SocGen: Prepare Yourself For The Worst Case Scenario!

socgen worst case scenario

Yesterday, it was reported that analysts at SocGen had sent out a guide on what to do if the world goes completely to hell.

Well, the full report has surfaced, via ZeroHedge, and it’s very, very fun if you like doom and gloom.

Basically, they’re extremely concerned about public debt, and the effect that will have on developed economies, and they draw extensive parallels to Japan.

Now, see the presentation >>

First, it starts with sky-high public debt

Debt is exploding, while government revenue is starting to drift violently downward

The public debt is just one similarity with Japan

On the interest rate front, we're following their map exactly

Think our rally is re-assuring? Japan had it too.

See? It's deflation that's the worry.

Never before have all the world's government cut so aggressively

Now lets look at household debt. We're nowhere back to near normal

So savings could go a lot, lot higher. Perhaps 8%.

Basically, our options for debt include default, inflation, and actual growth.

In the mean-time, debt-free emerging markets have it very easy.

And so we're looking at a big transfer of wealth, from the developed to the emerging worlds.

While investors will pile into public debt, high-yield defaults are going to soar.

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