While almost everyone on Bay Street hypes the income trusts, and the proponents of globalization continue to sing from their hymnbook, I have thought for a long time that the economy will suffer a great crash.

Lately, I’ve been conducting a little research to see if indeed I am alone or whether there are others, many more skilled and prominent in the economic analysis business than I ever could be, who are foreseeing the sky falling. It appears I am not alone. Falling it may not be – yet, but the prospect of a sudden rift in our Canadian economy and also that of the world now seems to me a real one.

Who are these people and what are they saying?

In his recently released book, The End of the Line, Andrew Leonard believes that globalization has made the United States too dependent on foreign companies – dangerously so – and sees “imminent disaster looming.” While he pronounces his opinions on China’s involvement and former president Bill Clinton, the real value of his book lies in his coherent and fascinating explanation of how the “flexibility and interconnectedness” that are “fundamental building blocks of the global economy” are instead producing rigidity and vulnerability, the actual “Achilles’ heel” that will finally bring down the current economic apparatus.

Interestingly, there are a wide variety of supporting opinions on this ranging from the BBC to Internet news blogs. One, www.livingnow.com, details five reasons why the economy will crash and stay crashed! And not recover for decades! Those five are the weak US dollar, the popping of the US housing bubble, terrorism, long term prospects for accessible oil and the so-called generational problem that has a disproportionate old population increasingly being supported by a shrinking younger working population, all resulting in “decades of high inflation, high taxes and high political turmoil.”

But what scares me were the confessions of a renowned former member of the international banking community who once wrote an eye-opening book called Confessions of an Economic Hit Man. John Perkins advances a US-led international conspiracy by claiming that through his job as chief economist of Boston’s Chas. T. Main, he helped to engineer multi-billion dollar loans to third world countries like an Indonesia or an Ecuador that were designed to benefit from a few large US companies like a Halliburton or a Bechtel who would build that country’s infrastructure saddling the borrowing nation with “amazing debt that the country couldn’t possibly repay.” He claims that the US government is still pursuing this same philosophy.

To more fully understand the dire results when the markets crash, Maury Klein, professor of history at University of Rhode Island, notes that the combined collapses of the stock market and economy of 1929-1932 fed on each other and turned American citizens’ “first feverish love affair with the stock market into a lasting aversion” that only eased when trading volumes reached 1929 levels again in 1952. He contends that crash destroyed a promising Herbert Hoover presidency and facilitated the fall from power of the Republican Party, which became the minority party for the first time since the 1850’s and did not regain the White House until 1952.

The crash also encouraged a monetary policy that may have been the single most important factor in prolonging the depression, says Klein. As government continued to make war on inflation, its traditional enemy, Klein asserts that deflation had emerged as the biggest threat. Banks failed. Jobs disappeared. Companies closed.

Overseas, this collapse led to the coming to power in Germany of Adolf Hitler as well as other extremists. President Franklin D. Roosevelt’s presidency’s imposing legacy was the rise of big government – which still dominates today – and far-reaching federal intervention in the national economy. This intervention led to the creation of original federal social programs and federal regulation of Wall Street institutions. Does this all sound familiar today?

With the world’s poor nations clamouring for structural reforms, both Canadian and US jobs transferred to third world countries, increased government interventions in social policies and programs, can we safely say that we are comfortable living in our economic “glass houses”?

Mark Borkowski is president of Toronto based Mercantile Mergers & Acquisitions Corporation. Mercantile specializes in the sale of companies in the transportation industry. He can be contacted at mercant@interlog.com