“World Economy Entering Into Financial Hurricane Season”

Dr. Michael LaitmanOpinion (from Insurance Journal): “The North Atlantic hurricane season runs from mid-August to October, with a strong peak in storm activity around the middle of September. A less familiar but even more destructive pattern of disturbances is the financial hurricane season, which coincides with the meteorological one almost to the day. …

“The coincidence between financial and meteorological hurricanes may not be entirely fortuitous. The global economy, like the world’s atmosphere, is a finely balanced complex system.

“In such systems, small perturbations can accumulate to trigger big effects. And just as the meteorological tipping points tend to occur when autumn air circulation starts to disrupt the humid air accumulated in the summer doldrums, something similar seems to happen to financial markets when trading becalmed by the summer holidays returns to normal. The result can be sudden and violent reaction to events accumulated over the summer that markets had seemed to ignore. …

“In China, economic activity has failed to accelerate as expected, despite repeated attempts at monetary and fiscal stimulus. This could mean simply that the government and the central bank have not yet done enough. It is possible, however, that the Chinese economy has become too complex to be managed and fine-tuned as effectively as in the past. Or perhaps the disappointing results of Chinese stimulus thus far reflect a broader failure of monetary policy, which is becoming evident around the world. Recent disappointments in Britain support the latter interpretation.

“In the U.S. and Britain they refuse to acknowledge that printing money can ever be counterproductive. In Germany, by contrast, they refuse to accept that printing money can ever work. Which brings us finally to the most important source of instability that threatens a financial hurricane this autumn – the impending clash between the ECB, Germany and the rest of the euro zone.”

My Comment: A lack of understanding of the nature of the process is the cause of our state, and the problem will disappear only when we become aware of its cause and our actions are in accordance with the program of nature (See Baal HaSulam’s article “Peace in the World”).

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