 pm

I’ve always wondered if gold is so damn great, why does anyone want my worthless dollars in exchange for it?

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euwe max September 29, 2014 at 2:51 pm

It’s a game of hot potato.

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The Colonel September 29, 2014 at 10:35 pm

In a nut shell, you have just described the precious metals market.

HappyBirthday2U September 29, 2014 at 10:20 am

Isn’t this a lovely news headline to wake up to on a Monday morning?

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Lord Keynes September 29, 2014 at 10:33 am

We haven’t printed enough money for the growth to take hold. Stay the course! (and I know the Federal Reserve will!)

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Tom September 29, 2014 at 12:43 pm

Boy are you behind the times. I think that is a 2008 GOP talking point. Have you not been reading your talking points lately. You are supposed to be saying Obama is screwing up the middle east and ending with a reference to Bengazi.

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Lord Keynes September 29, 2014 at 1:01 pm

I’m an economist that has the betterment of society in mind. What do I care about Benghazi?

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Smirks September 29, 2014 at 10:39 am

The best thing about people who cry out that the economy is going to collapse is that it’s just a matter of time before it happens, which of course, “proves” they were correct.

Buy gold! Gold! Gold will always grow in value! The economy is going to collapse and everyone will be clamoring for your gold! Gold!

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truthmonger September 29, 2014 at 1:43 pm

I prefer lead, copper, and steel. Better for surviving collapses.

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ELCID September 29, 2014 at 11:31 am

“Money borrowed from future Generations” WHAT?????
There’s no money being borrowed from future generations.
We have already given them the bill, and it’s pay up now or have no future at all.
It’s called: STUDENT LOANS!!!

That’s where State and Federal Governments give the illusion of cutting taxes by cutting off support for Public Colleges. Then allowing the Colleges to just pass the costs on to the students immediately. Plus, allowing all the private for profit Diploma Mills to rip off kids right and left.

It’s just disgusting!!!

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Ponzi United States September 29, 2014 at 1:03 pm

What’s a bigger rip-off, diploma mills or burying kids in debt with gov’t backed loans to buy degrees they can’t pay back said loans with?

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euwe max September 29, 2014 at 12:08 pm

Oh no!

Not again!

I thought the Jehovah’s Witlessnesses were persistent in their prediction of an end time.. .but *this* – we’re all going to hell every damn *week*!

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Jack September 29, 2014 at 12:50 pm

There may in fact be people who can consistently accurately predict where the economy is going. However, if there are, you can dang sure bet they aren’t telling you and you don’t know who they are. Because if you can predict the direction of the economy, then you can make a fortune no matter what direction the economy moves. There is only one pretty good bet; and that is when some organizations touts their ability to see the future, you can bet, they can’t see the future.

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RogueElephant September 29, 2014 at 1:53 pm

When the welfare state runs out of everyone else’s money it is all over. I would guess we are about there. It could get interesting. How long can you rob Peter to pay Paul ?

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BinklyTellsTheTruth September 29, 2014 at 3:41 pm

It’s not the “welfare state” that controls 80% of the world’s money, genius. That’s like saying a river floods because someone poured in a big gulp from 7-Eleven. Do you guys actually believe the rhetoric you spout?

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Jack September 29, 2014 at 4:11 pm

Yes, they apparently do. They seem completely oblivious to the fact that taxes are at 50 year low and the income and net worth of the top 5% of Americans is at almost century high, corporations are making record profits, and the wealthy are richer than ever.

What this country pays for “welfare” is nothing compared to what we pay out to benefit large corporations and billionaires. Yet somehow the country is about to go under supporting the poor. What a Crock of shit. This is typical GOP. They decry class warfare, when in fact they want class warfare between the middle class and the poor. They just want to be sure the rich are not hurt in the fall out. The rich have been waging class warfare since the 1980s.

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nitrat September 29, 2014 at 3:27 pm

No

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Ebony & Ivory September 29, 2014 at 4:21 pm

“But, hey, if the GOP is so hot to stay at war, how about a WAR TAX to pay for it?”

Well, Obama, the one that pushed this last round, could have done the responsible thing and told his crew to put it in the latest war bill, but he didn’t.

So the Dems are really no better than the GOP in that area.

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Rocky Gonna Run September 29, 2014 at 11:11 pm

The sky is falling, the sky is falling. No! Stra! Dumbass! is right – the end is near. Repent sinners and prepare for the coming of the end. It’s all a shell game, and he corporations hold the hidden pea. Run for your guns. Get digging a bomb shelter out back and stock up on beans and franks. Get all the sterno you can.
In other news – home values in SC are increasing at 6% a year and mortgage rates remain well under 5%.

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