Tuomas Malinen+ Your Authors @mtmalinen PhD econ. Chief Economist of GnS Economics. Adj. Professor of Economics @ Uni Helsinki. Economic growth, economic crises, monetary unions and central banks. Jan. 16, 2020 2 min read + Your Authors

I know it's difficult to grasp of what's about to hit with the #StockMarket constantly reaching all time highs, but so it did, e.g., in 1929.

Here are some of our latest works to explain, why 2020 is the year when we fall into the next crisis.
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In August, we detailed, why central banks have become a threat to the #economy .

"The exceptional measures of central banks were crucial in the acute phase of the crisis, but [...], they turned into a serious and dangerous drag on the global economy."

In September, we explained why the turn to massive monetary easing is unlikely to reinvigorate the real #economy.

"the [...] economic downturn did not start as a result of trade issues, but rather from the diminution of massive Chinese debt-stimulus." 3/

In October, we warned on the dire straits of the European banking sector, which holds the largest concentration of G-SIBs.

"As a result of [...], a large part of the European banking sector has probably been insolvent for the past 10 years". 4/

In November, we explained, why the global business cycle is ending.

"This quite simply means that China does not have the ability (financial space) to launch a massive infrastructure stimulus programs á la 2015". 5/

In December, we explained why the #repo -market issues were the first symptom of the collapse.

"It was the first clear sign of the potential for a violent unwinding of the massive speculative financial positions created by central bank meddling." 6/

In our latest blog, we explained why the "Chinese miracle" is ending.

"Because China has been kept growing by an incomprehensibly large increase in debt, its economy is actually a massive and vulnerable Ponzi-scheme waiting to collapse" 7/

So, what the Chinese leaders and central bankers are currently engaged, is a desperate fight to stop the fragile global economy from collapsing.

We never had this situation, where the legitimacy of our central authorities has been so threatened by the economy. 8/

But, now it is. Come #recession, both the global asset bubble and the 'Ponzified' Chinese economy will crumble taking the world #economy with them.

It'll be epic.

The really troubling issue is that there's really no other option. 9/

Like we explained in our March 2019 issue, the global growth model is broken.

"Because of these measures, the process of creative destruction that had guided market economies for the past 200 years was stopped all over the world." /10

'Organic' economic growth can only return through the "reset", where financial and real economic excess is purged from the system.

All other options (MMT, monetization) will just lead us deeper into stagnation and socialism, with all its horrors. /11

Alas, 2020 will, most likely, mark the year, when cataclysmic economic changes started to take shape.

And, everything starts with a collapse.

#Brace! /End

You can follow @mtmalinen.


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