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Tuesday, August 28, 2012

Economic Collapse Update 082812 - Global Economy has already collapsed Part.1

Hello and Welcome: This is Paul Sandhu on Tue. Aug. 28 coming to you with an Economic Collapse News update. Many folks who are more informed than the average person have been expecting an Economic collapse for some time now, especially since 2008. However, I recently had an awakening that the Collapse has already happened, what awaits the world are the consequences of this collapse. A recent story on the collapse of manufacturing in China, and to a lesser extent in Japan, Europe and the US made me realize that there has been no recovery in the past 4 years despite the largest dose of monetary stimulus applied globally in the history of the world. The problem can be summed up in one word: GROWTH. The fact is that the Global Economy cannot grow perpetually, at some point it has to reach its limits. It would appear that this limit was reached back in 2007-2008 and since then the Global Economy has been in recession. Recession is like an ocean tide; high tide does not last perpetually, sooner or later the tide recedes and there is a Recession. Just like it is impossible to maintain a high tide forever, it is impossible to keep the Global Economy growing forever.
Rather than recognize the fact that the world’s manufacturing capacity had reached its limits back in 2007, the powers that be, which are essentially bankers and politicians, stuck their heads in the sand and took measures to maintain the illusion of growth knowing full well that no further growth was possible, at least for a number of years. Ayn Rand once said that you can deny reality but you cannot deny the consequences of denying reality; so although the bankers and their politician employees have denied reality for the past 4 years, the fact remains that the consequences of denying this reality would overtake them sooner or later. It appears that we have now reached the point in time where the consequences of their disastrous policies are becoming impossible to hide. To illustrate this point let me point you in the direction of a Forbes article on the collapse of manufacturing in China and China’s future Economic prospects. While China is an extreme example, the same consequences are waiting in the wings for the rest of the world, the US in particular. Manufacturing needs to contract dramatically, which means that the Global Economy needs to shrink year after year until equilibrium between manufacturing and consumption is once again restored.
If manufacturing is artificially maintained at high levels, as in China, where not just goods for which there is no market are being manufactured non-stop, but whole cities have been built for which there are no inhabitants. This did happen to the US to a lesser extent where millions of houses and condos were built during the boom years of 2002-2007 for which there were no buyers; this is also happening in Canada where residential units are being added at a much faster pace than they can possibly be sold, and this is being done to maintain a business model which requires much greater consumption than the Economy needs. The problem is over manufacturing everywhere but it seems that the end is now in sight. This game had to come to an end sooner or later and it would appear that the end has arrived, at least for China, Japan and Europe, with the US next in line!
Let me read through this Forbes report which reveals the true state of the Chinese Economy. For years I have maintained that the China-India miracle Economic growth stories were hoaxes and it seems that the MSM is finally catching on. What awaits both these nations is social unrest of the kind not seen not seen since before WWII. And just as the Depression and Economic Collapse of the 30’s led to World War in the 40’s, so too must the Depression that began in the first decade of the 2000’s lead to World War 3 in the second decade of this century! 

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