Overheated Financial Planet, World Political Chaos and Shadow Banking

… but Solutions for the Future Continue to Emerge – Published on Global Research.ca, by GEAB no. 81, January 17, 2014.

… We have symbolised 2013 as “the first steps in a chaotic world after” (1).

A year which was in effect the new century’s zero year and at the end of which solutions were emerging from all sides. At the beginning of 2014 the spotlight is henceforth on the Eurozone, China, Russia and the BRICS where the tools to shape the “world afterwards” are being designed with incredible rapidity: the “world before” is handing over to “the world afterwards”.  

Nevertheless, there is a permanent risk of an explosion from the overheated financial planet driven by the incredible US imbalances… unresolved or little resolved.

And the current transition period, certainly hopeful, is highly dangerous nevertheless. One danger is the statistical “smog” (2) which will probably characterise the year: first, the US economic and financial indices have lost any sense of direction by dint of being manipulated in order to hide the catastrophic reality; and second, the emerging world’s tools of statistical transparency aren’t sufficiently reliable to properly throw light on the reality. A collapse of visibility ongoing for several years on the one hand, the beginning of an organised transparency which the world economy needs to plan strategies on the other, in 2014 we are on statistical understanding’s trough of the wave. And that won’t be without its consequences.



… The continued rise in US bond interest rates actually causes a similar increase in individuals’ borrowing rates. In 2012, 30 year mortgage rates were around 3.5%; now they are around 4.5%; a further one percentage point increase would therefore bring them to 5.5%. Yet at 3.5% a household could borrow $400,000 with monthly repayments of $1800, whilst at 5.5% it could borrow no more than $317,000 with the same monthly repayments: therefore it would need around a 20% fall in real estate prices (!) to keep the same purchasing power… As we have already seen in the GEAB N° 80, concern on this subject is becoming obvious (8) and 2014 will see a significant fall in US real estate prices as we will explain further in the Telescope section. Yet all the real estate finance works only on the assumption of rising prices (compare with 2007-2008); in addition, a huge number of Americans’ consumer loans are pledged on their houses and real estate market weakness would, therefore, spread throughout the economy. This is the really bad news of this beginning of year.
(full text, graphs, notes).


2010 Building What? 57.52 min, uploaded by 911TVorg, March 16, 2013;

Capitalism In One Lesson, 14.44 min, uploaded by V for Voluntary Library, May 4, 2011.

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