Advancing on Chaos and the Dark

Ambrose Evans-Pritchard, writes in The Daily Telegraph

There will be no Chinese credit explosion this time, no real help from post-bubble India or over-stretched Brazil. It will be a global downturn on all fronts, aborting what remains of recovering even before industrial output in the OECD bloc has regained its pre-Lehman peak.

The second wave will hit with youth unemployment already at 45% in Greece and 49% in Spain; and with the US labour participation rate already at depression levels of 64%. We will hear more about Italy’s Red Brigades, Greece’s Sect of Revolutionaries, and America’s militia groups, and how democracies respond. Proto-fascism in Hungary is our warning. China’s surgical soft-landing will slip control, like Fed tightening in 1929 and 2007, or Japan’s squeeze in 1990. Once construction has run amok, bears will have their way.

He goes on to describe a world in which a devalued yuan sparks a move toward trade closure, acceleration of capital outflows, a bankrupt Japanese State, and the obliteration of the Euro.

In general, his predictions are merited and based in (grim) reality. However, one must hold out hope that where politicians fail (as they always and inevitably do), entrepreneurs will unleash their creative-destructive forces and forge a new economy, a third Industrial Revolution, that lifts the world from its debt-induced mire.

It is only the will of the demos to stand up in the face of its elitist oppressors and embrace change in industry and commerce that can fix our current malaise. The leaders of this century must be voluntarist, private sector innovators and not another generation of corrupt career politicians, bureaucrats, and bankers.