Economists at the United Nations are predicting the greatest debt jubilee in history.
- Prediction: The third leg of the world's intractable depression is yet to come.
- If trade economists at the United Nations are right, the next traumatic episode may entail the greatest debt jubilee in history.
- May also prove to be the definitive crisis of globalized capitalism, the demise of the liberal free-market orthodoxies promoted for almost forty years by the Bretton Woods institutions, the OECD, and the Davos fraternity.
- UN Conference on Trade and Development (UNCTAD) annual report: ”Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion. Damaging deflationary spirals cannot be ruled out.”
- "If the global economy were to slow down more sharply, a significant share of developing-country debt incurred since 2008 could become unpayable and exert considerable pressure on the financial system.”
- "There remains a risk of deflationary spirals in which capital flight, currency devaluations and collapsing asset prices would stymie growth and shrink government revenues. As capital begins to flow out, there is now a real danger of entering a third phase of the financial crisis which began in the US housing market in late 2007 before spreading to the European bond market.”
- These are deeply-disturbing assertions. The combined US subprime and 'Alt-A' property exposure before the Lehman crisis was just $2 trillion, and Greece's debts were trivial. What UNCTAD is talking about is an order of magnitude larger.
- Its prescription is radical. The world must jettison neo-liberal ideology, and launch a "global new deal" with a blitz of investment on strategic sectors. It wants a return of the "developmental state", commanding a potent industrial policy, and backed by severe controls on capital flows.
- The UN's advice to the emerging nations is to retake control of their destiny and turn the tables on the financial elites. They should impose capital controls, preferential tax treatment for retained earnings, and force fund managers to hold assets for longer. They should allocate credit without apology, and learn a trick or two from the Korea's methods of "financial repression".
- What is clear is that world will soon need a massive and coordinated spending push by governments to create demand and bring the broken global system back into equilibrium.
(VERO BEACH, FL) In 2008, TRUNEWS host Rick Wiles predicted that there would be a global debt jubilee in response to the global economic crisis which accelerated that year.
The UNCTAD annual report indicates that the globalists have conceded this to be a very real possibility.
Key Quotes from UNCTAD annual report:
“The world economy in 2016 is in a fragile state. Neither financial bubbles nor export surges offer a sustainable solution to the tepid growth and weak labour market conditions.”
“There is no sign of a concerted move towards policy coordination among systemically important economies…a more ambitious policy package is needed to address existing imbalances and ease the constraints on faster growth, whether in large or small countries, surplus or deficit economies, commodity or manufacturing exporters, creditors or debtors. A global new deal will need to move beyond business as usual.”