In his latest issue of the Trends Journal (Winter 2010), trend forecaster Gerald Celente discusses the economic ramifications of a global commercial real estate meltdown, sovereign defaults and government rescue programs.
“There is no recovery. The only real economic question facing the world is: Will the economic bottom fall out all at once or will it be a chain reaction? The guillotine, or death by a thousand cuts?
The Trends Research Institute cannot predict what undreamed-of schemes central banks and governments will dream up this time to bail out the toobig-to-fail financial fraudsters, and artificially prop up sagging economies, thereby taking on more debt.
What we can predict is that the commercial real estate collapse, which we forecast for 2009, will intensify in 2010. Though briefly forestalled by government intervention (in the US, TARP, TALF, American Recovery and Reinvestment Act, etc.), the Dubai World debacle is a resounding signal that commercial is crashing. Neither â€œcontainedâ€ nor isolated, as alleged, the world is awash in Dubai World clones: overbuilt developments with no possibility of renting and therefore no possibility of paying off highly-leveraged loans. ($3.1 trillion of debt finances the estimated $6.5 trillion of commercial real estate in the US alone.)
When commercial real estate collapses, the props will be pulled out from under the banks holding the loans. Absent governments coming to the rescue with more prop trillions, the shock from the free-falling commercial sector will irreparably damage the equity markets and reverse modest gains made possible by central bank interventions.”
With the trillions of dollars at their disposal the powers that be could continue to kick the can down the road for a while longer, so a prolonged deep depression is not out of the question. In fact, we believe that this depression will last for at least the rest of this decade, if not longer, so we’re going to feel the pain regardless.
A collapse unlike any that has been seen in modern times is coming our way, and we’re not just talking about the stock market here. This being the case, it is irrelevant whether it happens this year, or in 2012, or 2015. Prepare for both of the possible collapse scenarios now by securing your wealth, protecting your family, and adapting your mind set for what’s to come.