We had a server outage, and we're rebuilding the site. Some of the site features won't work. Thank you for your patience.
imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Shaky Economies

by Stephen Lendman Monday, Apr. 23, 2012 at 9:26 PM
lendmanstephen@sbcglobal.net

class war

Shaky Economies

by Stephen Lendman

Since 2009, an ocean of easy money saved American, EU, and Japanese economies from collapse.

Never before historically did the world's largest central banks abandon reason and go "absolutely berserk," according to financial expert Martin Weiss. Earlier ones alone did it.

Four is unprecedented and dangerously reckless. So far they're swimming above water together. Eventually they'll sink when "the money drug stops working." Diminishing returns eventually follow, then perhaps crashes when things spin out of control.

Economic growth already is faltering. Lower or declining growth despite larger money infusions shows trouble gets closer to erupting. As long as printing presses roll, day of reckoning's postponed, but that game only works for so long.

Drug addicts need regular fixes, then bigger ones. They lead to overdoses and death. Economies are similar. What can't go on forever, won't. Trouble awaits excess down the road. The more extreme, the greater the bang. It's coming and will rock the world.

For over two decades, the Bank of Japan (BOJ) printed money "like crazy." In 2008, when crisis erupted, BOJ's balance sheet already was bloated. It totaled 20% of Japan's economy. Now it's about 30%.

Germany's 1920s hyperinflation resulted from similar monetary madness. Easy money in America under Greenspan was bad enough. Bernanke made him look tame. Since 2008, he more than tripled the Fed's balance sheet from about 6% of GDP to 20%, and hasn't quit yet.

The Bank of England (BOE) matched the Fed. Perhaps it feels what's good for the goose is good for the gander. Good for what must be asked? Bankers and corporate giants had a party. Ordinary households were entirely left out. Potentially an unprecedented train wreck approaches.

Since 2011, the European Central Bank (ECB) led the money printing global race. Its balance sheet expanded to almost 30% of GDP for 17 member countries. Each dissimilar from the others, they're paying a collective price.

PIMCO's Mohamed El-Erian sounded an alarm asking what happens if central banks fail? They flooded Western economies and Japan with money irresponsibly. El-Erian believes they "no longer" should keep doing it. Their policies are losing effectiveness. Greater "collateral damage and unintended circumstances" are increasing.

While short-term liquidity infusion effects are clear, longer-term ones raise concerns. Bottom line, says El-Erian, is that "central banks can no longer - indeed, should no longer - carry the bulk of the policy burden."

"Rather, it is a recognition of the declining effectiveness of central bank tools in countering deleveraging forces amid impediments to growth that dominate the outlook." It's also about growing risks too great too ignore. "(S)afe deleveraging" must replace years of monetary madness.

The global system's "Western core" weakened and "multilaterism is challenged." Central banks may have built "expensive bridges to nowhere." Ripple effects from are felt globally. Their "ballooned" balance sheets are dangerously overstretched.

Debt crises persist. Economies are bailout dependent. Policies so far avoided crashes. At issue is for how long? Europe is especially troubled. Zombie Greece awaits its obituary to be written. Portugal's on the verge of cratering. Spain and Italy aren't far behind. France and Britain are weak. Germany, the continent's underpining, shows disturbing signs.

Rising bond yields signal trouble. Some financial analysts suggest euro crisis round two arrived or at the least draws near. A Financial Times/Brookings Institution report said the world economy "remains on life support." It's levitating on an ocean of money. According to Brookings' Eswar Prasad:

"The global economic recovery is still spluttering due to a lack of robust demand, policy tools that are stretched to their limits and unable to muster much traction, and enormous risks posed by weak financial systems and political uncertainty."

A worried Wall Street Journal article headlined, "Sowing Seeds of the Next Major Crisis," saying:

In America and Europe, private sector "dependence on government support" produces "excessive risk-taking, distortions in capital markets, and" greater inflationary pressures. The foundation for the next crisis looms.

What worked last time won't next time around. Unpalatable consequences await. When risk stops being a dirty word, today's "unwitting experiment in state-influenced capital markets may be sowing the seeds of the next crisis."

Fragility threatens greater crisis with few effective tools left. Global slowdowns and declines are increasing. Troubled Greece is a corpse awaiting burial. Spain's pain contaminates the continent.

What's a central banker to do? There's "little they can do on their own," says El-Erian. Avoiding global depression conditions may have only delayed them. Main Street America and Europe already experience them.

Monetary madness put central banks in a box. They made their bed and have to sleep in it. So do ordinary households victimized by their policies. Western banks, other corporate giants, and rich elites got the benefits. They got the pain. It's not getting better. It's getting worse.

The mother of all walls approaches. Rising inflation may signal it. Housing's continued crisis prevents recovery. Financing remains totally dependent on government support.

Risky liar loans keep being made. It proved past mistakes taught nothing. Weiss notes worrisome "deadly cancers." Wall Street central bankers run things. Elected leaders were shoved aside.

Instead of financing growth through savings and investments, debtor economies are financed with fiat currencies. Instead of prudent investing, speculative excess dominates financial markets.

Bad endings are preordained. How bad depends on how long imprudence prevails. It shows no sign of ebbing. The longer it's sustained, the worse the outcome.

Former bank regulator/financial fraud expert Bill Black believes today's crisis is 70 times larger than the collapse of the S&L industry in the late 1980s.

"(G)enius technocrats" aren't in the wings with solutions. Forgotten past mistakes are repeated. Consequences are far more grave. Unprecedented fraud produces today's profits.

Later on watch out. Catastrophe awaits to arrive. It'll choose its own time, place, and severity, but promises harder times perhaps than anyone can imagine. Postmortems will tell all. Don't they always when it's too late to matter?

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

http://www.progressiveradionetwork.com/the-progressive-news-hour/.
Report this post as:
Share on: Twitter, Facebook, Google+

add your comments


© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy