VHeadline's Washington DC-based commentarist Chris Herz writes: This morning the US Federal Reserve, NOT waiting for the action of the Congress on the pending give-away to the banks issued to its member banks fully $650 billions in new credit. This is on top of its commitment in the past two or three weeks of approximately $400 billions. Add these figures to the forthcoming $700 billion and you begin to get an idea of the dimensions of this latest increase in the flood of unsupported dollars already sloshing around in the world capital markets.
Further, taking advantage of the cover provided by the on-going banking crisis the US Senate passed an appropriation for the Pentagon of fully a trillion dollars. This last went with hardly a mention in the corporate press.
I am utterly flabbergasted at such a level of sheer financial recklessness.
- This exceeds the panicky and useless (except to deepen the disaster) reactions of the bankers of 1929 by an order of interstellar magnitude.
Please don't get me wrong; I am rarely surprised at any crime committed by Wall Street's masters of the universe and their sycophantic wholly-owned political subsidiaries here in Washington. But generally speaking they pull out all the stops to protect their own positions at the apex of human society. To preserve their exaggerated social advantages for a few more short months or years they now finish the job of killing the host organism upon which these parasites have always depended. Like the rulers of the old Austro-Hungarian Empire, they know they are doomed, but they choose to go down doing as much damage as they possibly can.
We shall now have a massive write-down of the whole 55-trillion derivative market. All US securities, stocks included must now plunge in value as the dollar which backs them falls. And there never was much value in most of this paper to lose. The inflation caused by the catastrophe must spread world-wide, wherever US securities have been bought in the past. The whole of the good faith and credit of the US government is now in the dustbin with all the worthless sub-prime and derivatives paper.
The fruitless actions of the European Central Bank and other such organizations over the last few months in trying to prop up the dollar have all been undermined -- to the point where Europeans themselves are now flocking to buy Polish Zlotys and Czech Korunas, trading in their Euros to do so! Can you imagine -- Poland the new Switzerland?
The longer this goes on, the more damage to Euroland.
There might have been some small chance of saving the major structures of the US economy, and those of the rest of world finance, those that yet survive 30 years of silly neo-liberalism had the decision been made to let the worst malefactors on Wall Street crash, and use State resources to rescue productive enterprises dependent on capital from these banks. But now we will have both government and private sectors helpless in the face of the building tsunami.
But, 'tis an ill wind that blows no one no good. And this well-deserved credit blizzard offers to those hitherto suppressed by the Empire their moment to escape forever. At the end of all this all will see a new US economy somewhere between one-quarter and one-third its present size.
Carpe diem!
From the imperial capital
Chris Herz
cdherz44@yahoo.com
____________________________________
Venezuela is facing the most difficult period of its history with honest reporters crippled by sectarianism on top of rampant corruption within the administration and beyond, aided and abetted by criminal forces in the US and Spanish governments which cannot accept the sovereignty of the Venezuelan people to decide over their own future.
HELP US TO KEEP BRINGING YOU THE TRUTH
http://tinyurl.com/n4fg
No comments:
Post a Comment