"Worst-Case Debt Scenario": Société Générale Tells Clients how to Prepare for Potential 'Global Collapse'

by Ambrose Evans-Pritchard


Global Research, November 19, 2009
The Telegraph - 2009-11-18


Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.

In a report entitled "Worst-case debt scenario", the bank's asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems.

Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of "deleveraging", for years.

"As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse," said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast.

Under the French bank's "Bear Case" scenario (the gloomiest of three possible outcomes), the dollar would slide further and global equities would retest the March lows. Property prices would tumble again. Oil would fall back to $50 in 2010.

Governments have already shot their fiscal bolts. Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade.

(UK figures look low because debt started from a low base. Mr Ferman said the UK would converge with Europe at 130pc of GDP by 2015 under the bear case).

The underlying debt burden is greater than it was after the Second World War, when nominal levels looked similar. Ageing populations will make it harder to erode debt through growth. "High public debt looks entirely unsustainable in the long run. We have almost reached a point of no return for government debt," it said.

Inflating debt away might be seen by some governments as a lesser of evils.

If so, gold would go "up, and up, and up" as the only safe haven from fiat paper money. Private debt is also crippling. Even if the US savings rate stabilises at 7pc, and all of it is used to pay down debt, it will still take nine years for households to reduce debt/income ratios to the safe levels of the 1980s.

The bank said the current crisis displays "compelling similarities" with Japan during its Lost Decade (or two), with a big difference: Japan was able to stay afloat by exporting into a robust global economy and by letting the yen fall. It is not possible for half the world to pursue this strategy at the same time.

SocGen advises bears to sell the dollar and to "short" cyclical equities such as technology, auto, and travel to avoid being caught in the "inherent deflationary spiral". Emerging markets would not be spared. Paradoxically, they are more leveraged to the US growth than Wall Street itself. Farm commodities would hold up well, led by sugar.

Mr Fermon said junk bonds would lose 31pc of their value in 2010 alone. However, sovereign bonds would "generate turbo-charged returns" mimicking the secular slide in yields seen in Japan as the slump ground on. At one point Japan's 10-year yield dropped to 0.40pc. The Fed would hold down yields by purchasing more bonds. The European Central Bank would do less, for political reasons.

SocGen's case for buying sovereign bonds is controversial. A number of funds doubt whether the Japan scenario will be repeated, not least because Tokyo itself may be on the cusp of a debt compound crisis.

Mr Fermon said his report had electrified clients on both sides of the Atlantic. "Everybody wants to know what the impact will be. A lot of hedge funds and bankers are worried," he said.

http://www.globalresearch.ca/index.php?con...a&aid=16171

Invest in brass and lead.

bullets and casing?

Keep your powder dry.

Seriously, it's one thing to talk about sheltering wealth, it is quite another thing to be in a food line wondering if the truck will show. How about rationing power and utilities? How about oil transportation coming to a screaching hault?

Yup!

We (USA) could all cut back. According to Joshua Farley in his talk, "Beyond Economic Growth"

http://www.themadisoninstitute.org/radio_programs.htm

if we wanted to cut back 2/3 of our carbon emission, that is live on 1/3, we would be living the life style of the late 60s.

I don't remember the late 60s life style as all that bad. Except for Vietnam, which was completely avoidable.

And the food truck has been showing up too often judging from the "wastelines" I see around on people.

If I were king, I would add a 50 cent a gallon tax EVERY YEAR until American gas cost the same as European gas. And I would rebate an equal amount in reduced sales and income tax.

And I would be shot.

Too funny.

What would be amazing to see is just how much Americans actually need to live. I don't find the 2/3 number to be all that unbelievable.

Support the development of, "Food Sheds." Utilizing food grown with 75 miles of you. Help get your school lunch programs to adopt this model...

We have an Indian food market nearby that sell 100lb bags of rice CHEAP...
They have a nice assortment of dried beans, lentils etc....
Our pantry stays stocked.
I have the ability to purify water and am growing tomatos on the patio.
Of course I have lots of 357 and 22!

If and when it hits the fan we are going to be very low key and respond
only if attacked. I got a sample of things during the last storm here. People were
panicking when Walmart emptied of everything... It is not crazy to get ready!
It IS crazy to wait on FEMA or the government to save you.

Easily 2/3. Maybe 1/5 with a little effort and, of course, small cars.

Do you saute the 22 with the lentils and steam the 357, or
chop the tomatoes, toss in the 22, and oven-warm the 357?

how possibly will a gun and bullets save you?

what will end up happening at the end, is you will eat the last bullet because if you have

100 bullets you will need 101
if you have 1000 bullets you will need 1001
10,000 bullets, you will need a 10001
if you have 100,000 you will need 100001

if everyone has a gun, your gun is meaningless (sort of why all nations want one nuke)

and you can be the last person on the face of the earth like MrBeamis was
and then you can break your glasses

so what good is a gun and a bullet when there is no way you will outlast everybody
(not to mention- why would you want to?)

so what would a gun in that situation do you?
It's like a car dodging in and out of traffic for 10 miles
All it gains you is about 30 seconds

Have a sharp knife and rifle, or expect your arguement to sustain you. Chose.

Maybe you will follow Graham...maybe another. Chose leadership.

chose for what?
are you planning on eating dead humans for lunch?

and if there is no water and no Charmin, what are you going to wipe your tush with and where?

You couldn't even control the vigillantes in Algiers Point

Obama or Jeb
there is no other choice.

you think you are in a movie like the Postman

repeat after me
It's only a movie
It's only a movie
It's only a movie
and John Wayne got out of the way and the stunt man did the stunts

Graham, there's a quote out there by someone about preferring to stand on one's feet in freedom than on one's knees in subservience or in tyranny.

It's closely related to the ee cummings poem.

In the end, you have to know who you are, what you will stand for and accept (and what you won't), and what it takes to draw the line in the sand, and where that line will be drawn for you.

If you don't know where your own line is, you can't figure out whether you're standing in front of it or behind it or aside of it, or just exactly where you are in reference to anything.

It is what Richard Strozzi Heckler or any good student of the martial arts (which require no guns or weapons) speaks of in terms of centering, of what that sensei in that recent video clip (that famous movie star who is a martial arts master in aikido) spoke of in terms of not giving up one's center or "the" center of the mat or one's personal range or ma-ai.

It is what used to be termed knowing when and where to drive one's picket post.

It is what the aikidoist and the Pulitzer Prize winning anthropologist Ernest Becker addressed in his book "The Denial of Death".

You have to be willing to die before you can begin to live.

remember the tv movie "The Day After"?

Remember the noble doctor played by Jason Robards
after the bomb, radiation killing everyone and his family is dead
he goes back to where his house used to be and nutjobs were squatting there
tries to reason with them, yells at them to get out of his "house"

he is shot dead

what's the point?
He was about the last person left alive to help people and senselessly he was killed

(of course, that could be a parable....you can insert many people in that including JFK RFK MLK, Jesus himself, etc.

Graham has little regard for his own protection or his loved ones, it would seem. He believes that Mother Government will take care of him. What happens to him in the final analysis, is of no interest to me.
I believe in self preservation, and don't expect anyone to come to my rescue.

until when?

if the entire structure fails, you yourself cannot sustain yourself for all that long
either someone stronger will come and get you, or disease will come and make everything unlivable

odds are, right before this big event happens, someone will indeed set off the big one, in the hopes that instantly killing most people would allow
just enough for them

cue in "on the beach" and then strike up the dance band on the titanic and go out dancing

and again, for what would you want to be the last man standing?

"if the entire structure fails, you yourself cannot sustain yourself for all that long"

Says who?

Never been camping in the wilderness? Never read the book "Deep Survival"? Never read anything about survival? Do you have the skills, the wits, the leadership capacity, the nostril-flaring will, the ability to learn and teach, the ability to foresee and forecast and plan?

Who said anyone would be standing alone?

You need to get your head out of the movies and off the fiction of the screen and get your head into real life, real people, real situations.

For what would I be the last man standing?

For others for whom I had great love, great affection, and great respect.
For the right to be... the way I wanted to be.
For self-dignity and self-respect.

It's a personal thing.

You have to know where your hara is. And you have to know what it is.

It's a place and a feeling and a center in your gut.

It's between your hip bones, several finger breaths below your navel, and several finger breadths below the skin.

It's the place around which you cannot help but move when you move.

It's where you get moved.

It's what you have to move if you want to move yourself, or others, or mountains.

For what (or who) are you prepared to die, Graham?

You have no clue what I'm capable of Graham. My life is not a movie...It's stark reality. I have faced death four times in my life, and won. There would be no reason to give into it now.

Well, this much I know, if people come to take your food and your water, and you have a gun, they will move on to easier pickings. So, check! Got that.

Wilderness survival by myself??? I have the knowledge, but probably not as spry as I ought to be so I guess I better work on that.

I've got the lentils, rice beans and stuff.

But, you know, I'm not going to do it here. I'm just not! I"m going to find myself a hammock in the Virgin Islands or a big nice tree house in the Black Forest, or a little trailer by the sea someplace and fish, collect coconuts...make a good still and snuggle up to somebody halfway decent (if I find anyone like that) just to pass the time. I'll be damned if I'm going to sit in Georgia and wait for the apacolypse or something. I'm going to have a good time!!!

and the woods, if that is the place for everyone to go, wouldn't it get mighty crowded there?

Frenchy, its not a camping or hunting trip.

Yes, theoretically one man can survive forever on his own (look how long the unimbober did, but when everyone is in the same boat, you might last
longer than others without guns, but while you are shooting someone who is attacking you, that bear behind you comes up, and that bear is just as hungry as you are.

and then there is the fecal waste...
not a problem in the bare woods with only one or two

big problem in 2009 with millions going

unless that will be the delicacy of the day "soylent green is not people, its fecal waste" Got e-coli for dessert?

Part of the problem has been the folks who dump their crap on the rest of the world.

Many of the rest of us have been potty-trained, though, and have enough self-regard and self-respect and understanding of the nature of the problem to clean up after themselves, and who can work collaboratively in groups to build latrines and such.

If you look around with care and awareness, you can see that there have been a whole lot of folk who have been dumping their waste and toxicity into our air, our water, our political system, our international affairs, and our discussion boards.

As was noted recently by El Cabrero at The GoatRope:

"“It occurs to El Cabrero after reflecting on human history that two really bad ideas have shown up over and over and done lots of harm.

The first one is the belief that we can do X to Y and it will be over and there will be no consequences.

The second is that we can do whatever we want over here and it will have no effect anywhere else.

Does the Gentle Reader have any other suggestions?”


Don't forget to take a few rolls of Charmin.

Let me know how that works out for you. That is the great thing about survival, we all have our own stratagy. I do not begrudge you the ability run away from harm. Please do not begrudge me the ability to stand and fight. Fight or flight. It's has been working pretty well for thousands of years.

These I understand, but what is it with Graham's fecal fascination?
Deciding to sit on your butt is a choice, but if it ain't tight, you won't get much in trade.

but what is you fascination with my butt?
you mention it every other day

Actually, we are where we are because for thousands of years people are fighting and killing

fighting for the sake of fighting is meaningless

Ever see the twilight zone episode with Jack Klugman as the pool player

It's not a matter of running away from harm, but when the last 3 people left are your spouse and a kid, and they are hungry and you are hungry,
who will be the one to eat?

Survival of the fittest is what got us to where we are today. I find it funny that the enlightened anti war types (not saying you) are so against the very human nature they have been studying for so long. You know evolution and nature and what not. Yet now that we have the web, we are all so "Above it all" Ya 100,000 years of evolution just flies right out the window the day we all smoked our first joint.

If there is not a shred of food left on the planet then we will all starve. However, I feel I have equiped myself with the best tool sto find food.

What is funny when you get on these rants, is that how there is simply no point in doing anything what so ever because at every turn you have some excuse for why it won't matter. If life on this planet went by your philosophy, then we would have never bothered to climb out of the ocean.

I mean come on. It is guaranteed that you will die. Why even bother living? It does not matter anyway.

you got a point there.

as I don't know you, I am just speaking broadly here-

You and bigtom and
others like you here are well equipt to know which berry you can eat, which mushroom, what water is good or bad, how to shoot and kill just the things you are aiming to shoot and kill and not innocents...
most people are not...I would probably pick the wrong one. And you can use your gun until the last bullet.

I am equipt to do things you don't, everyone is good at something
I would most likely have my gun taken away or used against me, as odds are, I wouldn't use it to kill.

I have said the following before-
my dentist back in the time of the anthrax/smallpox talk in 2003 said, while cleaning my teeth, that if smallpox came back(whomever and however),
and was ravaging the world, that my dentist told me he had a pill at his disposal.
Because he don't want to be around anymore at that time. That life would cease to be worth living.

Survival of the fittest has been the case, but the person that dies first, might have been the one with a cure for cancer.
And also, one cannot outrun the reaper, no matter how many cans of spam or bottles of water one has saved up.

However, those like me may creatively come up with our own solutions.
One of me might be the one to save the world, in tandem with one of you.

but more likely, the animals on earth will be here long after the last man has died off.

hey, as George Strait sings on his latest cd
"It's not the breaths you take (not the # of breaths)
it's the breathing in and out while you take them

and to quote a favorite song on this board
"A country boy can survive"
however that is in his environment
come up to NYC and ride the trains and the maze of people and its the city boy who survives and is not out of place

I believe in some conspiracies, but I do not believe the world is ending any time soon.
(unless someone drops the big one).

as our politics is in cycles
the powers that be know they get one side mad, then that side wins
then the other side gets mad and then they are thrown a bone
so nobody gets too mad

I believe that the possibility for a paradym shift occured when the evolutionary process produced
Self-awareness in the human organism sufficiently to be genetically transferable to all subsequent
members of the species. The capacity for self-awareness probably grew out of the process of certain mamals developing social systems for the support of families, communities and tribes...With self-awareness comes the capacity to transcend the previous systems principle of survival to add on
the principle of thrival which integrates socialization and self-actualization...This view of human existence has become more widespread as an understanding of the Emergent nature of evolution
is more accepted. The natural state of the univiverse is to be in motion and the defining quality of
the universe is Intelligence. Natural development is the figure of an orderly process against a background of randomness. The natural intelligence of the universe is to seek progressively higher
levels of Organization...this building organization provides the counter balance for the Entropy observed
in the universe...

I'm just thinking out loud here in a very speculative mode and I welcome critique and feedback...

So what do you do in a catastrophe, when you find out that the government can no longer provide protection or services?

Tell that to the pioneers of this nation.
The ones who came here before the nation was formed.

A 22 will get you dinner, and in a total economic collapse, those who are in the right place will be hunting for food.

Oh, you are a classic case.

Try thinking outside the box sometimes.

Stay on topic, Mr. Diversion

Intelligence need not addict us to "systems".
Rather, the more system-independent we are - the more intelligent, IMO.

Systems break down in the face of anarchy. You are then left to your own devices.

Do you really hold such a self-defeatist attitude about life ?

It's really gonna suck if things collapse and someone finds you hiding in a closet, laughs, and takes everything that might allow you and your loved ones to survive.

4 times is definitely a harsh reality.

I expect you would survive a 5th and keep moving forward.

Such things are about 90% mental, but don't ask for a citation, because it is a belief and the numbers might be a little off.
But in every case where someone has survived where the average person might not, it was a string will and the determination to survive, that allowed the individual to do so.

Check this site out.
Visit My Website
The individual has spent a lot of time putting together a method of stocking up, which might be very helpful if what is being discussed occurs, or if you find yourself unemployed for an extended period of time.

Oh, and concerning the secondary locations,
If you know when it will occur,
Let me know

BOO

How to prepare for potential global collapse?

I'd rather spend time preventing it than preparing for it. I'm not sure I'd want to live in a world that has collapsed.

Right, because all the plants and animals are dead or will kill your defenseless self.
I'm guessing the Apple Trees from the Wizard of Oz, haunt you in your sleep

OH good lawd, here we go. FOILCON CHARLIE

You are correct.
We would all have something to offer if things went south.

But I don't see your dentist's little pill as being very appealing.

In the city, in the country,
Spend a lot of time at this website Surbiving In Argentina and then get back to me.
Nothing is certain in a survival situation.
But being as prepared as is possible, will mean the difference between life and death.

And FWIW, survival has nothing to do with a SHTF scenario.
You mentioned in another thread that you grew up in NY and have never been bothered.
I'm betting that is because you remain aware of your surroundings, and the ever present criminal element senses this.
Why do you think the predators of the animal kingdom, go after the weakest of the herd ?
They look to expend minimal effort as they attempt to survive.
It's no different than all of us humans who look for a good paying job.
Minimal effort for existence.
Same Same.

One can do both, Bill.

Who or what is "Foilcon Charlie" ?

You definitely weren't military!

So what's it mean ??
I'm guessing it is an Army or Marine term, or perhaps something that has significance to those who have been in battle.