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.

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October 9, 2010

World economy breaking with US

As the US economy teeters on the edge of decline and a double dip recession, emerging economies continue to grow at a fast pace, fueled by multinational corporations. This changing global economy reveals a United States that is not the center of the economic world.

Financial leaders have joined hands to decide how to boost the global economy at the annual IMF and World Bank meeting. A number of these financial leaders suggest a break up, what is known as a “de-coupling”, in the wings for a number of years, but gaining traction as the US economy stagnates. Central bankers, along with complicit US politicians, have rode the US horse into the ground and now have their eyes on the next rising star to enhance their prosperity. Most politicians advertise that the US will live forever, even though powerhouse nations through history have ebbed like the tidal flow.

The world is breaking away from the US as the consumer of last resort,” said analyst Edward Harrison, the founder of CreditWriteDowns.com. “You’ll see a lot more importance in China, in Russia.” Corporate multinationals and US politicians have raided the US economy over the last thirty years and put that stock in other economies like China, Brazil, Russia and India in the name of globalism. The view is that growth in the global economy will be much more dependent upon these countries than on the “developed economies.” Whether this is true or not remains to be seen.

Meanwhile, the US continues to run by idiot lawmakers that are afraid of multinational corporate power or are having their pockets lined behind the scenes. Like the old Roman Empire, the US seems bent on its’ own self-destruction to salve the interests of a few “leaders of men.”

March 11, 2009

U.S. Economy: Prepare for Depression and Inflation

Central Bankers Support More Inflation Now

European Union Rejects Breakneck Fiscal Stimulus

economic-knife

Article on Associated Content by E. Manning

We are living on the edge of an economic knife. The U.S. government is bailing virtually everyone in the financial system out. If this continues, the U.S. can expect hyperinflation that hasn’t been seen since post-war Germany down the road.

February 15, 2009

Rome: Central Banking, Finance See Crisis in Power

banking-goldNew U.S. Treasury Secretary, policy maker for the International Monetary Fund and former Federal Reserve presidential drone Timothy Geithner claims that the world faces the worst economic and financial crisis in decades . In his mind, government, facing growing domestic unease over the millions of jobs being lost, must respond forcefully. Geither has reassured the concerned central bankers and panicked finance ministers at the crisis meeting in Rome that President Barack Obama has ensured that implementing the new stimulus package would be done in a way that respects America’s international obligations.

“We are confronted with a broader and deeper slowdown than has been experienced in decades,” said U.S. Treasury Secretary Timothy Geithner at the G7 Economic Crisis Summit this weekend in Rome. “We will work closely with our colleagues in the G7 and the G20 to build consensus on reforms that match the scope of the problem revealed by this crisis.” Mr. Geithner working to win the hearts of skeptical fellow bankers and finance ministers as they seek to stabilize their own interests and continue to propel globalism and the power of central bankers to new heights. They want a new “Bretton Woods” monetary agreement that promises to change the world and build a New World Order.

At the same time, Geithner has admitted his lack of original thinking. He revealed to G7 ministers that he wants to “get it right” before launching the U.S. stimulus and bailout program so that he would not need to shift strategy midstream, while requesting their thoughts on U.S. strategy. Geithner is apparently still thinking inside the box of Wall Street training to the chagrin of his globalist friends. In fact, few of them are thinking outside of any box beyond their own self-interest.

obama-and-monetary-genius

Fearing a resurgence of protectionism and an obstacle to globalism, crisis talks ended in Rome Saturday with a unified pledge to do all that can be done to combat recession without distorting the myth of global free trade.

The media has proclaimed that Treasury Secretary Timothy Geithner came to the Rome this weekend to prove to Group of Seven colleagues that he was up to the job of fixing the U.S. financial system. The only item that he proved was that he is one of them, a brotherhood of bankers in lockstep meeting where control of the banking economy firmly rests: the halls of Rome and the Vatican.

Deutsche Bank Securities chief economist stated: “It’s not big enough. There are few details. The administration is trying to buy time and they don’t get the fact that we need to get something yesterday.” The underground criticism is that the Federal Reserve and the U.S. Government are not playing into the hands of globalists and Roman-based central bankers fast enough. In the meantime, Geithner is speaking out of two sides of his mouth. ~ E. Manning

November 10, 2008

The Global Finance Summit Rush to Rhetoric

bretton-woodsInternational hullabaloo from UK, France, and Germany for a new international financial architecture moved the G7 Finance Ministers into action. US president George Bush has snubbed the U.N. proposal to host an international summit, instead promoting an G8 summit of key leaders in Washington D.C. on November 15th. If successful, this may be the greatest chance since 1944 to influence the structure of international finance since the Bretton Woods accord. The proposals so far want to put the world’s leading industrialized economies and a select few emerging economies in charge, generally referred to as the G20. The role of central bankers is curiously absent in publicity. Doubtless, central bankers have the pulse of the situation and probably are largely responsible for a more conservative response to the European Union’s vivid promotion and sweeping enthusiasm last month.

global-financial-agreement1Activists have urged world leaders not to lose sight of perceived international challenges like climate change and poverty as authorities focus their efforts to repair the world’s financial system. Politicians are concerned about such things. Central bankers are not.

Not to be outdone or completely humiliated, the president of the U.N. General Assembly announced a high-level task force to review the global financial system, including the World Bank and IMF. ~ E. Manning

November 1, 2008

Economic Drain from IMF on Prime Economies

The International Monetary Fund has been bailing out emerging and secondary economies, putting prime economies like the U.S. and Britain in line to fork over more major funding. If you thought national deficits and crisis spending were enough, now prime economies have the IMF funding of lesser nations to consider. “Hundreds of millions of dollars” are needed now to support the sagging support structure of the IMF. This is relevant and an important dragging force on prime economies. If you live in the U.S. or Europe, that probably means you.

The cooling economic climate is resulting in economies across the globe taking evasive action to the degree possible, usually using the same methods employed in the United States like lowering central bank interest rates in order to sustain their banks and encourage lending. The IMF is acting as an insurance policy to shore up foundering economies. Prime Minister Gordon Brown is recommending a better insurance system to assist distressed nations, a topic that will doubtless be near the top of the Global Financial Summit in New York City this month. Financial security is now a global watch word.

Banks globally have been racing to bolster their balance sheets after a bevy of collapses and hastily arranged mergers were prompted by heavy losses from bad mortgage and financial derivatives. In the meantime, surface signs indicate a slight lessening in the immediate stability crisis as far as the current market is concerned. The U.S. government is tiptoeing quietly as the presidential election is only days away. More bad news will likely affect the election and most possibly the results. Until then, the U.S. will try to enforce an all quiet on the economic front. Will the stock markets cooperate after a banner week? Ah, there’s the rub. ~ E. Manning

October 30, 2008

Economic Hurricane Ravages Globe

U.S. economic contraction is in the news again as quarterly statistics pour in. Central bankers in economies across the world are cutting interest rates in the vain hope of sustaining banking rates for lending. While the United States is reporting the sharpest economic contraction in seven years, this statement is likely quoted to throw you off the economic trail that this is the worst economic fallout in a century. Why? It makes no sense to quote such a fact when the rest of the world is reeling with fear and trepidation with a full factual account. We are still on the front side of the hurricane as it comes into shore.

U.S. business collateral damage is being reported as U.S. citizen bail out of making major purchases and cut back on spending in an effort to avoid the plight of shrinking prosperity. Business have been hit hard by consumer cutbacks and lack of credit. Huge job losses have the nation staggering as confidence wanes. The talk of fiscal stimulus is in the air, now a constant topic in U.S. Congressional hearings. Strangely, many bankers, notably on Wall Street are still trying to issue bonuses to commissioned employees despite record losses and major taxpayer bailouts.

One bright light in the eyes of many is huge cash infusion and enlargement of central banking swap lines. This is seen as relieving the stress of frozen interbank lending even though this has not been thoroughly proved. U.S. bankers of any size have been notoriously resistant to anything but their own interests as they seek government guarantees for every aspect of their businesses. The other down side is the deflationary havoc that this will ultimately play on the dollar in the long term. However, short-term stability is main concern of most parties across the globe.

The International Monetary Fund has become the latest scorekeeping organization for tracking the plight of foreign and emerging economies in crisis. In any event, the news is overwhelmingly bad. While the news is mostly bad, it isn’t bad for everyone. Economic damage from the recession has slowed global growth, but has strengthened the dollar, allowing for a temporary export blitz for many capital goods like in the aviation industry. This temporary bonus can’t last, but is the lone bright spot in business on the U.S. horizon. The United States has once again become a global store house for many investors that need the feeling of safety.

The world certainly isn’t over, but Americans and other economies are going to have to reduce their expectations and living standards for some time while everyone waits for the cyclical upturn. Unfortunately, we are still seeing downturns in most markets, notably in the housing industry as nearly 2700 homes are day are foreclosed by U.S. bankers. This is putting a huge strain on the housing market and the U.S. economy. For the first time in history, the U.S. government has seen fit to bail out everyone but the American people. In the past, the American people were the ONLY recipients of U.S. economic bailouts.

The banking criminals that brought this debacle about are hanging in the dark shadows, hoping that the massive crisis will render them bulletproof as far as criminal prosecution is concerned. Unfortunately, ignorance continues to rear its ugly head. Government, business and the people are so overwhelmed, they really can’t see the forest for the trees. Whether the nation has the will to punish for past conduct as well as protect against future conduct of abusive practices remains to be seen. It is clear that the world cannot afford another financial debacle like this again. Politicians are looking to the upcoming Summit for answers and ideas. Have no doubt that security is on the minds of most politicians and global citizens. Decisions will be made with that in mind.
~ E. Manning

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