Busted: Bankers and The Global Economy

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.

Advertisements

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

October 12, 2008

International Bankers: Time is Short

the IMF in better times

the IMF in better times

The International Monetary Fund, an international organization that oversees the global financial system based on economic policies of its member countries, proclaimed that time is short for consensus on the international financial crisis. The finance members of industrialized nations failed to agree on absolute and unified measures to end the crisis. The IMF expects a systemic meltdown if stability in financial markets is not achieved. While the international body recommends “exceptional vigilance, coordination and readiness to take bold action,” the body is leaving the pressure and responsibility on the collective bodies of national Finance Ministers. All this from an international body that claimed in August that there would be no recession in the Eurozone.

Solvency concerns are cited as the chief concern. The reality is that solvency is determined by a set of regulations that can easy be changed, as has happened in the United States. Therefore, the definition of solvency to a reasonable extent is in the hands of Finance Ministers and national leaders. Where such a change is seen as beneficial, such a move buys time when developing a consensus is especially important.

While consensus has been difficult, developing effective means to counteract the global financial crisis has been no less elusive. Panicked Finance Ministers are looking for support from the IMF or other global authorities in a effort to deal with the crisis. Britain has developed an interbank lending guarantee that has other nations stressing to compete.

In general, G-7 and G-20 ideas are essentially the same and somewhat short on creativity. Whether injecting capital into financial institutions and insurance companies, effectively nationalizing them, or buying up worthless mortgage assets, groups of Finance Ministers are chiefly examining the importance of uniform national guarantees to protect individual economies and to avoid creating a currency run. Encouraging monetary liquidity through central banking auctions has become a mainstay in prime economies.

Most telling perhaps is a statement made by the Brazilian Finance Minister, Guido Mangega, “The problems we are facing today in the global economy must be solved by several countries, they can’t be addressed by only one country or a single continent.” Finance Minsters from the G-20, not wishing to be left out of the loop, want emerging economies to be included within the ranks of G-7 Finance Ministers or by implication, involved as part of a larger authoritarian body.

Even Arab nations, whose prosperity seemed to make them immune from catastrophe are now encountering monetary issues, property value declines and business funding problems that threaten the Arab economic fabric as in much of the world. The Arab nations are largely isolated within the Islamic banking community except from within the burgeoning oil market, which in recent years has fueled inflation rates as high as 25 per cent.

As a result of the growing crisis, the United States is seen on many fronts, notably among Muslim leaders, as having no credibility whatever. Resentment, which is already high in religious circles, is multiplying because of the perception of financial betrayal and lack of wisdom. The push for Islamic banking within Muslim circles will continue despite any devaluation of the dollar experienced.

The issue created by injecting capital into banks dilutes monetary value and ownership of individual banks. While these types of measure can create the appearance of stability, diluting monetary value creates an ongoing increase in national, as well as global inflation. With increases in credit and cash generated for financial rescues, the end result is always inflationary as the devaluation of currency sets in. The only short-term winners are holding the gold and living off the interest for their services: central bankers. Meanwhile, central banking policies are behind the continued growth in inflation because a flawed economic model that mandates liquidity through monetary production. This is currently central banking’s best hope for economic stability. ~ E. Manning

October 9, 2008

IMF Global Outlook Darkens; Stabilization Dims

The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s,” the IMF said Wednesday in its World Economic Outlook. Several prime economies are on the edge of economic recession simultaneously. Even so world banking leaders insist on the idea of a recovery sometime in 2009. The IMF warns of “considerable downside risks” to that scenario, which assumes U.S. and European governments will succeed in their efforts to stabilize markets.

The problem behind the U.S. recovery is that the latest economic bailout assumes stability in overseas markets and the ability of foreign investors to lavish funding on the U.S. economy. With a global recession looming, this potential is quickly dimming as the U.S. economy faces still more rescue measures in the effort to stabilize the national economy. A global recession puts the entire premise of a quick U.S. success in dire straits. ~ E. Manning

October 8, 2008

Nationalizing U.S. Banks; Globalizing Banks

global bailout fever

global bailout fever

If there was ever a question about the nationalization of U.S. commercial banking, that question may be at an end. Treasury Secretary Henry Paulson signaled the government may invest in banks as the next step in trying to resolve the deepening credit crisis. What does investing in banks mean?

The bailout legislation that Congress passed last week to rescue financial institutions gave Henry Paulson broad authority that he intends to use beyond buying mortgage-related assets on bank balance sheets. Paulsen intends on using the initial $700 billion for a far grander notion. He intends to boost the capital of firms with cash infusions with idea of making the nation’s financial system stronger.

The International Monetary Fund has published that banks worldwide are not raising enough capital to offset losses to the tune of a $150 billion deficit. Henry Paulson and the U.S. Federal Government have arrived on their white horse to save the day.

There has been some discussion within the ranks of international central bankers and the G-7 finance ministers of a global banking bailout using identical policies. Britain has questioned this idea. Still, the turmoil is a global phenomenon that central bankers see advantage in addressing to secure their control. Undoubtedly, this will involve an enhanced system of controls and tools to manage the global economy. The real question remains: Are banks globalizing under a single economic control structure?

In Paulson’s mind, regulators will take measures to limit the systemic risk from any single bank failure. The reality is that the systemic risk has already been introduced due to the same lack of regulation. Allowing the same watchdogs to monitor the system is a questionable move that is apparently unavoidable. ~ E. Manning

June 14, 2008

Is the Fed Promoting a Global Banking System

One of the latest proposals by the Federal Reserve :

Banks and investment banks whose health is crucial to the global financial system should operate under a unified regulatory framework with “appropriate requirements for capital and liquidity”, according to Timothy Geithner, president of the Federal Reserve Bank of New York.

Geithner was the head of policy development at the International Monetary Fund. He became the president of the New York Federal Reserve Bank in mid-November of 2003. Do you see yet another global banking connection?

The reality is that any global system for banking is in reality in place right now and heralds back to the Roman Empire through the Roman Catholic Church and, of course, Rome. The difference is that central bankers are promoting their global reality instead of hiding their coalition. That global banking system is simply growing in power, both in the U.S. and abroad. Even the likes of Lew Rockwell have recently pointed at the “objectionable truth”. If you have been reading this blog, you already know the truth.

Create a free website or blog at WordPress.com.