'New forces will alter international financial & strategic structures'

by K Gajendra Singh (Extract from article which appeared on ICH 31 March 2008) An editorial titled ' Collapse of U.S. economy ' in Belleville Intelligencer of 27 Feb, 2008 confirms , by now generally accepted ill health of US economy . Harry Koza in the Globe and Mail recently quoted Bernard Connelly, the global strategist at Banque AIG in London, that the likelihood of a Great Depression is growing by the day. Martin Wolf of U.K.'s Financial Times cited Dr. Nouriel Roubini of the New York University's Stern School of Business, who outlines how the losses of the American financial system will grow to more than $1 trillion, an amount equal to all the assets of all American banks. The next domino to fall will be credit card defaults, and after that... who knows? There are so many exotic funds out there, with trillions of dollars in paper - or rather computer-screen money - all carrying assorted acronyms, and all about to disintegrate into nothingness. Over the next couple of years, scores of banks that have thrived on these devices, based on quickly disappearing equities, will fail. The most frightening forecast so far comes from the Global Europe Anticipation Bulletin (GEAB): The end of the third quarter of 2008 will be marked by a new tipping point in the unfolding of the global systemic crisis. At that time indeed, the cumulated impact of the various sequences of the crisis will reach its maximum strength and affect decisively the very heart of the systems concerned, on the front line of which (is) the United States, epi-centre of the current crisis. In the United States, this new tipping point will translate into a collapse of the real economy, (the) final socio-economic stage of the serial bursting of the housing and financial bubbles and of the pursuance of the U.S. dollar fall. The collapse of U.S. real economy means the virtual freeze of the American economic machinery: private and public bankruptcies in large numbers, companies and public services closing down. We are not experiencing a "remake" of the 1929 crisis nor a repetition of the 1970s oil crises or 1987 stock market crisis. What we will have, instead, is truly a global momentous threat - a true turning point affecting the entire planet and questioning the very foundations of the international system upon which the world was organized in the last decades. After the end of the cold war in the wake of the two World Wars ,the decline of western hegemony over the East and South during the last few centuries, first exercised by rapacious and brutal European colonialists and then from Washington, is now likely to morph into a fall because of the new forces unleashed by the US led invasions of Afghanistan and Iraq .The two debt financed wars have brought US economy close to a recession. Forces and changes have been set into motion which will completely alter the existing international financial and strategic structures and result in a new dynamics. Unless of course the irresponsible leadership of the US, still with colossal powers of destruction at its command or say a reckless Israel, bomb Iran and hurl the world towards a rapid general warfare between Israel & West vs Muslim nations and masses, leading to even a nuclear holocaust and Armageddon. K Gajendra Singh, Indian ambassador (retired), served as ambassador to Turkey and Azerbaijan from August 1992 to April 1996. Prior to that, he served terms as ambassador to Jordan, Romania and Senegal. He is currently chairman of the Foundation for Indo-Turkic Studies.