The U.S. and the U.K. Will Both Default on Their Debt by the End of Summer

LEAP/E2020

As anticipated by LEAP/E2020 as early as October 2008, on the eve of summer 2009, the question of the US and UK capacity to finance their unbridled public deficits has become the central question of international debates, thus paving the way for these two countries to default on their debt by the end of this summer.

(1) At this stage of the global systemic crisis' process of development, contrary to the dominant political and media stance today, the LEAP/E2020 team does not foresee any economic upsurge after summer 2009 (nor in the following 12 months)

(2) On the contrary, because the origins of the crisis remain unaddressed, we estimate that the summer 2009 will be marked by the converging of three very destructive rogue waves.

(3) illustrating the aggravation of the crisis and entailing major upheaval by September/October 2009. As always since this crisis started, each region of the world will be affected neither at the same moment, nor in the same way

(4) However, according to our researchers, all of them will be concerned by a significant deterioration in their situation by the end of summer 2009

This evolution is likely to catch large numbers of economic and financial players on the wrong foot who decided to believe in today's mainstream media operation of "euphorisationâ



In this special Summer 2009 edition, our team describes in detail these three converging rogue waves and their impact, and gives a number of strategic recommendations (currencies, gold, real estate, bonds, stocks, currencies) to avoid being swept away in this deadly summer.

LEAP/E2020 believes that,

(5) instead of green shoots (those which international media, experts and the politicians who listen to them kept perceiving in every statistical chart in the past two months),

(6) what will appear on the horizon is a group of three destructive waves of the social and economic fabric expected to converge in the course of summer 2009, illustrating the aggravation of the crisis and entailing major changes by the end of summer 2009… more specifically, debt default events in the US and UK, both countries at the centre of the global system in crisis. These waves appear as follows:

1. Wave of massive unemployment: Three different dates of impact according to the countries in America, Europe, Asia, the Middle East and Africa

2. Wave of serial corporate bankruptcies: companies, banks, housing, states, counties, towns

3. Wave of terminal crisis for the US Dollar, US T-Bond and GBP, and the return of inflation



In fact, these three waves do not appear in quick succession like the sisters rogue waves. They are even more dangerous because they are simultaneous, asynchronous and non-parallel. Hence their impact on the global system accentuates the risks because they hit at various angles, at different speeds and with varying strength. The only certain thing at this stage is that the international system has never been so weak and powerless to face such a situation. The IMF and global governance institutions' reforms announced by the London G20 are at a standstill

(7) The G8 becomes more like a moribund club whose utility is increasingly questioned

(8 ) US leadership is the shadow of what it used to be, mostly concerned by desperately trying to find purchasers for its T-Bonds

(9) The global monetary system is in a process of disintegration, with the Russians and Chinese in particular accelerating their positioning in the post-Dollar era. Companies foresee no improvement in the business climate and speed up the pace of layoffs. A growing number of states falter under the weight of their accumulated debt created to "rescue banksâ€Â