Busted: Bankers and The Global Economy

June 21, 2011

A Chronicle of the Euro Crisis

Filed under: banking, economy, government, money — Tags: , , , , , — digitaleconomy @ 5:43 am

euroWhen the euro crisis started in Greece in October 2009, nobody had any idea how quickly or broadly it would spread — or how difficult it would be to solve. Below, some key dates in this still-unfolding saga.

October 2009 Greece revised its 2009 budget deficit to 12.5 percent of GDP from 3.7 percent. The dramatic news sparked a raft of downgrades by credit-rating agencies. By November, Greece’s budget deficit had ballooned to 15.4 percent of GDP.

February 2010 Greece is forced to put its budget under EU monitoring. Dramatic austerity measures are implemented in a bid to clean up the country’s finances in the coming years.

March 2010 The first Greek austerity package is passed: Value-added tax is raised by 2 percentage points, and salaries for civil servants are frozen. The size of annual savings is estimated to be roughly €4.8 billion ($6.8 billion).

May 2010 Euro-zone finance ministers and the International Monetary Fund (IMF) agree on an aid package for Greece worth €110 billion over three years. Officials plan to monitor Greece’s efforts to trim costs every three months.

A second austerity package is passed by the Greek parliament. Emergency measures aim to save €30 billion by 2013. Value-added tax is once again lifted by two percentage points, bringing it to 23 percent. Spending on defense, health and pensions is slashed.

May 2010 In a bid to prop up other financially ailing member states, the EU finance ministers and the IMF agree on a provisional safety net worth €750 billion to be in effect until 2013.

November 2010 Ireland asks for EU assistance. Under the safety net, the EU finance ministers agree on a bailout package with the IMF worth more than €85 billion over three years.

January 2011 The Irish parliament agrees to a drastic austerity plan.

March 2011 The European Council gives the green light to a permanent stability mechanism (ESM). Designed to take effect as of mid-2013, the fund will be worth €700 billion.

April 2011 Portugal asks the EU for financial assistance.

May 2011 The EU and the IMF sign off a bailout package for Portugal worth €78 billion. In return, Portugal pledges to enforce a program of cost-cutting measures and economic reforms.

June 2011 Greece plans a further raft of austerity and privatization measures. Meanwhile, the euro-zone countries, the ECB and the IMF argue about the structure and amount of future financial aid.

August 7, 2010

Dollar Deflation & the Grave Economy

Dark economic clouds are gathering over the United States as a second stage of national distraction arrives. Now that the BP disaster is over with, a new topic of angst is needed. Right on cue, the Federal Reserve and Ben Bernanke are considering the economic pains of their patient while looking after their own corporate bottom line and the continued enrichment of international bankers.

Bernanke warned in a speech eight years ago that “sustained deflation can be highly destructive to a modern economy” by leading  to a slow death from a rising real burden of debt. “Sufficient injections of money will ultimately always reverse a deflation,” claimed Bernanke.

New banking assessment by big commercial banking interests (Barclays, RBS, et al.) outside the U.S. show that the dollar is in a corner. Wedged tighter in that corner is the United States, which is now wholly dependent on the banking debt that continues to strip the nation. Uncle Ben and his international banking buddies are facing deflationary pressures as economic pressures fueled by rampant unemployment. Their perfect answer will be to start up the printing presses and to flood the international market with still more dollars, which I must admit will only fuel the fire of deflation.

One answer is to create another crisis with competing currencies. The Euro is a perfect candidate for more distraction, while international bankers continue to drain European and Asians nations of their wealth wherever possible. The Wall Street expansion into Europe and Asia has created still more opportunities to distract from dollar reality. Believe it or not, there are still more precious resources to drain. Multinational corporations are now in the cross hairs.

President Obama doesn’t really enter the equation. Perhaps he will once again arise to take “full responsibility” as he did in the BP debacle. No matter. The Washington lawmakers that create brilliant policy don’t matter, except to approve the imaginary creation of still more greenbacks, ringing their hands in political pretense as they hold out their hands for kickbacks and such. All of these cronies are mere cosmetic agents as international bankers continue the next phase of their rape and pillage policy. Bernanke is preparing to start with massive quantitative easing.

The warfare manual for international bankers says to print more dollars. They haven’t hit their 5 trillion dollar target yet. That is their goal. To completely denude the resources and capital of nations so that they can create their own nation that officially rules over all nations. They have the nations and banking community. They now seek the sustenance of the corporate oligarchy. Wall Street is simply a vehicle to bring this about. They seek ultimate power while pretending to be obsequious and eager to please. The idea is to bring the current system to its knees. Even though we have been conned by phoney money, they hold almost all of the real resources of value. We think the debt is real and have traded all manner of resources and labor for it.

Meanwhile, economic contraction is in the wings for the United States. The leading indicator per the Economic Cycle Research Institute is falling faster than since World War II. CPB Netherlands shows real issues with world trade. There is plenty more behind the scenes that shows a truly grave problem for thinking inside the box. Prepare for the unthinkable.

February 23, 2010

Strength of EU and Euro Threatened

Filed under: banking, corporatism, credit, economy, money, politics — Tags: , , , , , , , , — digitaleconomy @ 10:46 am

With the ongoing financial plight of Greece, the European Union is facing a growing threat of national bankruptcies. The consequences would be profound for the whole of the continent, especially German banks, which are highly exposed to risky debt. EU politicians are feeling increasingly panicky.

Europe is one of the hotter topics on the global financial circuit. The value of the battered euro has been falling since the Greek government confessed to the actual scope of its debt, cobbled together with shaky securities and kept secret for years by complicit bankers. Things are not looking significantly better and EU politicians are looking for a solution that will contain the financial fire.

October 10, 2008

Dollar Rally Due to Global Inflation?

safe haven again?

safe haven again?

The U.S. dollar is once again holding its status as a safe haven because of deteriorating economic outlooks in the global economy and increases in inflation overseas. The recent adjustment in oil prices is due to the leveling effect that inflation is having on economies coupled with recent U.S. government intervention in commodities futures.

The crisis in Iceland, Britain and much of Europe and Asia has electrified the so-called G-7 Finance Ministers to meet to decide on unified actions and strategies to bolster sagging economies.  Iceland refused to stand behind their failed banking system, resulting in large losses to British depositors. Prime Minister Gordon Brown has frozen the assets of Iceland in Britain to insure that losses by British depositors are covered as much as possible. The European Central Bank has also summarized the idea that recent exchange rate imbalances are due to the current financial crisis. Globally, banks are becoming more imperiled as the system locks down due to financial fears and the unknown effect of bad securities globally.

The general consensus is that the goal of the G-7 meeting must be to promote liquidity and growth. Those kind of financial moves dilute monetary systems and boost inflation. Even so, inflation is considered as a back door issue. Today, only stability is king. ~ E. Manning

October 6, 2008

Crisis Floods Global Markets

not all love bailouts

not all love bailouts

Governments and central banks around the world grasped at measures to contain the fast-spreading financial crisis today. Investor confidence reflected on global stocks. According to the media, investors have finally decided that a recession is inevitable.

The more powerful members of the EU have reacted in panic as market volatility continues. Similar events continue to unveil with bailouts in the works. Even Fortis has new ownership. In panic, central bankers are dumping billions of euros on the market, creating another global monetary inflation hazard. A few national banks throughout the EU have moved to guarantee depositor funds causing a rash of capital movement to guaranteed banks and undermining financial security for others. More European governments followed Germany’s lead offering guarantees to savers in a frantic effort to calm fears among investors over the worst financial crisis in 80 years. The big losers portend to be the shareholders of these institutions.

economic bondage

economic bondage

The British government has promised on Monday to protect citizens in the face of global financial turmoil. Investors are terrified that the government will require partial ownership in exchange for the bailout.

For more than a week, the U.S. Federal Reserve has been working to find new ownership and capital to cover to bankrupt Wachovia Bank, even issuing and quickly retracting their statements as deals have fallen through. Right now, the Fed is trying to coax Citigroup and Wells Fargo to break up the Wachovia’s assets. Even the Fed is learning to temper its enthusiasm as deals are worked out.

While none of this is especially good news on the surface, the really bad news remains the now unseen seeds planted by central bankers as they flood the market with euros or whatever monetary unit is seen as useful. This simply weakens an already weak economy and further dilutes the value of the currency, creating more inflationary pressure.

The really bad news behind all of this news is that the United States bailout success hinges so much on foreign investment from overseas. With a global crisis in the works, only the Muslim and Saudi countries are not yet reporting huge problems beyond apparent hyperinflation caused by the huge $700 billion yearly influx of greenbacks from America. They have so many devalued dollars that spending them is a challenge. Therein lies the crux of the problem. A vicious circle of events is creating a downward global spiral that cannot be readily or quickly overcome without a reinvention or substantial revision of a new monetary system, an idea that is reportedly in discussion by the International Society of Bankers (the global central banking franchises) as an easier way out of the looming crisis if events become unmanageable. ~ E. Manning

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

September 16, 2008

U.S. Banking Decline to Impact Euro

On the list of projections with the financial collapse of Lehman Brother is the resulting decline of the Euro in the European economy. However, European monetary experts are not publicly expecting a decline in European banking. They expect a weakening of growth in the European economy instead.

An ongoing debate has ensued for years about the coupling or decoupling of the U.S. economy from other economies. ‘We already have a tendency towards a worsening of the economy and this can be further enhanced by the current developments… We cannot fully decouple,” said European Central Bank Governing Councilman Ewald Nowotny.

The fear is that the U.S. economy will further move the Euro and the European Bloc into a recession. Strangely, the U.S. authorities still continue to deny a U.S. recession. By implication, even European bankers and economists recognize the reality and the truth of what resides in this nation.

European analysts are growing increasingly concerned that the European economy is now heading towards a ‘technical’ recession, or put more plainly, two consecutive quarters of contraction. Meanwhile, central bankers have already put protection mechanisms into place to protect both their investments and gold on hand at central banks. ~ E. Manning

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