The World Bank yesterday released its long awaited forecast for the world�s economic future. �The financial crisis is likely to result in the most serious recession since the Great Depression,� said Justin Lin, its chief economist.

The global economy is captured in a downward spiral as never witnessed before. Whereas before economies were more localized and had more immunity to outside forces, now globalization has ensured that one big failure in the machine can create a systemic event that brings down all the component parts. The inevitable failure of a few major banks has demonstrated just how much havoc can be wreaked from Alaska to Beijing.

Emerging markets, dependent on mature market consumption, are teetering on the edge of bankruptcy as private capital inflow has been drying up and is forecast to reduce by half next year. The volume of world trade is set to decrease by 2.1 percent, the biggest drop for 33 years. Oil exporting countries from Venezuela to Russia are seeing revenues crash as demand across the world decreases. Poor countries, on the other hand, have experienced a decrease in the cost of living as food and oil prices drop. In an unforeseen twist of fate, globalization has enriched poorer countries and impoverished richer ones.

Greece is in the throes of a revolution as their people mount a massive protest against the country�s history of corruption and economic mismanagement. Originally born of the alleged murder of a 15-year-old boy by Greek police, the momentum was maintained by deeply rooted history. Is this a sign of things to come? As economic conditions deteriorate across every continent, blame will be apportioned and it won�t be hard to find easy targets. Shortages of food, homelessness, and unemployment are now realities for an ever increasing number of people who have never known a life like this before.

We are watching our own governments waste the money we could be using constructively to prepare and mitigate for harder times. Attempts to restore the economic activity of nations through liquidity injections into failing banks will achieve nothing when the basics of this same economy rely on a volume of activity that was sustained by inflated wealth through credit. The only reason we bought so much stuff was because we could always pay the bill later.

So it�s no big surprise that �We�re almost in an air pocket, where we don�t have a new global driver of growth.� said Thomas Mayer, the chief European economist for Deutsche Bank. Sorry, Thomas, we�re all tapped out. Unrealistic growth was the problem in the first place. Growth of an economy through a regulated monetary system, consumer saving, profits ploughed back in to production, balanced budgets is one thing, but unhinged consumption and imaginary accounting by the financial �industry� to inflate wealth was always destined to arrive at cardiac arrest.

Financial companies are supposed to provide credit to individuals and real industries to grow the economy. When they discovered that there was money to be made giving loans to anyone who could hold a pen, they officially became usurers. When they opened the casino and took bets on anything that could go one way or another, from the economic health of a country to whether interest rates would go up or down, they opened the gates to their own destruction and consequently that of their victims. Even ordinary citizens got caught up in the act as stocks were bought and sold like candy. We have a stock market that may as well take its cue from the atmospheric conditions on Pluto. It certainly has nothing to do with economic realities on the ground.

Lack of regulation and the quest for short-term profit at the expense of long-term sustainability has brought the world to its knees. A new paradigm is desperately needed to restore sanity to a world gone mad. As we travel the downside, we cannot expect the same failed mechanisms to save us. The actions of governments the world over so far ares to try tp blow air into a burst balloon; no matter how hard they blow, it will never be able hold its form. It�s time to admit that we have overextended the system to the inevitable breaking point and now the remaining pieces must be reassembled into something that does not need wizardry to keep it upright. Pundits the world over are espousing many different analyses and solutions, but in most cases, economic fundamentals play a minor part in the dialogue.