Where is the Systemic Crisis now in 2010-11, are we on the way out?

In response to the heading, it depends upon how you interpret the phrase "on the way out". Let's look at the facts. Deflation has taken hold of the world's GWP to the tune of -12% in 2009-10. The US is in a deflationary spiral. Whilst the UK is showing some inflationary conditions, and is throwing sugar coated sovereign debt at the diabetic Deflationary Monster. Where do I see the outcome? Where it has been since 2008, knowing the situation of the financial system of the Central Banking Cartels. The system is bankrupt. The global financial system of capital is completely fraudulent. This is not a politically extremist statement this is an informed objective summary of the state of global finance.

Players in the Crisis.
I see the attempts by Governments and Central Banks who are trying to retake control of the failed financial system of capital, which has developed into a struggle to control and regain control and power. The Systemic controllers and currency value manipulators (Central Banking Cartels and International merchant Banks, Forex and Stock Market players et.al and Industrial Cartels) and the State system, which unlike the bracketed group have civil society to answer too in addition to those groups. The reality is, they (governments) are armatures (prefects' with a badge), part timers, in the art of government and finance. They have no control over their real masters who control the flow of money, and sit in Foundations around the world, philosophising on public policy, the state and money; old money only infer to such subjects.

Quantitative Easing Crisis Response.
So what does the future hold for the West? The Central Banking System and BIS, is doing what they were created to do, to inflate the Fiat Currencies of the world. Even if the Global GWP grows over the next year or two (from its present decline), it will be the result of the East not the West. I see more real deflation (even if Governments become the national employer). Sovereign Debt will continue to rise at an unprecedented rate over the coming years. BIS's national Central Banks with their Quantitative Easing programme have become the Caboose and the coal mine for the economic engine. Whilst this action has helped the Banksters and their minions, it will only rob the average man, woman and child of their comfort -and their futures. I said back in 2008 that, "the inflation of the 1970s will look quite tame" and it will! The interest rate issue will also need to be added to this pot, once cheap money and the BIS stop buying Bonds/Securities and look for private market buyers through improved incentives and their guarantees must be assured. The present Bond Market is already showing explosive fuses and from every marketable type of Bond that is T-Bills and Bonds.

Interest Rates.
By the BIS inflating currencies as is their primary role in life, as previously stated. Their logic is as follows. Monetary Inflation takes place annually in good times, but, whilst the system is debt ridden, QE is the natural mechanism of the central bank, allowing the debt to become both cheaper and payable. The objective is, as the servicing of debt becomes overwhelming to the groups (Banks, Commercial and public as well as private borrowers), by a QE policy you reduce the debt to the Banks and the commercial, public or government groups, with new money. This in tern reduces the value of products and services so increasing the cost to the public. Ironically, the people in turn are expected to produce the market's insulin with their transacting, which will become scarce under such deflationary conditions. Also, reducing their risk of defaulting on their recorded debt with banks et.al. With low interest rates for the banks and high interests for the public, comparatively, lenders gain some control of the system of debt default and can adjust their pressure on the risks.

Deflation and summary.
The double hammer on the cards and unaccounted for by the BIS's system of money control and inflationary policy is the [deflationary hammer]. If the system continues to see deflation and particularly if government interference can not halt the continuing deflation of real GDP, and monetary inflation continues, then, the system has a real risk of collapsing.

What is quite obvious when you consider the facts. How can you have a reduction in production -and labour value, whilst still servicing your debts at a time of inflation? This can only have one outcome under such circumstances DEFAULT. But, when that combination of excessive sovereign debt, debt ridden finance system, systemic market fraud and public debt. And yes there is more. Deflationary market economy, with an economic depression and quantitative easing programme, buying state debt and devaluing the products and services and producing inflation when real incomes are going down. Do I need to say more? Can you see these elements in our western liberal societies. Can you see the markets going back to pre 2007 excesses? I see a real possibility of 20-25% deflation in the West, in real terms on previous output, when you recall production during the credit and debt accumulation period, when both were in vogue.

The East has all the cheap labour and internal markets among themselves. The UK and US and Europe in general, though not so for Europe's Germany, will continue to have balance of trade issues, due to their poorly competitive export products, untrusted and out of vogue, at the table of exports. Equally bad too, after seeing the corruption in the West's finance system the East have no reason to trust the finance services coming to them from the West, where some have already flown off to new markets. Those fresh Eastern markets will be where the West's new Head Offices reside in the future, adding to the Hedge Fund Manager and Bankers already there. In addition to well educated and locally speaking cheap general labour, who are on tap. The developing and new Cartels will be centring themselves in the East in the future, on a flight from the West. It's worth taking a look at my 2008 posts and look for the options and choices to be made.