World economy's doomsday clock strikes minute to midnight as financial system collapses

(NaturalNews) Seven-odd years ago, when the banking crisis in the United States eviscerated global financial markets, central bankers stepped into the breach as last-resort lenders. Risky loans from the private sector were transferred onto the public-sector balance sheet, and unrestrained money printing (called "quantitative easing") seemed to provide a short-term fix in helping the global economy to at least stabilize.

However, as reported by John Ficenec of the UK's Telegraph, the fix is rapidly unraveling.

"China to Brazil, the central banks have lost control and at the same time the global economy is grinding to a halt. It is only a matter of time before stock markets collapse under the weight of their lofty expectations and record valuations," Ficenec wrote August 17.

The signs are increasingly obvious. For instance, he noted, the FTSE (Financial Gains Stock Exchange) 100 has lost all of its gains for the year already, and there are indication that the situation could get much worse:

— In 2008, China was the world economy's great savior, launching an unprecedented stimulus package that launched a major infrastructure investment boom. The boom caused a massive need for commodities to fuel the construction frenzy, which "dragged along oil- and resource-rich emerging markets," Ficenec wrote.

Now, however, the Chinese economy has all but stagnated. Economic growth has fallen below 7 percent for the first time in 25 years, according to official state data. That probably means that real growth is much lower.

The People's Bank of China, that country's "Fed," has attempted to implement a number of policies to boost the sagging economy, including cutting the rate of borrowing from 6 percent to 4.85 percent. Choosing to devalue the Chinese currency recently was a policy of last resort and signaled to the rest of the world that the Asian economic giant's growth is rapidly approaching its end.

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