this is 1929 repeating, page-307

This doens't look good, I've been following this guys' comments (DAS) and he appears to know what he's talking about...

http://www.abc.net.au/news/stories/2009/03/10/2512628.htm?section=justin

World on the brink of another depression: analyst


A prominent risk analyst says that unless urgent action is taken, the world is headed for a sovereign debt crisis that will doom us to something akin to the Great Depression.

Analyst and author Satyajit Das wrote a paper in 2006 called The Coming Global Credit Crash, highlighting the toxic debts that would poison the global financial system.

Now, echoing the World Bank, he says businesses and governments in the emerging economies are already being choked by a lack of funds.

He told ABC Radio's PM program that even advanced nations like America and Britain will not be able to finance their massive banking bailouts and stimulus packages.

"I think the real situation is now getting to the point of diabolical, particularly in ... the export industry, trade protectionism has kicked in," he said.

"They can not get any money financing, they're actually getting squeezed both on the sale side and the financing side.

"In places like Dubai, where obviously property speculation has been a big part of the economy, property prices - particularly at the high end - have fallen by between 30 and 50 per cent.

"The best way to describe Dubai, which at one stage had 14 per cent of the world's cranes employed, is there are a lot of cranes, but they ain't going anywhere."


Fundraising

In an rising trend in emerging Asian nations, companies are unable to get loans, and governments can not issue bonds or raise money.

Mr Das thinks this is the first phase of a major problem that will play out to the rest of 2009 and beyond.

"What we're seeing is money to emerging markets get cut off," he said.

"But a primary reason for that is the major developed nations, like the United States, Great Britain and so forth have to raise somewhere between $US3 trillion and $US4 trillion.

"The US alone has to raise $US2 trillion, and they have never raised more than about $500 [million], $1 billion, so that's four times their normal borrowing need.

"They're squeezing everybody else out of the market."


Return to order

Mr Das said what is critical now is "a global agreement between the debtor nations and the creditor nations, to actually work out how to keep the funds flow going".

"Simply because if this breaks down in the way it's now breaking down, it dooms us to something akin to the 1929 period," he said.

"And the last thing that we need to do which is again being addressed, but in a very piecemeal and unsatisfactory way, is trying to get the financial system, particularly of countries like the United States, and Great Britain, to some semblance of working order."

His outlook on the situation is dire.

"Human beings never do anything until they get to the edge of the abyss and look down," he said.

"We are now within touching distance of the abyss."


'Choking to death'

Mr Das said many companies can not get money to just prepare orders for sale.

"This actually squeezes these companies to the point where they can't actually make things and sell them," he said.

"This is also starting to affect agriculture, where farmers cannot get actual funding for crops in terms of buying seeds and buying equipment.

"What this is, is absolutely totally choking the life out of the economy.

"It's like oxygen, debt's always been like oxygen. It's now not there in the room and everybody is suffering from a bad case of asphyxiation."