Global Financial Crisis Coming – Japan Warns of “Lehman-Scale” Crisis At G7
By GoldCore
Global Financial Crisis Coming – Japan Warns of “Lehman-Scale” Crisis At G7
Japanese Prime Minister Shinzo Abe warned his Group of Seven counterparts on Friday that the world may on the brink of a global financial crisis on the scale of Lehman Brothers.
The Japanese Prime Minister presented data yesterday at the G7 summit he is hosting, showing that commodities prices have fallen 55 percent since 2014, the same margin they fell during the global financial crisis, interpreting this as “warning of the re-emergence of a Lehman-scale crisis”.
The Japanese Prime Minister Shinzo Abe failed in his attempt to have the G7 leaders warn of the risk of a global economic crisis in a communique issued as their summit wrapped up today in Japan.
The final statement failed to address the scale of the financial crisis facing the world today and instead gave the impression that the worst is over with somewhat Orwellian language which declared that G-7 countries “have strengthened the resilience of our economies in order to avoid falling into another crisis.”
The communique gives the impression that there is little risk due to strengthened, resilient economies when the truth is that there are significant risks facing the global financial system and the global economy. Some of which include:
• The global economy remains vulnerable to recessions and new debt crises. There are fragile recoveries in the Eurozone, UK and U.S. while Japan remains in a recession
• Financial and banking systems remains vulnerable as seen in the very sharp falls in bank shares in recent weeks. Spanish, Italian, Greek and German banks have seen sell offs
• Geopolitical risk in the Middle East (Syria, Saudi, Iran etc.), increasing tensions amongst Russia, China and western powers and the increasing spectre of terrorism and war
• The Eurozone crisis is far from resolved and there is the risk of debt crises in China, the U.S., the Eurozone and indeed the UK
• BREXIT causes a short term risk but the real risk is the poor financial fundamentals of the UK economy – total debt to GDP ratio (public and private) is over 450% and completely unsustainable.
Japan had pressed G-7 leaders to note “the risk of the global economy exceeding the normal economic cycle and falling into a crisis if we did not take appropriate policy responses in a timely manner.” However, leaders again failed to take leadership and opted for spin and again lulling their electorates into a false sense of security about the financial and economic outlook.
Rather than doing the responsible thing in this regard, there appears to have been an attempt to focus on BREXIT and to scare UK voters into not voting for a UK exit from the EU. German Chancellor Angela Merkel went as far as to say that BREXIT had not even been discussed but that there was a consensus that they wanted the UK to stay in the EU.
Yet, a 32-page declaration putatively from the G7 leaders declared that “A UK exit from the EU would reverse …read more
Source: Global Financial Crisis Coming – Japan Warns of “Lehman-Scale” Crisis At G7
