Two-speed' global recovery likely to continue in 2011: IMF … International Monetary Fund has said that the world economy is likely to see a "two-speed" recovery in 2011 with emerging markets witnessing stronger growth than advanced economies. Some emerging nations like India and China, however, are also facing the challenges of huge capital inflows and overheating. The global economy, which grew nearly five per cent this year, is being driven by good expansion in emerging countries while many advanced nations continue to grapple with sluggish economic activities… IMF chief economist Olivier Blanchard stressed that countries should focus on re-balancing activities, including structural measures and exchange rate adjustments. "Without this economic re-balancing, there will be no healthy recovery," he said." – UK Telegraph

Dominant Social Theme: 2011 will be a good year.

Free-Market Analysis: This article (excerpted above) makes the case that the "emerging world" is going to support the "developed world" until the Greater Recession is finally undone. We don't believe it. The world is getting poorer, not richer. In this article, we will try to supply some much needed perspective to the predictable happy talk emerging from globalist institutions and reported by the mainstream media.

Let us try to speak plainly about what has taken place in the West in the past three years. Western economies began to implode in 2008, beginning with the "mortgage meltdown" in the United States. But the culprit was not regulation, not bad private or public decision-making, not even greed. The culprit was the mercantilist system of central banking itself, which prints money from nothing under the color of law.

The United States can print more than other countries in the world because the dollar is the world's reserve currency. After World War II, when the world was shattered, the Anglo-American axis used its predominate power to set up the current global monetary system – including the UN, the IMF and the World Bank. In the 1990s, the elite decided the time has come to take the next step toward global governance using military and monetary tools.

Thus, the 2000s has seen a considerable uptick in military deployment and US serial warfare. It is hard to avoid the conclusion that the Anglosphere used the 9/11 attacks – which still have not been fully explained by any means – as a pretext for considerable domestic and international spending which began to destabilize the dollar at a rapid rate.

The rest of the West – the EU and Britain – participated in an orgy of governmental spending in the mid 2000s and it is very difficult to believe that the powers-that-be did not foresee that Western economies would implode at some point. The leaders of the European Union have said as much, in fact: predicting that a downturn would provide the impetus for a "crisis" that would lead to a closer EU, even at a time when voters are not apt to approve of one.

It is the Bell's working hypothesis that the implosion proved worse than the elites anticipated and the chaos more profound. "Out of chaos, order" may guide the actions of globalists, but there is such a thing as too much chaos. The Greater Recession also provided people with an impetus to go online and read about alternative economics on the Internet, another unexpected outcome of economic difficulties plaguing the world. The truth-telling of the Internet has begun to have an impact. "Austerity" provided the trigger.

The seeds were planted long ago, with the spread of mercantilist central banking around the world. In 2008, however the post-war system finally failed. Since it failed, the powers-that-be have printed about US$50 trillion in phony currencies to try to prop up the system. The nonsensical "banking" industry has been "bailed out" – though commercial banks are merely the distribution arm of central banks. They are not for the most part necessary, and have distorted Western economies terribly. Nonetheless, they have been preserved along with the rest of the ruinous system.

It is this system that the powers-that-be are trying desperately to preserve. It is however in our view an entirely failed system. The world's economy has been so distorted by over-printing of paper money – and subsequent bailouts – that it is impossible for the market to determine a solvent company from an insolvent one.

Instead of allowing a sharp but short depression to sort out the market, the power elite (anxious about losing its bank/fiat-distribution system) printed oceans of money to retain liquidity for the current system. This is a little like putting a life-preserver on a drowned man.

Now the IMF projects that emerging countries will keep the world's "economy" afloat until the developed nations can resume their economic progress. In fact, the Greater Recession has cast doubt on the larger system. In the 20th century, printing trillions in money-from-nothing created consumerist societies with the US as the premiere consumer. But in the 21st century, we can see that such systems are basically unsustainable.

Central banking creates phony demand (a Dreamtime, we've called it) and people leave good jobs in serious industries to go to work in the "hot" professional arena, never realizing that it is monetary stimulation that has created the evanescent industry. When the boom turns to a bust, as it must inevitably, the industry collapses and people are left without jobs. This is how a country like America that supplied 50 percent of the world's goods and services after World War II turns into a country that is bulldozing whole cities (and their empty factories) in less than half a century.

Now the BRIC countries, Brazil, India, Russia and China are to provide the economic engines that will keep the world running. The only trouble is that India and China are suffering from considerable price inflation from (you guessed it) printing too much money-from-nothing. Overwhelmed with a deluge of money, China is trying to tighten considerably and no doubt India will have to do the same. This leaves Brazil and Russia, countries that not so far along the price-inflation curve. Does anyone really believe that Brazil and Russia will provide the monetary muscle to lead the world into "recovery?"

We began this article by observing that the IMF was providing a false narrative – one of recession and recovery – when the world's current economic system virtually succumbed in 2008. We do not know what will replace what has gone before, but we have suggested many times it will be different than what is there now. Perhaps, the elite will be able to make the transition to a true world currency like the bancor. Or perhaps the system will break down frankly despite the elite's best efforts and some sort of free-banking gold-and-silver system will emerge spontaneously from the wreckage.