Beginning Of Phase 5 Of The Total Systemic Crisis (LEAP/E2020)

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The phase of world geopolitical dislocation

Public Official statement Global Europe Anticipation Bulletin N°32

Feb. 15, 2009 (LEAP/E2020) -- Since February 2006, LEAP/E2020 had estimated that the total systemic crisis would proceed according to four great structuring phases, namely the phases of release, acceleration, impact and decantation.

This process described the events until today well. But our team estimates henceforth that the incapacity of world leaders to take the measurement of the crisis, one of the chief features of which is their eagerness for more than the past year to treat the consequences of the crisis instead of attacking its causes radically, will insert the total systemic crisis in a fifth phase starting in the Fourth Quarter of 2009: the phase known as that of world geopolitical dislocation.

According to LEAP/E2020, this new phase of the crisis will be thus worked by two major phenomena organizing the events in two parallel sequences, namely:

   A. Two major phenomena:
   1. The disappearance of the financial base (Dollars + Debts) on the whole of planet
   2. The accelerated fragmentation of the interests of the main actors of the total system and the great world units

   B. Two parallel sequences:
   1. Fast decomposition of the whole of the current international system
   2. The strategic dislocation of large total actors.

We had hoped that the phase of decantation would make it possible for the leaders of the whole world to draw the conclusions from the collapse of the system that has organized the planet since the end of World War II. Alas, at this stage, there is no reason to be optimistic on the matter (1). In the United States as in Europe, China or in Japan, the leaders persist in making as if the total system in question were only victim of a momentary breakdown and that it is enough to add quantity of fuels to it (liquidities) and other ingredients (lowers rate, acquisitions of toxic new assets, revival programs of industries in quasi-bankruptcy,…) to make set out again the machine. However, and it is well the direction of the term of “total systemic crisis” created by LEAP/E2020 as of February 2006, the total system is from now on out of use. It is necessary to rebuild new instead of trying to save what no longer can exist.

Evolution of the orders to industry during the 4° quarter 2008 (Japan, the United States, euro area, the United Kingdom, China, India) - Sources: MarketOracle/JPMorgan

This fifth phase of the crisis thus will start this process of rebuilding but in a brutal way, by the complete dislocation of the preexistent system. And the two parallel sequences, described in this GEAB N°32, which will organize the events, promise to be particularly tragic for several large world actors.

According to LEAP/E2020, there remains nothing any more than one very small chance to try to avoid the worst, namely the four months to come, from here to summer 2009. Very concretely, the Summit of G20 of April 2009 constitutes according to our team the last chance to reorientate in a constructive way the forces in action, i.e. before the sequence suspension of payment of the United Kingdom, then of the United States does not get going (2). Or else, they will lose any control of the events (3), including, for a number of them, in their own countries, while the planet will enter this phase of geopolitical dislocation to the manner of a “drunk boat.” At the conclusion of this phase of geopolitical dislocation, the world is likely to resemble Europe of 1913 more than the planet of 2007.

Thus, by trying to always carry on their shoulders the weight crescent of the crisis in progress, the majority of the States concerned, including the most powerful, did not realize that they were organizing their own crushing under the weight of History, forgetting that they were only human constructions, surviving only because the interest of the greatest number was found there. In this number 32 of the GEAB, LEAP/E2020 thus chose to anticipate the consequences of this phase of geopolitical dislocation on the United States and the EU.

Evolution of the monetary base of the United States - (12/2002 - 12/2008) - US Source Federal Reserve/DollarDaze

It is thus time for the people as well as for the socio-economic actors to prepare to face one very difficult period which will see whole pieces of our companies, such as one knows them, being strongly affected (4), even quite simply to disappear temporarily or even in certain cases durably. Thus, the rupture of the world monetary system during the summer 2009 not only will involve one collapse of the U.S. Dollar (and of the value of all the credits made out in USD), but it also will induce by psychological contagion a loss of confidence generalized in the fiduciary currencies.

Last but not least, our team considers from now on that in fact the political entities (5) most monolithic, more “imperial,” will be most seriously upset during this fifth phase of the crisis. Geopolitical dislocation thus will apply in states that will know a true strategic dislocation calling into question their territorial integrity and the whole of their zones of influences in the world. Other states, consequently, will be projected brutally out of situations protected to plunge in regional chaos.

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Notes:

(1) Barak Obama like Nicolas Sarkozy or Gordon Brown spend their time calling upon the historical dimension of the crisis for better hiding their incomprehension of his nature and trying to clear itself in advance of the failure of their policies. As for the others, they prefer to be convinced that all that will be regulated like engineering problems a little more serious than usually. And all this small world continuous to play according to the rules which they know since of the decades, without realizing that the play is disappearing under their eyes.

(2) See preceding GEAB.

(3) In fact it is even probable that G20 will have increasing difficulties with quite simply being able to meet, on bottom of “every man for himself”.

(4) Source: NewYork Times, 14/02/2009

(5) And that also appears true to us for the companies.