Possible “global economic collapse” over the next two years is the theme of a 68-page paper of Société Générale which purpose is to advise clients what to do to avoid losses in a Dooms Day scenario, reports the British Telegraph.

Société Générale is one of the main European financial services companies, based in Paris, France. On March 15, 2009, AIG disclosed that, among its counter-parties, Société Générale was to date the largest recipient of both credit default swap (CDS) collateral postings ($4.1 bn) and CDS payments ($6.9 bn), paid in whole or part by U.S. taxpayers.
So let us take a peek at their report. After all it is paid in whole or in part with our money.

“As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse” …
The underlying debt burden is greater than it was after the Second World War, when nominal levels looked similar. Aging populations will make it harder to erode debt through growth…
High public debt looks entirely unsustainable in the long run. We have almost reached a point of no return for government debt.”

Under the Société Générale “Bear Case” scenario the dollar would slide further and global equities would retest the March lows. Property prices would go down again. Oil would fall back to $50 next year.
The French bank says the current crisis displays “compelling similarities” with Japan during its Lost Decade with a big difference: Japan was able to stay afloat by exporting into a robust global economy and by letting the yen fall. It is not possible for half the world to pursue this strategy at the same time.

In these less then rosy conditions governments may decide that inflating debt is not such a bad thing to do.
Ha-ha!
I can’t help it but think it: did Glenn Beck write Société Générale report in between his Christmas book and the Bold and Fresh tour with Bill O’Reilly. The whole thing is like taken from the blackboard of the FOX News 5 pm show.
So what is the advice Société Générale give us:
In the “bear case” scenario gold would go “up, and up, and up” as the only safe haven from paper money.
SocGen , which is a major recipient of US tax-payer dollars, advises bears to sell the dollar and to “short” cyclical equities such as technology, auto, and travel to avoid being caught in the “inherent deflationary spiral”. Farm commodities would hold up well, led by sugar.

The report is titled “Worst-case debt scenario”. So far nothing the Obama administration is doing brings hope we will avoid it as the Government is pushing projects and bailouts that increase the debt as it is becoming unsustainable. So, are you going to take the French advice and invest in gold and sugar?