Busted: Bankers and The Global Economy

September 30, 2008

Financial Collapse: Fear & National Resentment

monetary whirlpool

monetary whirlpool

Global reports state that the global credit crisis has deepened. Banks have stopped lending to one another. Britain and Europe are encountering many of the same problems as the United States. Central bankers are dumping cash onto the market and playing the same game as the Federal Reserve through auctions to keep commercial banks on life support. Who is to blame? Today, the blame is being cast on the collapse of Lehman Brothers, but the reality is a tragic loss of confidence brought on by bankers themselves. Some of the best educated men and women on the planet have been powerless to improve the situation.

Commercial bankers have locked up the market and the only option central bankers think they have is to dump money into banks, in effect, satisfying the “need for cash.” The need for cash and credit is a symptom of the larger problem: panic by bankers because of their poor choices.

Economists publicly expect the longest recession in a quarter century with or without a bailout plan to rescue the battered banking industry. Most say the next six months are going to be very difficult. Market scare tactics say that if a bailout is not approved, a depression is likely as credit freezes up and markets collapse. The global consortium of central banks dumped an additional $630 billion into the global financial system, which will fuel both inflation and devalue currencies simultaneously. Central bankers are doing the same thing with other major currencies, portending a global debacle in an effort to keep the cash and credit flowing. On the other hand, the central bankers don’t want to be caught holding devalued cash, so now is the time to cleanse their palates. Central bankers only collect and horde gold among themselves since that is how they settle their accounts against each other.

stormy economic skies

stormy economic skies

Whether disaster can be averted or not, the United States has a right to do nothing, even to fail. The reality is that this is already what has happened as politicians and money managers stubbornly cling to the hope of sustaining what currently exists in the current power structure. The problem remains as a global crisis that even central bankers are ill-prepared to deal with.

George Bush warned Congress that they must act or damage to the U.S. economy will be painful and lasting. Congress seems to have rejected that notion. What the nation really has is a credibility crisis. Authorities seem to be more interested in their reputations than possible solutions. Meanwhile, many American scrimpers and savers are in a panic and most American voters resent the bailout efforts, convinced that the rescue effort is for the good of Wall Street and not the average man in America. Considering the decline in the U.S. living standard over the last few decades, the popular opinion to let banks fail and allow the system to unwind naturally is seen as likely to have little effect on meaningful personal assets in the eyes of most Americans. The real problem that panics bankers and politicians lies in the market correction and pricing standards in a bankrupt economy as values fall through the floor, creating still more bankruptcy and poverty for business and citizens.

The correction in the U.S. housing market bore a decline of more than 16 percent in July 2008 alone as the accounting totals have come rolling in. Americans are quickly becoming “upside-down” on mortgages on their homes, encouraging more defaults and foreclosures, even as more Americans lose their employment from an already failing economy.

The public line is that business must have a huge amounts of credit available. Business, like consumers have become increasingly dependent on credit while overpaying executives and paying stockholders instead of reinvesting in themselves. With credit becoming increasingly tight, businesses may find it tough to obtain short-term loans to meet payrolls or purchase inventory. That may lead to job layoffs, which could ripple through the economy in a matter of weeks. The bottom line is that solvent businesses do not need large amounts of credit for everyday business. In the “old days,” business used to borrow for expansion purposes only. Business needs were met by the influx of cash coming in from clients and customers. Have business standards declined so dramatically in the name of personal profit taking or is this statement simply a political red herring to generate urgency?

Increasingly, Americans have become more and more detached from the wealth and prosperity of Corporate and Political America. They have become beasts of burden for the affluent. Considering the circumstances, it isn’t hard to see why many Americans don’t favor a bailout, even if they risk losing a few thousand in a retirement account they may never see anyway. There is an underground pessimism and resentment that has come to rest in much of mainstream America. ~ E. Manning

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5 Comments

  1. bro, listen to me. You calling your congressmen yesterday and telling them you didn’t want the tax payer to give the 700 Billion caused the market to drop 700 points. There will be oversight now and strict regulations. Don’t think of it as a bailout, think of it as an investment. We will get our money back. Obama will make sure that happens.

    Comment by bigbrother — September 30, 2008 @ 12:59 pm

  2. When I first started working, banks and car dealers wouldn’t give you a loan you couldn’t afford to pay for. They had morals and fiscal responsiblity to the community. We need to go back to that.

    Comment by dinosaur — September 30, 2008 @ 3:01 pm

  3. main street, NOT wall street is the key to our economy… Wall street is just the key to campaign-finance!
    We should all be grateful that this happened when it did…
    The only reason we’re not stuck with this $700 billion tab is because 5 weeks out, the politicians need the voters more than they need the big campaign-contributors… If the issue pops up again after election day, all the voter-outrage in the world won’t impact the decision. They’ll take care of the big campaign-contributors on Wall Street in a heartbeat.

    Comment by MainStreet — September 30, 2008 @ 3:07 pm

  4. The more I hear about what these politicians are saying about this bailout the more I think no one even knows what it is or what they are talking about. I think they are all just talking to hear themselves talk. They are playing politics with all of our lively hoods. All I am hearing is both sides blaming the other side. What is that accomplishing? They are all to worried about being re-elected instead of finding a solution to this financial crisis. We need some real leadership here. Someone needs to step up to the plate and take charge and make some hard decisions and figure this whole situation out. This is getting out of hand.

    Comment by outofhand — September 30, 2008 @ 3:16 pm

  5. It is not the economy that is killing America it is corruption. It is everywhere. We’ve all seen it. Our leadership is corrupt and we have been robbed. Our money, our jobs, our freedoms, and our justice. But worst of all, our future will be taken. How can the problems that face us all, ever be solved when those we trust continue to sell us out.

    Comment by wiegand — September 30, 2008 @ 3:19 pm


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