"If the Eurozone breaks up the Western banks will collapse and we will be broke. People will die. This is very serious indeed. If the Eurozone becomes a fiscal union this will not happen."
One of the most respected economists writing on the world situation today, Cynicuseconomicus, says:
"Sitting underneath all of the troubles in the Euro area is the illusion of GDP growth. As long as a country appeared to be experiencing economic growth, it seemed safe to lend to the country. The trouble is that the growth was determined by the debt, not by any real increase in genuine wealth. As borrowed money was circulating around an economy, with the multiplier effect magnifying the impact of the borrowed money, it gave an illusion of real economic growth."
The western countries have been run by truly Machiavellian governments who figured that all they needed to do to stay in power was to pawn every asset in their countries. They reasoned that if there was ever a day of reckoning then it would be the governments who inherited the mess who would receive the ire of the electorate, not them.
The main tools used to put countries into debt were bank deregulation and, in Britain's case, migration. Britain's Gordon Brown led the way with his deregulation in 1997, this gave British banks access to larger funds than their competitors so was rapidly followed by deregulation across the globe, most notably with the 1999 abolition of much of the Glass Steagall Act by the Gramm-Leach-Bliley Act in the USA. In the UK the deregulation of the movement of people was next on the list and the consequent overpopulation drove up the price of housing to unprecedented levels allowing yet more private borrowing. When challenged about these iniquitous changes Gordon Brown countered by accusing those who wanted less debt of being against growth and those who wanted to stop overpopulation of being racist. The science of economics descended to the level of the school playground with the villains who were wrecking the world jumping up and down accusing their opponents of being heartless, racist opponents of public spending on the poor and needy. Every brainless comedian and commentator was recruited to maintain this barrage of insults against those who could see the dangers ahead.
The "illusion of GDP growth" was supplemented by the export of most manufacturing industry to India and China. Environmental and Labour legislation made Western manufacturing hopelessly non-competitive with Asian manufacturing. The totalitarian Chinese could simply order their people to work for nothing and die young and the Indians are castist and dont care. Western governments declared that they were now tackling greenhouse gas emissions and tut-tutted about the naughty Indians and Chinese. The reason they did not put a Social Cost and Climate Levy on imported goods from Asia was that they wanted every day to be Xmas for the electorate with lots of cheap toys from abroad. When confronted with the fact that less able and educated Western youngsters could not get work they just shrugged and stated that "Globalization was inevitable", by which they meant they did not give a damn and were happy to acquire cheap MP3 players even if this did cause factory deaths in China and riots in Croydon.
The GDP Growth in Western countries has also been due to criminal activity in the US where:
"the major banks set up a system for documenting mortgages that was extra-legal, and which undermines the foundation of title on real estate, and was followed by illegal practices to force through foreclosures. In short, the banks may be about to be able to get away with illegal practices for which any ordinary person would be, if you forgive the expression, nailed to the wall."
The credit rating agencies in the US also seem to have been committing fraud, except for their defence that they only offered advice, not ratings that anyone should believe. These semi-fraudulent ratings created hundreds of billions in bad debts.
There can be no doubt that the USA has been the scene of white collar crime on a scale that could not even have been imagined. Crime that involved the government itself so that offences are now being removed from the statute book with the sole intention of letting the criminals go free (false selling, robosigning, dumping of toxic assets etc). This criminal behaviour also affects British banks operating in the US , RBS is facing action over $30.4bn, HSBC over $6.2bn and Barclays in relation to $4.9bn of sales of toxic assets alone.
Measures could have been taken to fix the problems in 2008 onwards. The first measure should have been to regulate the banks again. The governments failed to do this because the bank's casinos were profitable once again. They conveniently forgot that when the banks make a profit their senior staff put it in their pockets and when the banks make a loss the tax payer pays. Now look, without regulation when the Eurozone breaks up our banks will actually collapse and we will be penniless. Yes, totally washed up like Germany in the Great Depression.
Our governments could have stopped migration but despite the promises they have done nothing. They could have introduced sly duties on Asian manufactures to restore our own industry but they have done nothing.
Overall it seems as if the US financial sector was run by a cabal of white collar criminals and the British Labour Government were working on a psychopathic plan to bring down the global capitalist system. No, really, the Yanks let their financial system be run by real criminals and the Labour Government really was full of Marxist extremists operating under cover. Really. No, its too big a truth to comprehend isn't it? Shake your head and carry on, we know the 1970s Trots and Marxists who governed Britain from 1997 were trained to be subversive and we know that bankers conspire together but we couldn't really have let it happen could we, surely the journalists would have spotted it or the opposition parties or someone? Strangely some of them did spot what was going on but no-one listened. Jack Straw even wrote a letter to the paper declaring he was a Stalinist but no-one thought "hang on, Stalin is just behind Hitler in the world league of ultimate villains.... and this guy is Home Secretary!". There is a flaw in democratic systems: if you have 20 able friends who are fanatical about politics and are prepared to be subversive and lie about your true intentions you can capture a political party and rise to govern. This happens routinely nowadays.
The British electorate is the most amazing part of this story. Half the electorate seem to think that Labour was blameless in the world economic crisis. Labour was largely instrumental in the crisis and has left Britain and the world in such a mess that I genuinely fear for recovery.
The worst damage to result from the collapse of world banking is the indebtedness of Southern Europe. If the Eurozone breaks up the Western banks will collapse and we will be broke. People will die. This is very serious indeed. If the Eurozone becomes a fiscal union this will not happen. Instead there will be increasing civil unrest in the Southern part of Europe and countries will secede from the Eurozone over 10-20 years or the EU will become a totalitarian state suppressing the South.
See:
EU Membership and laying up treasure from overseas
One of the most respected economists writing on the world situation today, Cynicuseconomicus, says:
"Sitting underneath all of the troubles in the Euro area is the illusion of GDP growth. As long as a country appeared to be experiencing economic growth, it seemed safe to lend to the country. The trouble is that the growth was determined by the debt, not by any real increase in genuine wealth. As borrowed money was circulating around an economy, with the multiplier effect magnifying the impact of the borrowed money, it gave an illusion of real economic growth."
The western countries have been run by truly Machiavellian governments who figured that all they needed to do to stay in power was to pawn every asset in their countries. They reasoned that if there was ever a day of reckoning then it would be the governments who inherited the mess who would receive the ire of the electorate, not them.
The main tools used to put countries into debt were bank deregulation and, in Britain's case, migration. Britain's Gordon Brown led the way with his deregulation in 1997, this gave British banks access to larger funds than their competitors so was rapidly followed by deregulation across the globe, most notably with the 1999 abolition of much of the Glass Steagall Act by the Gramm-Leach-Bliley Act in the USA. In the UK the deregulation of the movement of people was next on the list and the consequent overpopulation drove up the price of housing to unprecedented levels allowing yet more private borrowing. When challenged about these iniquitous changes Gordon Brown countered by accusing those who wanted less debt of being against growth and those who wanted to stop overpopulation of being racist. The science of economics descended to the level of the school playground with the villains who were wrecking the world jumping up and down accusing their opponents of being heartless, racist opponents of public spending on the poor and needy. Every brainless comedian and commentator was recruited to maintain this barrage of insults against those who could see the dangers ahead.
The "illusion of GDP growth" was supplemented by the export of most manufacturing industry to India and China. Environmental and Labour legislation made Western manufacturing hopelessly non-competitive with Asian manufacturing. The totalitarian Chinese could simply order their people to work for nothing and die young and the Indians are castist and dont care. Western governments declared that they were now tackling greenhouse gas emissions and tut-tutted about the naughty Indians and Chinese. The reason they did not put a Social Cost and Climate Levy on imported goods from Asia was that they wanted every day to be Xmas for the electorate with lots of cheap toys from abroad. When confronted with the fact that less able and educated Western youngsters could not get work they just shrugged and stated that "Globalization was inevitable", by which they meant they did not give a damn and were happy to acquire cheap MP3 players even if this did cause factory deaths in China and riots in Croydon.
The GDP Growth in Western countries has also been due to criminal activity in the US where:
"the major banks set up a system for documenting mortgages that was extra-legal, and which undermines the foundation of title on real estate, and was followed by illegal practices to force through foreclosures. In short, the banks may be about to be able to get away with illegal practices for which any ordinary person would be, if you forgive the expression, nailed to the wall."
The credit rating agencies in the US also seem to have been committing fraud, except for their defence that they only offered advice, not ratings that anyone should believe. These semi-fraudulent ratings created hundreds of billions in bad debts.
There can be no doubt that the USA has been the scene of white collar crime on a scale that could not even have been imagined. Crime that involved the government itself so that offences are now being removed from the statute book with the sole intention of letting the criminals go free (false selling, robosigning, dumping of toxic assets etc). This criminal behaviour also affects British banks operating in the US , RBS is facing action over $30.4bn, HSBC over $6.2bn and Barclays in relation to $4.9bn of sales of toxic assets alone.
Measures could have been taken to fix the problems in 2008 onwards. The first measure should have been to regulate the banks again. The governments failed to do this because the bank's casinos were profitable once again. They conveniently forgot that when the banks make a profit their senior staff put it in their pockets and when the banks make a loss the tax payer pays. Now look, without regulation when the Eurozone breaks up our banks will actually collapse and we will be penniless. Yes, totally washed up like Germany in the Great Depression.
Our governments could have stopped migration but despite the promises they have done nothing. They could have introduced sly duties on Asian manufactures to restore our own industry but they have done nothing.
Overall it seems as if the US financial sector was run by a cabal of white collar criminals and the British Labour Government were working on a psychopathic plan to bring down the global capitalist system. No, really, the Yanks let their financial system be run by real criminals and the Labour Government really was full of Marxist extremists operating under cover. Really. No, its too big a truth to comprehend isn't it? Shake your head and carry on, we know the 1970s Trots and Marxists who governed Britain from 1997 were trained to be subversive and we know that bankers conspire together but we couldn't really have let it happen could we, surely the journalists would have spotted it or the opposition parties or someone? Strangely some of them did spot what was going on but no-one listened. Jack Straw even wrote a letter to the paper declaring he was a Stalinist but no-one thought "hang on, Stalin is just behind Hitler in the world league of ultimate villains.... and this guy is Home Secretary!". There is a flaw in democratic systems: if you have 20 able friends who are fanatical about politics and are prepared to be subversive and lie about your true intentions you can capture a political party and rise to govern. This happens routinely nowadays.
The British electorate is the most amazing part of this story. Half the electorate seem to think that Labour was blameless in the world economic crisis. Labour was largely instrumental in the crisis and has left Britain and the world in such a mess that I genuinely fear for recovery.
The worst damage to result from the collapse of world banking is the indebtedness of Southern Europe. If the Eurozone breaks up the Western banks will collapse and we will be broke. People will die. This is very serious indeed. If the Eurozone becomes a fiscal union this will not happen. Instead there will be increasing civil unrest in the Southern part of Europe and countries will secede from the Eurozone over 10-20 years or the EU will become a totalitarian state suppressing the South.
See:
EU Membership and laying up treasure from overseas
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