Working on this new server in php7...
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

Approaching Financial Abyss

by Stephen Lendman Tuesday, Jul. 24, 2012 at 9:04 PM
lendmanstephen@sbcglobal.net

class war

Approaching Financial Abyss

An ocean of liquidity and institutionalized fraud alone keep dysfunctional economies from imploding.

Conditions look increasingly grim. Political solutions resolve nothing. On July 20, Der Spiegel headlined "Merkel Is Driving Europe into the Abyss." It quoted the Financial daily Handelsblatt saying:

"German Chancellor Angela Merkel has managed once again to get a parliamentary majority. But who cares? No one."

"Regardless of whether the vote passes with or without the opposition, more questions than answers remain. Since the financial crisis began two years ago, euro-zone leaders have passed one aid package after the next, increasing Germany's liability. Little has come of it. The situation in the debt-ridden countries has not improved."

"It's no wonder that Germans are asking why they should have to bail out banks with their hard-earned money when these institutions have only wasted and squandered everything."

The Frankfurter Allgemeine Zeitung complained about one bailout after another. Today Spain and soon Italy it said. How long will German taxpayers put up with "pay(ing) for the faulty speculation of banks?"

Suddeutsche Zeitung called social peace in Spain "fragile." People are outraged for good reason. "There isn't a single institution of public life that hasn't been hit by a major crisis of confidence." Hope is now a rare commodity.

Die Tageszeitung said Eurozone leaders have no one to blame but themselves.

Die Welt said political majorities contradict popular sentiment. Euro-skeptics aren't visible in parliaments. Saving the currency "appear(s) to be an elite project." Germany's next election may "be the last time that a clear majority (supports) European solidarity."

Well before crisis conditions erupted in fall 2007, virtually all significant policy measures failed. Instead of scrapping bad schemes, they're perpetuated.

Greece represents the epicenter of failure. Prime Minister Anotonis Damaris says his country is in Depression. It matches the worst of the 1930s.

It can't possibly meet its fiscal targets. It's collapsing in plain sight. Its national railway company just suspended all international trains.

Rumors now spread about Eurozone leaders agreeing to let Athens go it alone outside the union. Inevitability dictates policy. Once unthinkable Grexit becomes acceptable policy.

One analyst invoked the cockroach theory. He said Greece's departure means others will follow. Economic/financial trouble is contagious. It's a European disease. It affects America and other regions. It's global. Conditions are getting worse, not better.

On July 20, Spanish equities plunged 5.8%. It was their worst day in two years. On July 23, 10-year bond yields reached 7.57%. Meltdown affected five and two-year paper. They soared respectively to 7.35% and 6.55%.

A confidence crisis is deepening. Normura's Jens Nordvig said "disorderly" moves in Spanish bonds suggest Madrid is "about to lose market access." Like Greece, it's collapsing. Analysts expect Italy to be next.

At the same time, the euro hit a two-year against the dollar. Signs show it going lower. Severe structural weakness defines Europe. At some point, policy makers will exhaust rabbits. They buy time, nothing else.

Greece stumbles along one bailout at a time. The end of the road approaches. On July 26, Greek Finance Minister Yannis Stournaras faces a deadline to give Troika leaders details on his latest austerity package.

If rejected, civil servants don't get paid. What remains of pensions won't be funded. Other budget priorities will be left hanging. On July 20, the ECB said Greek government debt no longer is acceptable collateral for low-cost loans.

Conditions in Spain keep worsening. Valencia and other troubled regions say they need bailout help. At issue, of course, is who'll provide it. The European Financial Stability Facility (EFSF) is exhausting resources and maneuvering room.

Debt holders may have to take haircuts. Default whispers are heard. An IMF report suggested the unthinkable. It's losing confidence in the Eurozone experiment. It was an idea doomed to fail. Breaking up is hard but inevitable.

Months ago, the late Bob Chapman said Germany was printing Deutsche Marks and France francs in preparation. Perhaps other Eurozone countries are doing the same thing.

Economic reports are grim. GDP forecasts creep lower. US retail sales show negative reads. The Philadelphia Fed survey had nearly half the region's manufacturers saying they'll cut production.

Consumer sentiment is extremely glum. Leading indicators are turning negative. Surveys show hiring plans are contracting.

A record 46 million Americans get food stamps. Over the past four years, on average 400,000 per month enrolled. Others need them but aren't eligible.

America's worst drought in half a century compounds trouble. Higher food prices affect other purchases. Resources go for militarism, wars, homeland security, universal spying, banker bailouts, and other handouts to corporate favorites.

Virtually nothing is done to stimulate growth. A yearend bipartisan "grand bargain" triggers an automatic $1.2 trillion in largely discretionary spending cuts.

At least another trillion in sequestered government spending is also scheduled. Expect trillions more announced in the new year no matter which party controls Congress and/or the White House.

Smart money predicts hard times getting harder. Conditions for most people already are disastrous. Imagine what they'll face next year and beyond.

Progressive Radio News Hour regular Jack Rasmus predicts another banking crisis. His policy failures short list includes:

(1) the negative relationship between "real asset investments" and speculation.

(2) "the changing relationship between central bank money supply and internal bank forms of credit creation."

(3) "the critical causal interdependencies between forms of debt and income."

Rasmus calls what's going on "systemic fragility." He describes it in terms of debt levels, repayment terms, and cash flow. It causes "household consumption fragility."

Resulting deterioration causes contracting business investment and spending as well as lower household consumption.

He calls financial crash precipitated contractions abnormal. They're unrelated to external shocks. They're "epic recessions." They're characterized by "systemic fragility, asset price bubbles and crashes, and more severe" contracting conditions than in conventional recessions.

They also last longer and are harder to resolve. They're less responsive to traditional remedies. Recovery is tougher to achieve. It's impossible when bad policies compound earlier ones.

Monetary stimulus produces short-term relief. It's largely illusory. Quick fixes don't work. At best they buy time. Deep-seated problems remain. The longer they continue unresolved, the more intractable they get.

Temporary stabilization is self-defeating. It generates greater deterioration. Bad monetary and fiscal policies worsen "public balance sheet fragility."

"Contrary to mainstream economics, there is no such thing as a single price system responding predictably to supply and demand" to return equilibrium conditions. Current policy measures aren't improving things. They're worsening them.

From 2009 - 2011, Obama's three economic recovery programs failed. Heading toward 2013, conditions look dismal.

They're not helped by a financial system based on fraud. Addressing the Libor scandal, Paul Craig Roberts said the Fed and Bank of England fix interest rates "at historic low levels (to) mask the insolvency" of major banks.

As a result, Libor rigging is permitted to prop up a system that might go bust without it. Imagine needing fraud to keep operating. It hardly matters what harm it causes.

Libor is only one part of "the interest rate rigging scandal," explained Roberts. The Fed rigs rates. How else could debt issuances yield negative returns in terms of inflation.

Unrestrained financial chicanery caused today's crisis. Self-regulating markets commit fraud with impunity. Incentives are embedded to do it.

Resolving today's crisis involves restoring regulatory sanity. A corporate/government conspiracy prevents it. Problems fester and worsen.

How long can "negative interest rates continue while debt explodes upward?" Avoiding "armageddon" should be prioritized.

Like terrorist threats used to destroy freedoms, financial crisis conditions have the Fed operating "far outside its charter and normal....behavior.”

What's ongoing is "irresponsible and thoughtless," says Roberts. Years of financialization, deregulation, and manipulation "caused a financial crisis" only fraud can manage.

Imagine economies sustained only by grand theft. Imagine discarding most in it so privileged few prosper. Imagine an unholy government/business alliance that profits by doing harm.

Imagine media scoundrels ignoring it. Imagine an eventual day of reckoning. All Ponzi schemes collapse. Some go on interminably before imploding. This one long ago outlived its normal lifespan.

It's on borrowed time. When it goes, watch out. Ellen Brown's Public Banking Institute remedies await. William Jennings Brown explained long ago. Brown quoted him saying:

Fraudsters "tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business."

"I stand with Jefferson (and say) as he did, that the issue of money is a function of the government and that the banks should go out of the governing business."

(W)hen we have restored the money of the Constitution, all other necessary reforms will be possible, and....until that is done there is no reform that can be accomplished."

Bryant was a leading political figure of his time (1860 - 1925). He served in Congress (1891 - 1895) and as Secretary of State under Woodrow Wilson (1913 - 1915).

He ran for president three times - in 1896, 1900 and 1908. He endorsed the Spanish-American War but opposed subsequent imperialism. In 1896, he supported bimetallism (free silver). He believed it would bring prosperity. He opposed the gold standard.

His Cross of Gold speech said "you shall not crucify mankind upon a cross of gold." It's one of history's most famous. It got him the Democrat party's presidential nomination.

Republican William McKinley defeated him. Big business supported him. Imagine what a Bryan presidency might have meant. Perhaps money power would have returned to people where it belongs.

It can now if they sustain struggle for rights constitutionally theirs. It's the law. It's time it was enforced and upheld.

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

His new book is titled "How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War"

http://www.claritypress.com/Lendman.html

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