Busted: Bankers and The Global Economy

September 20, 2008

U.S. Economy: Stagflation in the Wings

The dark underbelly of arrogant and evil monetary policy been put into place today. The decision isn’t new, but is repeated constantly. This decision will affect you and everything you do from today. The news seems innocent and matter-of-fact on the surface and is reported by the media in that fashion, as if central bankers are doing all of us a favor. The reality is far from innocent or hum-drum. Central bankers are pumping billions of dollars in American greenbacks into monetary systems to “sustain the market.”

In response to financial turmoil and lack of confidence, central banks began injecting huge amounts of cash into the world financial system in an effort to make sure that firms needing monetary resources to stay afloat could actually find some. The British central bank, the U.S. Federal Reserve, the European Central Bank and the Swiss central bank: let call them the International Society of Bankers, have injected around $400 billion into the global financial system so far.

global credit

global credit

The idea behind all of this credit pumping is liquidity. This liquidity is for lending, borrowing and who knows what else. All the liquidity isn’t helping you or me directly most of the time. The liquidity is supporting the market to keep the market from tanking in a rather large way or at least to keep global business from stalling. According to central bankers, this is supposed to be good. What is the down side for all this global credit?

Remember that the stock and trade in finance today is the dollar. It is the toy that bankers use to get business done globally and the tool used to manipulate (both good and bad) global markets. As a result, the effect of the dollar on the global economy is likely to be very different from the effect on the U.S. national economy.

As an economist I could talk about M3, job statistics, the national debt or use any number of magical numbers and percentages. I could try to impress you with enormous intellect and knowledge while talking over your head. Sufficient is the fact that record numbers of jobs have gone by the wayside this year and even more jobs are being pumped out the U.S. economy by multinational corporations to promote their immediate bottom line. Sufficient is the fact that the mortgage meltdown is summarily destroying the banking, mortgage and finance system. The causes of the meltdown were designed to bolster and send the industry to new heights of profitability. Sufficient is the fact that the federal government has opted to cover, guaranteeing practically every business failure and misjudgment with credit that they don’t have from the central bankers themselves. That is reality.

A key reality is being ignored that has been previously discussed. U.S. politicians have put the gloss on the reality of our national recession by calling it a slowdown. U.S. politicians and most economists put the gloss on the reality of our national inflation rate by minimizing it with false figures and deceptive tactics. U.S. politicians and most economists don’t want to recognize what this nation has staring us in the face as a result of continual bloodletting of the dollar around the world.

That evil is stagflation. Ben Bernanke has tried to prove that we aren’t going through a 1970’s style economic situation, as if we should be looking at the 1970’s as some kind of measuring stick for today’s economic blight. He is missing the point that the building blocks of the economy are not only different, but that many of the pressures driving the forces behind the economy, now a global economy, is also very different. Comparing apples and oranges is useful only if you can agree that they are fruit, but the sameness ends there. Need I say more? The texture, flavor, nutritional value and uses are similar but different. The same is true today. The only truth that remains the same is the central bankers are behind the economy to profit themselves. All the measuring sticks have altered, corrupted or adjusted to a fine promotional edge. Economics has become something other than science: a marketing scheme. Central bankers are working their global magic and deception on a global basis without apology and most of the world is thanking them for it.

Stagflation is an economic situation in which inflation and economic stagnation occur simultaneously and remain unchecked for a period of time. This is a combination of policy by central bankers that allow excessive growth of the money supply and an economic shock such as a excessive regulation, huge job losses, declining wages and unchecked inflationary prices. We have all of these in place and in force right now.

Continually dumping more greenbacks on the global market may have short-term global and corporate benefits. The central bankers also benefit by increasing the debt base, charging more interest for various and sundry economies and swapping cash for gold held in their vaults as collateral. The short-term effect of acute dollar liquidity on the U.S. economy is very different on all terms.

As the fires of inflation are stoked and as the national economy continues its descent into the economic abyss, the mire of stagflation only worsens, creating a national and ultimately a global dilemma if left unchecked or unmitigated. All of this affects you in very real terms. You are living part of that dilemma today.

Continued government guarantees and nationalization of business across the board makes government larger and creates a larger drain on the American taxpayer as well. In essence, you are paying to sustain the global economy, while the central bankers collect the cream at the top. You are the human capital from which all profits are milked with little reward. The problem behind all of this in a declining economy is that a declining economy cannot fund all of the bells and whistles required by endless debt creation. Ultimately, the situtation is not sustainable.

The nation is running into a wall of debt that must be addressed through some new invention of government and finance in order to keep the scheme going. That is where the nation is at today as we pay collectively through the nose for the privilege of being part of the stock and trade of global finance. The central bankers and the U.S. government have already joined forces in a quasi-governmental scheme for economic power and control as the economy is slowly drained. The men and women that we have elected have brought this to bear. That is why this election is probably more important that any other. Make the right choice.

Stagflation may not be avoidable, but it isn’t too late to save what is left of the people in this nation. We are “human capital,” worth far more than banker grist. ~ E. Manning

Originally published 9/18/08 on TNTalk!

September 13, 2008

Investment Bankers Fear Panic and Unrest

Paulson's Grand Staircase?

Paulson at the Grand Staircase?

With the shakeout of Fannie Mae and Freddie Mac, Lehman Brothers almost seems an afterthought these days. The firm is clearly looking for salvation, but Big Government doesn’t seem so eager for a Bear Stearns type bailout. The problem is that the panic on Wall Street doesn’t affect only the plight of Lehman Brothers, but has the ability to touch the entire scope of Wall Street resulting in economic ripples and collateral damage throughout the U.S. economy.

Are the U.S. Treasury and the Federal Reserve in such fear that no solution is evident or is the weakness of banking institutions creating a problem in an effort to support failing Lehman Brothers? It doesn’t take a rocket scientist to discern that the nation is in the midst of another economic crossroads. However, the national and investor confidence doesn’t ring true with the “optimism” suggested by the press last Monday with Fannie and Freddie in the stock market.

In the past, the god of confidence has been the mainstay of U.S. economic policy. Confidence can only be harmed by allowing failing Wall Street to collapse. Yet, if decline and collapse what were to happen, that is exactly what should happen. The federal government has put themselves in the business of shoring business up instead of allowing for the consequences of business risk or business failures as a result of banking abuse. The reluctance of U.S. authorities to shore up the perception of a crumbling system indicates other more severe economic issues at hand behind the scenes. Wall Street stress is just the tip of the iceberg.
~ E. Manning

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