Tuesday, February 21, 2006

Major world crisis ahead?

The Laboratoire européen d’Anticipation Politique Europe 2020 now estimates to over 80% the probability that the week of March 20-26, 2006 will be the beginning of the most significant political crisis the world has known since the Fall of the Iron Curtain in 1989, together with an economic and financial crisis of a scope comparable with that of 1929. This last week of March 2006 will be the turning-point of a number of critical developments, resulting in an acceleration of all the factors leading to a major crisis, disregard any American or Israeli military intervention against Iran. In case such an intervention is conducted, the probability of a major crisis to start rises up to 100%.

What are the two characteristics of this crisis?
"As some insitutions claim, this crisis results from the analysis of decisions taken by the two key-actors of the main on-going international crisis, i.e. the United States and Iran:
- on the one hand there is the Iranian decision of opening the first oil bourse priced in Euros on March 20th, 2006 in Teheran, available to all oil producers of the region. Iran's opening of an Oil Bourse priced in Euros at the end of March 2006 will be the end of the monopoly of the Dollar on the global oil market. The immediate result is likely to upset the international currency market as producing countries will be able to charge their production in Euros also. In parallel, European countries in particular will be able to buy oil directly in their own currency without going though the Dollar. Concretely speaking, in both cases this means that a lesser number of economic actors will need a lesser number of Dollars. This double development will thus head to the same direction, i.e. a very significant reduction of the importance of the Dollar as the international reserve currency, and therefore a significant and sustainable weakening of the American currency, in particular compared to the Euro. The most conservative evaluations give €1 to $1,30 US Dollar by the end of 2006. But if the crisis reaches the scope anticipated by LEAP/E2020, estimates of €1 for $1,70 in 2007 are no longer unrealistic.

- On the other hand, there is the decision of the American Federal Reserve to stop publishing M3 figures (the most reliable indicator on the amount of dollars circulating in the world) from March 23, 2006 onward. Why is this important? Well, since printing paper money is nothing short of counterfeiting, the issuer of the international currency must always be the country with the military might to guarantee control over the system. This magnificent scheme seems the perfect system for obtaining perpetual wealth for the country that issues the de facto world currency. The one problem, however, is that such a system destroys the character of the counterfeiting nation’s people-- just as was the case when gold was the currency and it was obtained by conquering other nations. And this destroys the incentive to save and produce, while encouraging debt and runaway welfare.

The American and Iranian decisions coming into effect during the last week of March 2006, will catalyse and turn into a total crisis seven sector-based crises affecting the whole planet in the political, economic and financial fields, as well as in the military field most probably too: loss of confidence in the Dollar, explosion of the US financial imbalances, oil crisis, end of the global US leadership, distrust towards the Arab-Muslim world, inefficiency of the global governance, and uncertainties about the European governance... "

Taken from 2020 European Laboratory of Political Anticipation (www.europe2020.org/en/section_global/150206.htm)


At 7:14 PM, Blogger Jernej Letnar said...

Dejan raised very interesting issue. I agree that is highly likely that will come to oil crisis especially with Iran being the world fourth largest producer of oil. If that happens, it will be already the third oil crisis of such a nature. There were already two oil crisis in 1973 and 1979, with both being connected with some questions of Middle East Conflict. But the interesting point may be that in 1979 follwing the lower production of Iran, Saudi Arabia and other OPEC nations increased production to offset the decline, and the total loss in production was just about 4%. However, the thing that happened was a widespread panic resulted, driving the price far higher than would be expected under normal circumstances. Jernej


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