BY ALKMAN GRANITSAS, ANDREA THOMAS AND NEKTARIA STAMOULI
ATHENS—Clashes broke out in central Athens Friday as Greece’s major unions launched a 48-hour nationwide strike to protest new austerity measures demanded by the country’s creditors, adding to social tension in a country now in its fifth year of economic recession.
Hundreds of hooded youths in the main Syntagma Square in Athens attacked riot police with gasoline bombs and other projectiles, smashing objects in and around the square.
Police fired tear gas and staged running charges to scatter the youths. At least one person was detained.
With the consequences of the last global economic crisis showing little sign of ending, Greece beginning to default on its debt, stock markets remaining volatile, food and energy prices continuing to rise and the real estate bubble about to burst in China, threatening to plunge the world into further chaos, the Next Global Financial Meltdown is on its way.
In 2007, in a once-in-a-century type of event, the world experiences the biggest financial crisis since the Great Depression. First came the dotcom bubble, then the housing bubble that resulted in a global planetary financial meltdown. For the next eight years, the world economic situation is just going to get even worse: much worse.
The American Federal Reserve financial market manipulation and the incredible irresponsibility and bad judgment of the United State government and European Union combined will make banana republic inflation levels inevitable. In the next few years, we will see up to 50% unemployment rates worldwide, up to 90% stock market crash, and up to 100% annual global inflation rates. Get ready to sell everything, and pile into gold and inflation-linked securities. Get ready to cash out your life insurance policies and dump your stocks.
For the next three years, unemployment rates will be increasing drastically throughout the world and remain high up to the year2019, with extremely weak consumer spending and governments everywhere faced with lower tax revenues. Meantime, oil and food prices will continue to rise while gold and silver will reached unprecedented highs.
As a result of the Wild West Casino mentality which has characterised investment banking over the last two decades, combined with a lack of regulation. The subprime financial market was a time bomb waiting to go off and it did.
The economic crisis which began in 2007 is now showing little sign of ending if any and, for years to come, the United State will continue to spiral out of control. During the years 2015 to 2019, while China will be facing the fallout of a massive real estate bubble, the United States of America will see its credit rating further downgraded and in an unprecedented move, the dollar will be losing its status as the world’s reserve currency.
With the United State paralysed by a political deadlock over the basket of currencies in the process of replacing the dollar, the contagion affecting the euro zone, initially confined to Greece, will eventually spread throughout the continent, leading to the collapse of numerous banks, corporations and financial institutions. Bailout after bailout initiated by the European Union and industrialized countries will fail to provide an adequate long term solution to the new Global economic downturn.
The world being now mired in a full-blown depression, with no sign of a light at the end of the tunnel, with protests in many countries, a global movement for change is now emerging that will climax in the years 2015 to 2018. For the years to come, get ready to see and experience extremely volatile market conditions and frightening changes in our modern society at large. Society as we know it know is about to change.
While the gutting of our social programs is now creating a dangerously polarised society, 2019 will be mark by widespread riots and protests throughout the world.
For years, the successive governments of Greece like many others governments of the world today, have been spending money they didn’t have. As a result, the country ran up a massive deficit, reaching an estimated 13.6% by 2010.
To deal with it, Greece started to misreport its official financial statistics and actually paid hundreds of millions of dollars to banks such as Goldman Sachs to have them initiate baseless financial transactions that would hide Greece’s true level of spending and debt. All of this made Greece extremely vulnerable to a financial crisis such as the major recession that struck the world in 2007.
By 2009, Greece was collapsing under its crushing debts, by then estimated to be over $410 billion, thus growing 20% larger than the entire country economy.
The banks Greece had borrowed from were only making the problem worse: To hide the fact that Greece could soon go bankrupt, they started to charge Greece higher rates of interests when the country tried to borrow more money.
As a result, by 2010, revealing the true levels of spending and deficit that had accumulated over the years, Greece was forced to ask for outside assistance and was downgraded to the lowest credit rating in the euro zone.
With investors now viewing the country as a financial black hole, it made it difficult for the Greek government to receive outside help. Accordingly, the European Union allowed Greece to borrow from other European countries as well as the International Monetary Fund, in what became the largest bailout package in recent history. In return, Greece was forced to drastically cut back its spending.
Government corruption, large increases in taxes, and cuts to public social programs resulted in widespread civil unrest during the year 2011.
In March 2012, Greece will begin to default forcing a further restructuring in which the government will only able to pay back around half of what is owed. This will result in the country essentially being removed from the euro zone and Europe as a whole will be economically battered, along with every other countries which are now trading with Greece. The value of the euro will fall stressing the economies of the European Union with Spain, Italy and Portugal suffering the most.
Final result: the ongoing decline in value of the European currency will negatively affect stock markets around the world for years to come.