Japanese Prime Minister Shinzo Abe warned his Group of Seven counterparts today that the world may on the brink of a global financial crisis on the scale of Lehman Brothers.
TheÂ Japanese Prime Minister presented data yesterday atÂ the G7 summit he is hosting, showing that commodities prices have fallen 55 percent since 2014, the same margin they fell during the global financial crisis, interpreting this as âwarning of the re-emergence of a Lehman-scale crisisâ.
The Japanese Prime Minister Shinzo Abe failed in his attempt to have the G7 leaders warn of the risk of a global economic crisis in a communique issued as their summit wrapped up today inÂ Japan.
The final statement failed to address the scale of the financial crisis facing the world today and instead gave the impression that the worst is over with somewhatÂ Orwellian language which declared that G-7 countries âhave strengthened the resilience of our economies in order to avoid falling into another crisis.â
The communique gives the impression that there is little risk due to strengthened, resilient economies when the truth is that there are significant risks facing the global financial system and the global economy. Some of which include:
â¢ The global economy remains vulnerable to recessions and new debt crises. There are fragile recoveries in the Eurozone, UK and U.S. while Japan remains in a recession
â¢ Financial and banking systems remains vulnerable as seen in the very sharp falls in bank shares in recent weeks. Spanish, Italian, Greek and German banks have seen sell offs
â¢ Geopolitical risk in the Middle East (Syria, Saudi, Iran etc.), increasing tensions amongst Russia, China and western powers and the increasing spectre of terrorism and war
â¢ The Eurozone crisis is far from resolved and there is the risk of debt crises in China, the U.S., the Eurozone and indeed the UK
â¢ BREXIT causes a short term risk but the real risk is the poor financial fundamentals of the UK economy âÂ total debt to GDP ratio (public and private) is over 450% and completely unsustainable.
Japan had pressed G-7 leaders to note âthe risk of the global economy exceeding the normal economic cycle and falling into a crisis if we did not take appropriate policy responses in a timely manner.â However, leaders again failed to take leadership and opted for spin and again lulling their electorates into a false sense of security about the financial and economic outlook.
Rather than doing the responsible thing in this regard, there appears to have been an attempt to focus on BREXIT and to scare UK voters into not voting for a UK exit from the EU.Â German Chancellor Angela Merkel went as far as to say that BREXITÂ had not even been discussed but that there was a consensus that they wanted the UKÂ to stay in the EU.
Yet, aÂ 32-page declaration putatively from the G7 leaders declaredÂ that âA UK exit from the EU would reverse the trend towards greater global trade and investment, and the jobs they create, and is a further serious risk to growth.âÂ Brexit was listed alongside geopolitical conflicts, terrorism and refugee flows as a potential shock of a ânon-economic originâ.
Japan is right to be warning that there is a danger of the world economy careering into another financial crisis on the scale of the 2008 Lehman shock given the scale of the debt in the world today is much, much more than it was prior to the first financial crisis â see McKinsey Global Institute chart above.
Diversification remains the key to weathering the likely impact of the next financial crisis on financial markets and assets including deposits. Paper and digital assets, including digital gold, contain unappreciated risks such as bail-ins and inability to transact, be paid, liquidity etc.
Direct legal ownership of individually segregated and allocated gold coins and bars will again protect and grow wealth in the coming years.
Recent Market Updates
â Gold Should Rise Above $1,900/oz -âNew Bull Marketâ
â World’s Largest Asset Manager Suggests âPerfect Timeâ For Gold
â Gold As âExtremely Low-Risk Assetâ â Rogoff Advises Creditor Nations
â Silver â âBest Precious Metals Tradeâ
â Bank Bail-Ins Pose Risks To Depositors, Investors & Economies
â Take Delivery of Gold and Silver Coins, Store Gold Bars â Hobbs
â George Soros Buying Gold ETF And Gold Shares In Q1
â Hedge Funds Take Record Long Silver Position As Silver Bullion Deficit Surges
Gold and Silver News
Silver Rises as U.S. Housing Reports Buoy Outlook for Demand â Bloomberg
Gold on track for 2.3% weekly fall â biggest decline in 9 weeks â Reuters
Gold Investors Await Yellen’s Signals After Another Losing Week â Bloomberg
G7 vows growth efforts as Japan’s Abe warns of global crisis â Reuters
Gross Shorting Bonds As Concerned New Crisis Coming â Bloomberg Video
G7 Summit: Brexit would be ‘serious risk to global growth’ â Irish Times
SPAIN threatens to tear EU apart as banks LOSE â¬1.4 BILLION in a day â Express
China wants to set prices for the world’s commodities â Bloomberg
Read More Here
Gold Prices (LBMA AM)
27 May: USD 1,221.25, EUR 1,092.16 and GBP 833.50 per ounce
26 May: USD 1,226.65, EUR 1,097.24 and GBP 834.37 per ounce
25 May: USD 1,220.75, EUR 1,094.77 and GBP 834.63 per ounce
24 May: USD 1,242.65, EUR 1,111.18 and GBP 852.71 per ounce
23 May: USD 1,250.40, EUR 1,115.84 and GBP 860.89 per ounce
Silver Prices (LBMA)
27 May: USD 16.30, EUR 14.58 and GBP 11.12 per ounce
26 May: USD 16.46, EUR 14.73 and GBP 11.20 per ounce
25 May: USD 16.21, EUR 14.54 and GBP 11.06 per ounce
24 May: USD 16.27, EUR 14.55 and GBP 11.14 per ounce
23 May: USD 16.31, EUR 14.55 and GBP 11.27 per ounce
The post Global Financial Crisis Coming â Japan Warns of âLehman-Scaleâ Crisis At G7 appeared first on GoldCore Gold Bullion Dealer.