Golden Straws In The Wind
...
The next credit crisis could change everything
So
far, China and Russia have resisted the temptation to act
precipitously. Their economies are dependent on Western cooperation.
Russia exports energy to the West, and China runs a trade surplus in
goods and services. To dispense with Western trade, they need an
Asia-wide self-contained market. They are building it, with China’s silk
road projects and by consolidating the membership of the Shanghai
Cooperation Organisation. But not all the groundwork has been done,
certainly not enough to “go commando”.
The transfer from a
dollar-centric world to gold-backed roubles and renminbi will continue
to be at a pace determined by the monetary mistakes of America. That is
why the next economic downturn is so important to geopolitical outcomes.
And it won’t be just a rerun of Lehman, characterised by a sudden
crisis, money-printing, and heaving a sigh of relief when the banking
system doesn’t collapse.
The starting-gun for the next credit
crisis has already been fired. A reversal of expanding cross-border
trade is in full swing. The sales of dollars by foreigners has begun.
There is little doubt there is a recession ahead, the only question is
of its likely depth. The massive build-up of unsustainable global debt
since the Lehman crisis tells us to expect the liquidation to be
substantial. The coincidental combination of the peak of the credit
cycle and trade protectionism warns us of something far worse than an
ordinary recession: a possible rerun of 1929-32, only this time with
unsound currency instead of currencies freely convertible into gold.
...
https://www.goldmoney.com/rese…golden-straws-in-the-wind
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