Are we headed for a decade-long global depression?

By Hanne Nabintu Herland

The world has entered a geopolitical depression, writes Dr. Nouriel Roubini, pointing at severe megathreats that spell dark days ahead. This new era will resemble the tumultuous decades between 1914 and 1945, as the U.S. economic, financial and security unipolar world is challenged by four powers – China, Russia, Iran and North Korea.

“There is a sharply rising risk not only of war among great powers but of a nuclear conflict,” the professor of economics at Stern School of Business states in a recent article at Project Syndicate: “Geopolitical conflicts and national-security concerns are fueling trade-, financial-, and technology wars, and accelerating the deglobalization process. The return of protectionism and the Sino-American decoupling will leave the global economy, supply chains, and markets more balkanized and fragmented. The buzzwords ‘friend-shoring’ and ‘secure and fair trade’ have replaced ‘offshoring’ and ‘free trade.'” In addition, Roubini notes, “energy security” has quickly replaced non-financial factors such as “net-zero” and ESG “greenwishing.”

Dr. Roubini, the man who foresaw the 2007 housing market crisis long before others, has warned of stagflation for almost two years due to the current mix of loose monetary, credit and fiscal policies. Dr. Roubini’s new book, “Megathreats,” predicts a decade of world depression in which the regular workers will suffer the most and inequality will rise globally. We are up for the worst debt crisis the world has ever seen and a possible hard-landing scenario.

High inflation primarily driven by extreme energy cost and steep recession now threaten macroeconomics. The shock of the COVID-19 lockdowns and economic shutdowns have spectacularly halted economic growth, plunged governments into serious debt, crippled the supply of goods through the bottlenecks in global supply chains – and everything made much worse by the China’s zero- COVID policy. Meanwhile, the globalist billionaire class’ fortunes have – predictably enough – skyrocketed.

When facing Russia’s invasion of Ukraine, European leaders have been incomprehensibly shortsighted and forthright suicidal in pushing to implement sanctions against the very source of energy upon which they depend. Europe has chosen to cripple itself. These leaders needed not even one day to reflect upon how sanctions would affect Europe. As quickly as the day after the Russian invasion of Ukraine, they rushed to implement them.

It is not given who the weaponization of the U.S. dollar – using the American reserve currency status to punish Russia through sanctions – will hurt the most. It certainly has accelerated the speed in which non-Western nations are resorting to local currencies, turning away from politically weaponized Western institutions. The trust in Western banks where one’s money was considered safe, the SWIFT system and other before deemed reliable sources for economic stability, is plunging. The world protest against the American hegemony is painstakingly illustrated by the 85% of the global population refusing to sanction Russia. Russia, on the other hand, is swimming in money from the skyrocketing energy prices, its 2022 energy export revenues predicted to be 337.5 billion USD, around 40% more than 2021. In short, Europe is financing Russia’s Ukraine war.

The Ukraine operation has brutally demonstrated that Europe’s bureaucratic leaders are weaker than ever, serving American interests even if it plunges Europe into oblivion. America’s neoconservative mission in the post-Cold War era has been to ensure that no rival superpower is allowed to emerge in Western Europe, Asia or in the former Soviet Union. This according to the Pentagon’s plan: “Prevent the Re-Emergence of a New Rival.” One may certainly say that the strategy has succeeded.

Germany and Europe are now being forced into a depression and a de-industrialization as a result of the sanctions the Americans have told them to impose on Russia, writes Dr. Michael Hudson, president of The Institute for the Study of Long-Term Economic Trends (ISLET).

Germany suffers the most. It has been Europe’s most advanced industrial economy, its steel, chemicals and car industry depending on import of Russian commodities, oil and gas, Dr. Hudson points out.

The Nord Stream pipelines were built in order to provide cheap energy to its vast industries. Yet, Germany has been told by the Americans to cut itself off from Russian natural resources, de-industrialize and pay three times as much for American LNG. This means the end of Germany’s economic preeminence. This happens while the United States is freely importing oil from Russia via Italy, as it is exempt from the very same sanctions imposed on Russian oil and natural resources in Europe, Hudson adds.

Soon defaulted mortgages and excess debt will produce a landslide in private property ownership loss. This is truly going to be a horrible scenario – causing soaring profits and buying opportunities for the billionaire class – again.

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