Busted: Bankers and The Global Economy

November 14, 2008

Hal Turner: Dollar About to Crash (Video)

Filed under: banking, money, politics — Tags: , , , , , — digitaleconomy @ 11:27 pm

Force Majeure (French for “superior force”) is a common clause in contracts which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as war, strike, riot, crime, act of God (e.g., flooding, earthquake, volcano), prevents one or both parties from fulfilling their obligations under the contract. However, force majeure is not intended to excuse negligence or other malfeasance of a party, as where non-performance is caused by the usual and natural consequences of external forces (e.g., predicted rain stops an outdoor event), or where the intervening circumstances are specifically contemplated.

Naturally, there is the line about gold being a hedge against collapse which is debatable since determining valuation is an issue, at least for the average Joe. Further, having gold sitting around during a national crisis with riots is of debatable safety. Hal Turner’s suggestion that you exchange your currency overseas is a viable option and would work in this scenario as well as could be expected.  Hal Turner’s statement is generally in line with what is on this website. Is this currency collapse a fabrication?  Considering the behind-the-scenes activities of central bankers or the International Society of Bankers, I think not.  I am quite familiar with that. The national economy has just been fleeced for $3 trillion dollars with the bailout. Think hard and take whatever steps you deem appropriate. ~ E. Manning

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November 12, 2008

Discouraged U.S. Treasury Takes Other Options

illiquidity support

illiquidity support

The major determination of the initial $700 billion bailout to buy up devalued securities has been scrapped. “Illiquidity in this sector is raising the cost” coupled with continued pressures on consumer credit. “This is creating a heavy burden on the American people and reducing the number of jobs in our economy.” Obviously, Paulson’s original take on the bailout was heavily overestimated.

What U.S. Treasury Secretary Henry Paulson has just admitted is that the functionality, transparency and the scope of the defective banking instruments is so poor, that buying them up won’t solve the problem or would involve a significantly larger sum of taxpayer money, showing a huge chasm in the underlying viability in the U.S. and global banking industry and perhaps the U.S. economy as well.

The bailout made only a month ago won’t deliver what was promised. Secretary Paulson pitched the bailout plan as a way to rid bank balance sheets of illiquid mortgage assets. Congress may show resistance to releasing the remaining $350 million in funds for future purposes. The real problem is that the national bailout won’t work at all. Banks are still holding the toxic debt that they created.

92308-paulson-bernanke-testifyThe United States seems to be stuck in a netherworld of economic dysfunction. Now the U.S. Treasury and Federal Reserve officials are exploring another facility with the idea of supporting the market for securities backed by assets. Paulson wants to use bailout money to encourage investing again. Investing in a terminally broken system is not the answer and a paramount oversight on Paulson’s part. His misjudgment is just another reason why Paulson should not be allowed to continue to tinker with the financial system. He doesn’t have the expertise required, further muddied by a failed and hopelessly bankrupt and antiquated system. This portends bad things for the U.S. economy and the world, but even worse, the U.S. Treasury is now misrepresenting previous actions without answering to any other authority under the guise of failure. Has anyone really studied the problem enough to be able to develop a core solution?

Continuing to invest in the same bankrupt insanity is poor thinking at best. Trying to convince investors to do the same thing is even worse. There is a push overseas to rebuild a new monetary architecture with a new global financial society. Will desperate American politicians pile on in an effort to redeem themselves and what is left of our failing financial system? What real options does America have?
~ E. Manning

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