Bank of America, Lagarde, Merkel, Soros foreshadow a global crisis in unison
Bank of America, Lagarde, Merkel, Soros foreshadow a global crisis in unison

Bank of America probably shot the brightest. Most recently, on July 3, Bloomberg reported, analysts from the financial institution said: "The strong US growth, the flattening of the bond yield curve, the shrinking emerging markets - all this sounds like an echo of the events of 20 years ago." That is, overseas they stress that the new crisis may be similar to the crisis not in 2008, but in 1997-98.

Earlier, on May 29, George Soros, during a speech in Paris, called “the growth of populism in the EU countries, the refugee crisis, the desire of investors to take money from emerging markets” as bad signals. Again this is the phrase "emerging markets" - and this is us too. More words from Soros: "It is possible that we are heading for a new major financial crisis."

Christine Lagarde, IMF manager, also considers the crisis to be inevitable, but, however, sees another reason. She calls huge sovereign debts one of the main problems. Let me remind you that it is the United States that is the leader in this area; it owes the world about 20 trillion dollars.

German Chancellor Angela Merkel is also confident that the crisis cannot be avoided, but sees the reason in the current trade restrictions, which will escalate into a trade war. Her conclusion: "Therefore, the financial crisis will not be long in coming."

Question: is this some kind of campaign - or are these people from different sides, but honestly state the reality?

Commentary by Valentin Katasonov

The heralds of the crisis named completely different crises. The point is that there are financial crises, there are economic crises, there are banking crises, there are debt crises. Of course, they are all interconnected, one flows into the other, one provokes the other. What Mr. Soros said is not a sensation at all. Everyone knows very well and knew that the preconditions for the second wave of the global financial crisis were ripe and even overripe. This is not a new crisis, this is a continuation of the crisis that broke out in 2008 (some even date the beginning of 2007) and which seems to have ended in 2009. I would say this: it was an acute phase of the crisis, and the causes of the crisis have not gone anywhere. And for several years now I have been saying that the preconditions are emerging for the second wave of the global financial crisis.

I didn’t really understand why America suddenly remembered the 1998 crisis. As far as I understand, there was a crisis in Southeast Asia then. The point is that the financial crisis in that region of the world is a special crisis. This is, firstly, a regional crisis. Secondly, it is a crisis that was triggered by financial speculators who raided a number of Asian countries and collapsed their currencies. By the way, according to one of the versions, one of the participants - in fact, even the organizer - of this raid of currency speculators was George Soros.

Crisis 2007-2009 was not due to some purposeful actions of financial speculators who “make good money” on the collapses of national currencies. This crisis was caused by imbalances in the global financial system. And the main imbalance is the level of debt. Moreover, one must bear in mind not only sovereign debt, but also other types of debts. These are debts of banks, debts of non-financial companies, debts of the household sector. I must say that two years ago the well-known consulting company McKinsey published a rather interesting report on the debt situation in the world. I even made several publications of this report with my comments.Even then, McKinsey warned that the level of total debt for major countries and regions of the world exceeded the level of 2007. And this is already a serious signal, this is no longer a bell - this is already an alarm bell. The McKinsey report identifies three main possible epicenters for a second wave of the global financial crisis. The first epicenter is the United States of America, from where, as we know, the first wave of the crisis began 11 years ago in connection with the collapse in the mortgage securities market. The second epicenter is Europe, especially the EU. In the United States, the relative level of total debt has approached the level of 300% of gross domestic product, in Europe it has also approached this indicator.

But the third epicenter is a new one, which did not exist in 2007. This is China. In China, according to McKinsey, the relative level of debt is also close to 300% of gross domestic product. I would like to focus specifically on China, because in the recent past, McKinsey could not take into account all the issues related to the PRC. The fact is that the so-called "shadow banking" is very developed in China. Shadow banking is not some kind of clandestine office that gives loans to citizens without collateral, as is customary in Russia. No, in China, shadow banking is a fairly respectable company, funds, insurance companies that simply give loans to each other and to enterprises in the real sector of the economy. But these lending activities are not controlled by financial regulators, and most of all by the People's Bank of China. Of course, shadow banking is available today in all countries of the world, but on a large scale it is a Chinese specificity. In no other country has shadow banking reached such proportions as in China. Therefore, taking into account shadow banking, experts say that the level of relative debt in China has already exceeded the bar of 600% of GDP.

From which of the three epicenters the second wave of the crisis will emerge is difficult to say. But it is obvious that she will go. And there is no need to refer to George Soros or Bank of America. Any competent financier knows this and so.

I would also like to say the following. Despite the fact that today the heads of international financial organizations in the person of, say, Christine Lagarde do indeed warn of the possibility of a second wave of the financial crisis - they are not proposing any specific measures. The fact is that the IMF is a conductor of the "Washington Consensus" policy - this is a policy of liberalism, which requires the removal of the state from managing the economy, finances, and so on. And the policy related to the lifting of any restrictions on capital flows. So, the most elementary way to deal with the financial crisis is to impose restrictions on cross-border capital movement. Ms. Lagarde, instead of panicking and stating obvious signs of the approaching second wave of the financial crisis, should have honestly told what the IMF member countries should do. But this is exactly what she does not do. Taking this opportunity, I would like to say that for Russia a means of protection against the giant wave of the global financial tsunami can be a wall called "restrictions and bans on cross-border capital movement." Any competent economist knows this very well. Therefore, we will take the opportunity of this publication and give a signal to “our” authorities. Why is "our" in quotation marks? It is clear that they are also the conductors of the same policy of the "Washington Consensus". But at least society should know that there is no fatalism here.

And we must remind our young listeners who hardly remember the events of 20 years ago: in 1998, in order to save the Yeltsin regime, the authorities resorted to an instrument of limiting the cross-border movement of capital. Although she really did not want to, but for the sake of self-salvation I went for it.

The 1998 crisis in Russia is a very specific crisis. Today, thank God, Russia is not threatened with such a crisis.Because that crisis (we call it the "default of 1998") was connected with the fact that the Ministry of Finance under the leadership of Chubais issued unlimited volumes of debt securities, and the inevitable collapse of the pyramid took place. Today, the level of Russia's sovereign debt is not that great. Moreover, the West helps here by prohibiting the purchase of Russian debt by Western investors. So for the Russian Federation, it is not worth drawing a parallel with the 98th.

Before me is a text from one very pro-government site. They are just talking about the consequences of the future wave of the crisis for Russia: "The situation looks so that for Russia the consequences of a possible recession will be much milder both for citizens and for the country's economy as a whole." The conclusion is as follows: "Those who are best prepared for it will suffer least of all from the crisis, therefore, regardless of how the situation in the world develops, Russia should continue to build up its reserves." And we remember the crisis of 2008-2009 very well. in Russia, when we also had huge foreign exchange reserves accumulated by President Putin, and Prime Minister Putin used them to support the banks. And the banks took out and hid in offshores the money received from the state, taken from the reserves. In this case, how should we treat the recommendation: in order for the new financial crisis to pass painlessly for us, we need to continue following the Kudrin-Siluanian path?

This is complete nonsense. After all, the economy is like a human body. Any doctor, even the most qualified doctor, is not able to tell how this or that disease will develop. Here, completely different cause-and-effect relationships, various combinations are possible. Therefore, a physician can only recommend some measures to improve the health of the body, etc. So all the talk about "soft consequences" and "building up reserves" are just such psychotherapeutic mantras. I remember 2008, when the then Minister of Finance Alexei Kudrin said that "a financial crisis is already beginning in the West, and Russia is an island of stability." It was in May. And in August 2008, this "island of stability" was already covered by the wave of the financial tsunami. Moreover, when the crisis had already ended, experts came to the conclusion that the depth of the consequences of the financial crisis for Russia was even more serious than for America, the epicenter of this financial crisis. Therefore, I do not even want to comment on the chatter of the leaders of the financial and economic bloc and their court journalists.

About ten-year cycles. After all, years, including any cycles of years, are astronomical phenomena. What kind of astrology of crises do we observe? How does this generally relate to financial and economic activities?

The movement of stars and planets has nothing to do with it. Here I have to remember the work of Karl Marx "Capital". There he substantiated the cyclical development of the capitalist economy. Actually, the economic cycle of the capitalist economy includes 4 phases. There is absolutely no mysticism and kabbalism there, because we are talking simply about the period of accumulation of debts. Purely mathematically, it turns out that imbalances accumulate and develop into a crisis at regular intervals. If we look at the statistics, at the history of the issue, we will see that the average cycle time was about 10-15 years. But the problem is that Marx wrote about crises of overproduction - about crises in the real sector of the economy. And today we are dealing with virtual financial crises. It is still impossible to build any special logic here, there is still no sufficient empirical material. And I think that it will never happen, because the second or third wave of the global financial crisis can finally destroy humanity.

Nevertheless, the frequency of 10 years, I can very simply explain. Crisis - what is it? A crisis is a partial write-off of certain obligations, certain debts. There is a partial restoration of equilibrium, balance in the economy.After a while, in an economy built on usurious interest, the buildup of monetary obligations begins again. These liabilities always exceed the amount of money in circulation - because money is credit. Suppose we issued money in the amount of 1 million monetary units - but there is also money that came into circulation in the form of a loan. This means that a million monetary units are circulating in the economy, but at the same time the obligations that arose as a result of issuing a loan amount to, say, 1.5 million. It is clear that one can engage in debt refinancing and for some time the illusion of economic stability will be created. But at some point in time, moneylenders, creditors say: "We will not give you any more credit." And also there is no mysticism here. They give loans as long as there is collateral. They are building a pyramid of debt, while they have some guarantees of repayment of loans issued. When these guarantees are exhausted, then this is the point, the debt pyramid collapses. This is how this cycle works.

Isn't there still a completely conscious moment here? Let's imagine that the owners of money perceive laboring mankind as livestock from which one can obtain a certain product - meat, wool or milk. The cycle of a cow between milkings is ten hours. She should go to the pasture and refill her udder. The cycle for meat production is naturally longer. A calf or pig should build up meat and fat in months. And thus, one cannot say that crises do not depend on the will of people, but quite the opposite - they depend only on this will. They cut off the monetary and resource wool, especially from developing countries, which suffer the most (the so-called "developing", but in fact underdeveloped or artificially abandoned, like our country, into underdevelopment), milked, part of the herd was allowed for meat, and the remains sent again to graze in the meadows until the next round of the global financial and economic crisis.

The way it is. This is the figuratively expressed nature of this cycle. By the way, how does usury justify itself? Like, look at the cattle: after all, they give birth to some kind of offspring. Interest is an analogue of the very offspring that, say, a cow or a horse gives us. In the same way, money multiplies. In general, there are many different parallels here. The word capitalism itself comes from the Latin word "caput" (head). In fact, capital is the head of a cattle (also the Latin-Russian dictionary says that "capital is a veil worn by priestesses on the head during sacrifices and a serious criminal offense, mainly punishable by death" - there is reason for thought). In the ancient world, wealth was measured by the number of livestock. Paradoxically, modern capitalism can be imagined as the criminal possession of a certain herd of animals that provide milk. Then, when they no longer effectively perform their functions, they are sent to the slaughterhouse for meat and skins. Unsuitable and for this they are processed into soap.

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