Wednesday, 7 December 2011

The X Factor

The world is flooded in debt. IMF, ECB, Uncle Sam & Aunt Merkel are protecting the indebted countries and in hope that the measures or actions being taken by them would help those economy to get a boost. We are living in this real-time experiment of how to destroy what once was a good international financial system. Things can get worse because 'X' factor can always happen. Here is a list of possible values that 'X' can be equals to:

1. Greece may fail & defaults, and exits this common currency experiment

2. Italian bond yields doubles from and spikes to 15%

3. Big Banks tumble again

4. France losses its Triple-A rating

5. The EFSF structure fails

6. Germany says no and really means it this time

7. Common currency goes into the history books with rest of monetary policies

8. Global growth crushes down

9. China gets hammered accordingly and its real estate bubble, commodities bubble, social bubble pop all at once

10. US enters deep recession and QE3 doesn’t matter just like the last two didn’t

11. The Dow Jones Industrial Average heads toward 5,000

12. US social unrest manifests in serious violence

13. Global deflation ascends as all central banks are finally seen for what they are—useless at best, dangerous at worst—as all they do is screw up the market process

14. Finally the world’s leverage is reduced as debts deflate


Oops, I was too cruel. And hopefully very wrong, but if you have been paying attention I think you have to admit apparently few of the events have some possibility.

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