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Shaken: 10 Economic Disasters Which Threaten To Rip World Financial Markets To

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Published on 03-21-2011 Email To Friend Print Version
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Source: The Economic Collapse

2011 has already been the most memorable year in ages and we haven’t even reached April yet.
Revolutions have swept the Middle East, an unprecedented earthquake and tsunami have hit
Japan, civil war has erupted in Libya, the price of oil has been soaring and the entire globe is
teetering on the brink of economic collapse. It seems like almost everything that can be shaken is
being shaken. Unfortunately, it does not appear that things are going to settle down any time
soon. The Japanese economy has been dealt a critical blow, the European sovereign debt crisis
could flare up again at any moment and the U.S. economy could potentially plunge into another
recession by the end of the year. The global economy and world financial markets were really
struggling to recover even when things were relatively stable. If all of this global instability gets
even worse it could literally rip world financial markets apart.

Yes, things really are that bad. The mainstream media has been really busy downplaying the
economic impact of the disaster in Japan and the chaos in the Middle East, but the truth is that
these events have huge implications for the global economy. Today our world is more
interconnected than ever, so economic pain in one area of the planet is going to have a significant
effect on other areas of the globe.

The following are 10 economic disasters which could potentially rip world financial markets to
shreds….

#1 War In Libya

Do you think that the “international community” would be intervening in Libya if they did not
have a lot of oil? If you actually believe that, you might want to review the last few decades of
African history. Millions upon millions of Africans have been slaughtered by incredibly
repressive regimes and the “international community” did next to nothing about it.

But Libya is different.

Libya is the largest producer of oil in Africa.

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Apparently the revolution in Libya was not going the way it was supposed to, so the U.S. and
Europe are stepping in.

Moammar Gadhafi is vowing that this will be a “long war”, but the truth is that his forces don’t
stand a chance against NATO.

Initially we were told that NATO would just be setting up a “no fly zone”, but there have already
been reports of Libyan tank columns being assaulted and there has even been an air strike on
Moammar Gadhafi’s personal compound in Tripoli.

So since when did a “no fly zone” include an attempt to kill a foreign head of state?

Let there be no mistake – the moment that the first Tomahawk cruise missiles were launched the
United States declared war on Libya.

Already the Arab League, India, China and Russia have all objected to how this operation is being
carried out and they are alarmed about the reports of civilian casualties.

Tensions around the globe are rising once again, and that is not a good thing for the world
economy.

On a side note, does anyone recall anyone in the Obama administration even stopping for a
moment to consider whether or not they should consult the U.S. Congress before starting another
war?

The U.S. Constitution specifically requires the approval of the Congress before we go to war.

But very few people seem to care too much about what the U.S. Constitution says these days.

In any event, the flow of oil out of Libya is likely to be reduced for an extended period of time
now, and that is not going to be good for a deeply struggling global economy.

#2 Revolutions In The Middle East

Protests just seem to keep spreading to more countries in the Middle East. On Friday, five Syrian
protesters were killed by government forces in the city of Daraa. Subsequently, over the weekend
thousands of protesters reportedly stormed government buildings in that city and set them on
fire.

Things in the region just seem to get wilder and wilder.

Even in countries where the revolutions are supposed to be “over” there is still a lot of chaos.

Have you seen what has been going on in Egypt lately?

The truth is that all of North Africa and nearly the entire Middle East is aflame with revolutionary
fervor.

About the only place where revolution has not broken out is in Saudi Arabia. Of course it
probably helps that the United States and Europe don’t really want a revolution in Saudi Arabia
and the Saudis have a brutally effective secret police force.

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In any event, as long as the chaos in the Middle East continues the price of oil is likely to remain
very high, and that is not good news for the world economy.

#3 The Japanese Earthquake And Tsunami

Japan is the third largest economy in the world. When a major disaster happens in that nation it
has global implications.

The tsunami that just hit Japan was absolutely unprecedented. Vast stretches of Japan have been
more thoroughly destroyed than if they had been bombed by a foreign military power. It really
was a nation changing event.

The Japanese economy is going to be crippled for an extended period of time. But it is not just
Japan’s economy that has been deeply affected by this tragedy.

According to the Wall Street Journal, the recent disaster in Japan has caused supply chain
disruptions all over the globe….

A shortage of Japanese-built electronic parts will force GM to close a plant in

Zaragoza, Spain, on Monday and cancel shifts at a factory in Eisenach, Germany, on
Monday and Tuesday, the company said Friday.

Not only that, GM has also suspended all “nonessential” spending globally as it evaluates the
impact of this crisis.

The truth is that there are a whole host of industries that rely on parts from Japan. Supply chains
all over the world are going to have to be changed as a result of this crisis. There are going to be
some shortages of certain classes of products.

Japan is a nation that imports and exports tremendous quantities of goods. At least for a while
both imports and exports will be significantly down, and that is not good news for a world
economy that was already having a really hard time recovering from the recent economic
downturn.

#4 The Japan Nuclear Crisis

Even if the worst case scenario does not play out, the reality is that the crisis at the Fukushima Dai
-ichi nuclear plant is going to have a long lasting impact on the global economy.

Already, nuclear power projects all over the world are being rethought. The nuclear power
industry was really starting to gain some momentum in many areas of the globe, but now that has
totally changed.

But of much greater concern is the potential effect that all of this radiation will have on the
Japanese people. Radiation from the disaster at the Fukushima Dai-ichi nuclear plant is now
showing up in food and tap water in Japan as an article on the website of USA Today recently
described….

The government halted shipments of spinach from one area and raw milk from
another near the nuclear plant after tests found iodine exceeded safety limits. But the
contamination spread to spinach in three other prefectures and to more vegetables —

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canola and chrysanthemum greens. Tokyo’s tap water, where iodine turned up
Friday, now has cesium.

Hopefully the authorities in Japan will be able to get this situation under control before Tokyo is
affected too much. The truth is that Tokyo is one of the most economically important cities on
the planet.

But right now there is a lot of uncertainty surrounding Tokyo. For example, one very large
German real estate fund says that their holdings in Tokyo are now “impossible to value” and they
have suspended all customer withdrawals from the fund.

Once again, let us hope that a worst case scenario does not happen. But if we do get to the point
where most of the population had to be evacuated from Tokyo for an extended period of time it
would be absolutely devastating for the global economy.

#5 The Price Of Oil

Most people believe that the U.S. dollar is the currency of the world, but really it is oil. Without
oil, the global economy that we have constructed simply could not function.

That is why it was so alarming when the price of oil went above $100 a barrel earlier this year for
the first time since 2008. Virtually everyone agrees that if the price of oil stays high for an
extended period of time it will have a highly negative impact on the world economy.

In particular, the U.S. economy is highly, highly dependent on cheap oil. This country is really
spread out and we transport goods and services over vast distances. That is why the following
facts are so alarming….

*The average price of a gallon of gasoline in the United States is now 75 cents higher than it was
a year ago.

*In San Francisco, California, the average price of a gallon of gasoline is now $3.97.

*According to the Oil Price Information Service, U.S. drivers spent an average of $347 on
gasoline during the month of February, which was 30 percent more than a year earlier.

*According to the U.S. Energy Department, the average U.S. household will
spend approximately $700 more on gasoline in 2011 than it did during 2010.

#6 Food Inflation

Many people believe that the rapidly rising price of food has been a major factor in sparking the
revolutions that we have seen in Africa and the Middle East. When people cannot feed
themselves or their families they tend to lose it.

According to the United Nations, the global price of food hit a new all-time high earlier this year,
and the UN is expecting the price of food to continue to go up throughout the rest of this year.
Food supplies were already tight around the globe and this is certainly not going to help things.

The price of food has also been going up rapidly inside the United States. Last month the price of
food in the United States rose at the fastest rate in 36 years.

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American families are really starting to feel their budgets stretched. According to the U.S. Labor
Department, the cost of living in the United States hit a brand new all-time record high in the
month of February.

What this means is that U.S. families are going to have less discretionary income to spend at the
stores and that is bad news for the world economy.

#7 The European Sovereign Debt Crisis

Several European governments have had their debt downgraded in the past several months.
Portugal, Spain, Greece and Ireland are all in big time trouble. Several other European nations
are not far behind them.

Right now Germany seems content to bail the “weak sisters” in Europe out, but if that changes at
some point it is going to be an absolute nightmare for world financial markets.

#8 The Dying U.S. Dollar

Right now there is a lot of anxiety about the U.S. dollar. Prior to the tsunami, Japan was one of
the primary purchasers of U.S. government debt. In fact, Japan was the second-largest foreign
buyer of U.S. Treasuries last year.

But now as Japan rebuilds from this nightmare it is not going to have capital to invest overseas.
Someone else is going to have to step in and buy up all of the debt that the Japanese were buying.

Not only that, but big bond funds such as PIMCO have announced that they are stepping away
from U.S. Treasuries at least for now.

So if Japan is not buying U.S. Treasuries and bond funds such as PIMCO are not buying U.S.
Treasuries, then who is going to be buying them?

The U.S. government needs to borrow trillions of dollars this year alone to roll over existing debt
and to finance new debt. All of that borrowing has got to come from somewhere.

#9 A New Oil Spill In The Gulf Of Mexico?

As if everything above was not enough, there are reports of a possible major new oil spill in the
Gulf of Mexico. The U.S. Coast Guard is on the scene and is investigating. The following is
what a new report in the Wall Street Journal says about it….

The Coast Guard said in a news release that it received a report of a three-mile-long
rainbow sheen off the Louisiana coast just before 9:30 a.m. local time on Saturday.
Two subsequent sightings were relayed to the Coast Guard, the last of which
reported a sheen that extended from about 6 miles south of Grand Isle, La. to 100
miles offshore.

#10 The Derivatives Bubble

Most Americans do not even understand what derivatives are, but the truth is that they are one of
the biggest threats to our financial system. Some experts estimate that the worldwide derivatives
bubble is somewhere in the neighborhood of a quadrillion dollars. This bubble could burst at any
time. Right now we are watching the greatest financial casino in the history of the globe spin

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around and around and around and everyone is hoping that at some point it doesn’t stop. Today,
most money on Wall Street is not made by investing in good business ideas. Rather, most money
on Wall Street is now made by making shrewd bets. Unfortunately, at some point the casino is
going to come crashing down and the game will be over.

Most people simply do not realize how fragile the global economy is at this point.

The financial crash of 2008 was a devastating blow. The next wave of the economic crisis could
be even worse.

So what will the rest of 2011 bring?

Well, nobody knows for sure, but a lot of experts are not optimistic.

David Rosenberg, the chief economist at Gluskin Sheff and Associates, is warning that the second
half of the year could be very rough for the global economy….

“A sharp slowing in global GDP in the second half of the year cannot be ruled out.”

Let us hope that the world economy can hold together and that we can get through the rest of
2011 okay. The last thing we need is a repeat of 2008. The world could use some peace and
some time to recover.

But unfortunately, we live in a world that is becoming increasingly unstable. With the way that
the world has been lately, perhaps we should all just start to expect the unexpected.

But world financial markets do not respond well to instability and unpredictability. In fact,
investors tend to start fleeing to safety at the first signs of danger these days.

Most Americans simply have no idea how vulnerable the world financial system is at this point.
Nothing really got “fixed” after 2008. If anything, global financial markets are even more fragile
than they were back then.

So what do all of you think about the state of the global economy? Please feel free to leave a
comment with your opinion below….

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Mthompso 17 hours ago

Its my belief that The Globalists are slowly accomplishing exactly what they have planned for years. Without all the wars, uprisings,
and devaluing of currencies, crashing of economies, and yes, seemingly "natural" disasters, they would not be able to usher in their New
World Order. Wake up, America, and the rest of the world. This all being purposfully caused and has been orchestrated according to
their plan-do some research on the so-called "conspiracy theories". Not theories so much anymore. Its all being played out exactly
according to plan. Do the research and find out for yourself...Don't know where to start? HAARP( causing natural disasters) "What in
the world are they spraying?" and "Monsanto GMO plans" (for food shortages) "New world order" (for the evil globalist plans to crash
all economies and create the one world government) and lastly, "FEMA Camps in USA". Look them up on Youtube, and google
searches and you will find out for yourself there is nothing we can do. It WILL play out according to plan, no matter who you elect,
how much you protest-no matter what. Read Ezekial 38, 39, and Revelation in the Bible. There will be a mass disappearance of people-
Christians- called the Rapture. When this happens the world will freak and totally fall apart. Then the antichrist will come into power,
be head of the New World order, the one world govt, etc The Great Tribulation begins as soon as the antichrist signs a 7 year peace
treaty with Israel... GET READY-this will all take place sooner that we think.

Like Reply

Mthompso 17 hours ago

Its my belief that The Globalists are slowly accomplishing exactly what they have planned for years. Without all the wars, uprisings,
and devaluing of currencies, crashing of economies, and yes, seemingly "natural" disasters, they would not be able to usher in their New
World Order. Wake up, America, and the rest of the world. This all being purposfully caused and has been orchestrated according to
their plan-do some research on the so-called "conspiracy theories". Not theories so much anymore. Its all being played out exactly
according to plan. Do the research and find out for yourself...Don't know where to start? HAARP( causing natural disasters) "What in
the world are they spraying?" and "Monsanto GMO plans" (for food shortages) "New world order" (for the evil globalist plans to crash
all economies and create the one world government) and lastly, "FEMA Camps in USA". Look them up on Youtube, and google
searches and you will find out for yourself there is nothing we can do. It WILL play out according to plan, no matter who you elect,
how much you protest-no matter what. Read Ezekial 38, 39, and Revelation in the Bible. There will be a mass disappearance of people-
Christians- called the Rapture. When this happens the world will freak and totally fall apart. Then the antichrist will come into power,
be head of the New World order, the one world govt, etc The Great Tribulation begins as soon as the antichrist signs a 7 year peace
treaty with Israel... GET READY-this will all take place sooner that we think.

Like Reply

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1doggie 16 hours ago in reply to Mthompso

You give humans way too much credit. People didn't design this mess, it is just happening as a response. Put a fire out here,build
a reactor there is cause and effect not design by a nebulous power elite. And don't forget the bible was written by men for man. I
don't trust anyone who speaks for whatever god they favor.

Like Reply

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