Original Content at http://www.opednews.com/articles/opedne_sharon_k_071117_hey_buddy_2c_can_you_s.htm
November 18, 2007
Hey Buddy, Can You Spare $1,000 Trillion?
By sharon kayser
I write each editorial under the impression that a major event is going to prevent me from drafting the next one. My fear almost came true. This one was scheduled to be released early October then delayed due to an avalanche of scary news unseen before in my lifetime. The threat of 'monetary terrorism' has only one remedy called 'financial detoxification'. However, thanks for taking the time to read this column, which could have easily been much longer. As you will read, nobody can stop this freight train.
The story of the upcoming world crash is hidden in plain sight. Even mayor Bloomberg has jumped in the gloom and doom bandwagon: a global economic downturn was looming, triggered by the "lunacy" of public debt, he declared last month. Meanwhile denial continues. Although nearly 70% of the Americans do fear a recession, the possibility of a major crisis is not considered. A crisis? Not in my backyard, most of them think. It all boils down to faith. To be fair, the 'empire mentality' was born with history. Eventually people wake up to the harsh reality that the empire lied to them. The only successful government programs are wars and economic crises. When two or three decades of prosperity end with a crash and geopolitical crisis, what does this mean - frankly? Once again, the numbers tell a very different story than that which we are being told. Yes dear Readers, you're not hallucinating. There is currently at least a $1,000 trillion dollar black hole in the world economy. To get the full picture, please keep on reading.
We have 600 trillion in world liabilities plus more than a 400 trillion-derivatives neutron bomb, all of which will go off when the Westerners (from EU and US) will no longer be able to borrow. The credit crisis could be just beginning according to, the Calcutta-born Australian Satyajit Das , a derivatives specialist who speaks of nearly $500tn. Das doesn't chew his words:... Defaulting middle-class U.S. homeowners are blamed, but they are merely a pawn in the game," he says. "Those loans were invented so that hedge funds would have high-yield debt to buy..."
In America, the clock is dangerously ticking for consumers: the party's over, they are are truly tapped out. While it is difficult to make sense of mega-digits such as 1,000 trillion, this amount doesn't include consumers' debts. Although it is kind of tricky to say when the credit soufflé will flatten, those grasping the dangers of a negative savings rate are already taking action. Well, the smartest and they are a strict minority at this stage. Some amog the most 'cash-strapped' Americans raiding their 401(k)s . Not knowing what is really going on, many might be prompted to turn to the 2 trillion already in pre-approved when times were booming, in the form of credit cards. To give you an idea of the dire situation, last May and June saw spikes in the amount of revolving debt, 12.2% and 8.4% respectively. The consumer credit 'is' the next bubble without a doubt. There are a growing number of debt-laden homeowners preferring to save plastic first.
Delusions, survival and credit. People want to keep accessing credit when they cannot stretch it financially instead of cutting down spending drastically or do whatever it takes to find an extra job. Talking of jobs, did you know that in 1972, wages reached their peak. Today, real wages are nearly one-fifth lower - inflation adjusted!
It is going to get worse before it gets better: the latest report by Goldman Sachs makes it crystal clear, the global economy hits a 'crunch'. As if this weren't enough, the IMF spreads gloom on 2008 by confirming that impact would be worse in 2008. The IMF and Sachs were seconded by the US Treasury Secretary acknowledging that we must prepare for a prolonged turmoil. Debt deflation is a nasty beast.
Forget about the Dow 14,000 and ask yourself frankly if you feel today better off than last year, or two years ago. That consumers must now resort to their credit cards to pay their monthly bills while banks are tightening their standards is a bad omen. As to wonder why the heck they have preapproved two trillion in the first place? On one hand they try to appear wary about further credit deterioration, on the other hand they continue their reckless marketing tactics. Their brand new targets are minority homeowners on the brink of foreclosures and college students, which they recruit as credit-card pushers to circumvent the restrictions banning credit card solicitations on campuses. Meanwhile the sin of usury continues to bankroll Congress. the US Senate Panel okayed $850 billion debt increase, ignoring the remark of 'Bubble Man Greenspan' himself, when he said that the demand for U.S. debt may be at 'limit'. Cynicism knows no boundaries: the same man who warned Congress has in fact denied that regulators failed to foresee the problems which caused the global credit crunch. Though this didn't preventing him from applauding the performance of the housing market-bubble! On the top of that, and this is absolutely sickening, 'he' declared early October 07 that the fate of world economy lies with US housing... He should be jailed for the rest of his life. Period.
Just a question before I continue: did you hear about the British the Northern Rock-bank run by any chance? If you did you're lucky because it was not a major issue on any of the channels I am used to watching. Whether we'll be witnessing bank runs in America remains to be seen. As of 9/2/07, in the Financial Times the following headline could be read:
The ongoing credit turmoil has the hallmarks of a bank run
The current turmoil in the financial markets
Sense of growing Crisis over interbanks deals.
Authors Bio: Libertarian Screenwriter, philosopher, owner of moneyfiles.org in support of The Gold Action Anti-Trust Committee (gata.org) and a hard currencies advocate. Currently involved in the promotion of the documentary by Danny Schechter "in Debt We Trust" (www.indebtwetrust.com/media.php). She is currently final polishing a screenplay titled "D.E.B.T" which exposes world economic serfdom. Seeking a producer!