Busted: Bankers and The Global Economy

February 5, 2008

Feeling the Silence

bernankenigelparry.jpgThe silence is noticeable. The U.S. Federal Reserve has been very quiet except for making measured changes. There is no effort to apply publicity. You could almost hear a pin drop if it were not for the din of the press. “The Reserve Bank of Australia, the Bank of England and the European Central Bank are all due to meet and dealers will be focusing on whether they are concerned about the severity of the U.S. slowdown and whether it will affect their economies.” Since the U.S. Fed made recent interest cuts the world is playing a waiting game, a holding of collective breaths as the truth begins to reveal itself.

Even the Bank of England has resisted the urge to slash interest rates as the world consortium of Reserve Banks, the venerable Society of Bankers measures the situation. Most are holding their own or have even brought interest rates up to keep their economies from overheating as well as holding down inflationary pressures.

Meanwhile, President Bush has taken center stage from the Fed as he issued his record-breaking budget of 3.1 trillion dollars. The United States continues to take the world by storm as the country recklessly posts record budgets and the national debt increases without abate. In typical fashion, the United States does the accounting games to show how the budget will be balanced in 5 years. Our neighbor, Canada has a more reasoned approach. Canadian Finance Minister Jim Flaherty has put down the idea of extra federal spending. “This is a time of some economic slowness. This is a time for careful economic management of the Canadian budget and the Canadian economy. This is not a time for excessive spending.”

The United States has a lesson that could be learned from its neighbors. Reckless spending topped with poor bank and financial management in the States has brought a treacherous situation into the global market and banking system as the U.S. continues to ride a bubble of national spending that borders on the obscene, even the apocalyptic. What will the central banks of the world do to protect themselves from such recklessness? How will worldwide commercial banking shield themselves from immoral speculation in the U.S. banking and mortgage industry? Will there be a global backlash against the ego-centric United States? The position of the New World Order claims a global economy. Only time will tell if the rest of the world economy will protect itself by creating a distance from the monetary graft of business and government in the United States.

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