Sat05Apr LONDON Global Financial Meltdown conference

[moeen yaseen]

GLOBAL FINANCIAL MELTDOWN , SOCIOECONOMIC INJUSTICE AND WAR: CAUSE AND REMEDY
Saturday April 5th 2008 9-6
http://www.gv2000.com/forums/showthread.php?tid=411&pid=1970#pid1970

Global Vision 2000 will be hosting a special one day conference on, " The Global Financial Meltdown, Socioeconomic Injustice and War: Cause and Remedy " on Saturday 5th April 2008 in London. As an independent international Islamic thinktank it will be building on previous events focussing on these issues. This time it will bring together some of the UK's leading independent political and economic thinkers, writers and campaigners to focus on these issues at a time of crisis and turbulence in the global financial markets and impending recession and ongoing wars raging around the world.

The significance of the event is underlined as it is clear that the credit bubble has combined with the housing bubble and the falling dollar to lead to an unfolding deepening economic crisis centred in the USA but rippling across the world. The speakers will be offering an alternative holistic diagnosis and prescription on what needs to be done urgently to address this crisis. This is desperately needed as vested interests such as mainstream bankers and financial journalists are clearly disguising the nature of the crisis as confidence in the capital markets and banks will result. The connection with socioeconomic injustice will be highlighted with why poverty and underdevelopment persists globally. Also the connection with war will be examined by throwing light on the military industrial complex's relationship with this system.

This event brings together both leading Muslim and Western thinkers and movements seeking monetary and political reform at a time when Western democracies credibility is being questioned post 9/11. The Global War of Terror has given rise to a discourse of a "long war" and the rise of McCarthyism and the surveillance State sold to the public on the rhetoric of counterterrorist policies. It is time to steer the discussion on the real crisis and issues of the age which is the legitimacy and nature of the system we are in living and transacting within.

This special event is guaranteed to enlighten and inspire the people with the knowledge, tools and networks to be the change. A must attend event for the perplexed seeking guidance for themselves, their families , communities and nations. There will be opportunities to interact with the panellists in Q & A sessions.

Highlights and speakers of the event include-

Hosted by Moeen Yaseen Managing Director Global Vision 2000

A special rap artist

A special film on debt and liberation from it will be screened.

IslamicFinance.com Tareq Diwany Islamic finance expert
Author of the Problem with Interest

Christian Council for Monetary Justice/
Global Justice Movement Canon Peter Challen
Co-author of Seven steps to justice

Forum for Stable Currencies Sabine McNeill Monetary reformer

Global Vision 2000 Dr.Muhammad Ahsan
Author of Globalisation or Recolonisation
of the Muslim world

International Islamic reformer Daud Pidcock ex head of Islamic
Party of Great Britain
Author of the forthcoming book on
the Road to Serfdom

HT Britain Sajjad Khan
Editor of New Civilisation


Bandung2 Dr.Mustafa Ali Critical theorist of
Western imperialism and racism


Open Capital Chris Cook former director of the
London International Petroleum Exchange

Peter Forrest Tgl.tv


Movement for the Abolition of War Dr.Tony Kempster


Campaign Against the Arms Trade

At Abrar House
45 Crawford Place, London WIH 4LP
£10 attendance fee
For Further information contact 07818 082011

[moeen yaseen]

http://www.gv2000.com/forums/showthread.php?tid=411&pid=1643#pid1643

[TonyGosling]

JPG Poster for the event



Saying the things the Bilderberger Banking Axis don't want said.

[moeen yaseen]

AUDIOTAPES ON THE TRUTH ON THE FINANCIAL SYSTEM
http://www.bandung2.co.uk/Audio/WOM.htm

These audiotapes are worth listening to in preparation for attending the conference on the bigger picture. Switch off from the mainstream propaganda and Alice in Wonderland. Happy listening.

HOW MONEY IS CREATED
WIZARDS AND WARLORDS
MONETARY TERRORISM
DEMOCRATISING THE MONETARY SYSTEM

[moeen yaseen]

DERIVATIVES THE NEW TICKING BOMB
http://www.marketwatch.com/news/story/derivatives-new-ticking-time-bom b/story.aspx?guid=%7BB9E54A5D-4796-4D0D-AC9E-D9124B59D436%7D&dist=Most ReadHome

Buffett and Gross warn: $516 trillion bubble is a disaster waiting to happen
By Paul B. Farrell, MarketWatch

"Charlie and I believe Berkshire should be a fortress of financial strength" wrote Warren Buffett. That was five years before the subprime-credit meltdown. "We try to be alert to any sort of mega-catastrophe risk, and that posture may make us unduly appreciative about the burgeoning quantities of long-term derivatives contracts and the massive amount of uncollateralized receivables that are growing alongside. In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."


That warning was in Buffett's 2002 letter to Berkshire shareholders. He saw a future that many others chose to ignore. The Iraq war build-up was at a fever-pitch. The imagery of WMDs and a mushroom cloud fresh in his mind. Also fresh on Buffett's mind: His acquisition of General Re four years earlier, about the time the Long-Term Capital Management hedge fund almost killed the global monetary system. How? This is crucial: LTCM nearly killed the system with a relatively small $5 billion trading loss. Peanuts compared with the hundreds of billions of dollars of subprime-credit write-offs now making Wall Street's big shots look like amateurs.
Buffett tried to sell off Gen Re's derivatives group. No buyers. Unwinding it was costly, but led to his warning that derivatives are a "financial weapon of mass destruction." That was 2002.
Derivatives bubble explodes five times bigger in five years
Wall Street didn't listen to Buffett. Derivatives grew into a massive bubble, from about $100 trillion to $516 trillion by 2007.

The new derivatives bubble was fueled by five key economic and political trends:

Sarbanes-Oxley increased corporate disclosures and government oversight

Federal Reserve's cheap money policies created the subprime-housing boom

War budgets burdened the U.S. Treasury and future entitlements programs

Trade deficits with China and others destroyed the value of the U.S. dollar
Oil and commodity rich nations demanding equity payments rather than debt

In short, despite Buffett's clear warnings, a massive new derivatives bubble is driving the domestic and global economies, a bubble that continues growing today parallel with the subprime-credit meltdown triggering a bear-recession.

Data on the five-fold growth of derivatives to $516 trillion in five years comes from the most recent survey by the Bank of International Settlements, the world's clearinghouse for central banks in Basel, Switzerland. The BIS is like the cashier's window at a racetrack or casino, where you'd place a bet or cash in chips, except on a massive scale: BIS is where the U.S. settles trade imbalances with Saudi Arabia for all that oil we guzzle and gives China IOUs for the tainted drugs and lead-based toys we buy.

To grasp how significant this five-fold bubble increase is, let's put that $516 trillion in the context of some other domestic and international monetary data:

U.S. annual gross domestic product is about $15 trillion
U.S. money supply is also about $15 trillion
Current proposed U.S. federal budget is $3 trillion
U.S. government's maximum legal debt is $9 trillion
U.S. mutual fund companies manage about $12 trillion
World's GDPs for all nations is approximately $50 trillion
Unfunded Social Security and Medicare benefits $50 trillion to $65 trillion
Total value of the world's real estate is estimated at about $75 trillion
Total value of world's stock and bond markets is more than $100 trillion
BIS valuation of world's derivatives back in 2002 was about $100 trillion
BIS 2007 valuation of the world's derivatives is now a whopping $516 trillion

Moreover, the folks at BIS tell me their estimate of $516 trillion only includes "transactions in which a major private dealer (bank) is involved on at least one side of the transaction," but doesn't include private deals between two "non-reporting entities." They did, however, add that their reporting central banks estimate that the coverage of the survey is around 95% on average.

Also, keep in mind that while the $516 trillion "notional" value (maximum in case of a meltdown) of the deals is a good measure of the market's size, the 2007 BIS study notes that the $11 trillion "gross market values provides a more accurate measure of the scale of financial risk transfer taking place in derivatives markets."
Bubbles, domino effects and the 'bad 2%'
However, while that may be true as far as the parties to an individual deal, there are broader risks to the world's economies. Remember back in 1998 when LTCM's little $5 billion loss nearly brought down the world's banking system. That "domino effect" is now repeating many times over, straining the world's monetary, economic and political system as the subprime housing mess metastasizes, taking the U.S. stock market and the world economy down with it.

This cascading "domino effect" was brilliantly described in "The $300 Trillion Time Bomb: If Buffett can't figure out derivatives, can anybody?" published early last year in Portfolio magazine, a couple months before the subprime meltdown. Columnist Jesse Eisinger's $300 trillion figure came from an earlier study of the derivatives market as it was growing from $100 trillion to $516 trillion over five years. Eisinger concluded:
"There's nothing intrinsically scary about derivatives, except when the bad 2% blow up." Unfortunately, that "bad 2%" did blow up a few months afterwards, even as Bernanke and Paulson were assuring America that the subprime mess was "contained."
Bottom line: Little things leverage a heck of a big wallop. It only takes a little spark from a "bad 2% deal" to ignite this $516 trillion weapon of mass destruction. Think of this entire unregulated derivatives market like an unsecured, unpredictable nuclear bomb in a Pakistan stockpile. It's only a matter of time.

World's newest and biggest 'black market'
The fact is, derivatives have become the world's biggest "black market," exceeding the illicit traffic in stuff like arms, drugs, alcohol, gambling, cigarettes, stolen art and pirated movies. Why? Because like all black markets, derivatives are a perfect way of getting rich while avoiding taxes and government regulations. And in today's slowdown, plus a volatile global market, Wall Street knows derivatives remain a lucrative business.
Recently Pimco's bond fund king Bill Gross said "What we are witnessing is essentially the breakdown of our modern-day banking system, a complex of leveraged lending so hard to understand that Federal Reserve Chairman Ben Bernanke required a face-to-face refresher course from hedge fund managers in mid-August." In short, not only Warren Buffett, but Bond King Bill Gross, our Fed Chairman Ben Bernanke, the Treasury Secretary Henry Paulson and the rest of America's leaders can't "figure out" the world's $516 trillion derivatives.
Why? Gross says we are creating a new "shadow banking system." Derivatives are now not just risk management tools. As Gross and others see it, the real problem is that derivatives are now a new way of creating money outside the normal central bank liquidity rules. How? Because they're private contracts between two companies or institutions.
BIS is primarily a records-keeper, a toothless tiger that merely collects data giving a legitimacy and false sense of security to this chaotic "shadow banking system" that has become the world's biggest "black market."
That's crucial, folks. Why? Because central banks require reserves like stock brokers require margins, something backing up the transaction. Derivatives don't. They're not "real money." They're paper promises closer to "Monopoly" money than real U.S. dollars.
And it takes place outside normal business channels, out there in the "free market." That's the wonderful world of derivatives, and it's creating a massive bubble that could soon implode.
Comments? Yes, we want to hear your thoughts. Tell us what you think about derivatives: as "financial weapons of mass destruction;" as a "shadow banking system;" as a "black market;" as the next big bubble dangerously exposing us to that unpredictable "bad 2%."

[moeen yaseen]

RON PAUL WARNS OF WORLDWIDE ECONOMIC COLLAPSE
http://www.prisonplanet.com/articles/march2008/140308Paul.htm


Congressman Ron Paul (R-Texas) Warns of Worldwide Economic Collapse.

The following video is from C-SPAN’s Congress Coverage, broadcast on March 12, 2008

[blackcat]

http://www.guardian.co.uk/business/2008/mar/14/creditcrunch.useconomy2

[moeen yaseen]

A VICIOUS CIRCLE ENDING IN A SYSTEMIC FINANCIAL MELTDOWN
Mike Whitney
http://www.informationclearinghouse.info/article19531.htm


"It's another round of the credit crisis. Some markets are getting worse than January this time. There is fear that something dramatic will happen and that fear is feeding itself," Jesper Fischer-Nielsen, interest rate strategist at Danske Bank, Copenhagen; Reuters

Yesterday's action by the Federal Reserve proves that the banking system is insolvent and the US economy is at the brink of collapse. It also shows that the Fed is willing to intervene directly in the stock market if it keeps equities propped up. This is clearly a violation of its mandate and runs contrary to the basic tenets of a free market. Investors who shorted the market yesterday, got clobbered by the not so invisible hand of the Fed chief.

In his prepared statement, Bernanke announced that the Fed would add $200 billion to the financial system to shore up banks that have been battered by mortgage-related losses. The news was greeted with jubilation on Wall Street where traders sent stocks skyrocketing by 416 points, their biggest one-day gain in five years.

“It's like they're putting jumper cables onto a battery to kick-start the credit market,'' said Nick Raich, a manager at National City Private Client Group in Cleveland. ``They're doing their best to try to restore confidence.''

“Confidence”? Is that what it's called when the system is bailed out by Sugar-daddy Bernanke?

To understand the real meaning behind the Fed's action; it's worth considering some of the stories which popped up in the business news just days earlier. For example, last Friday, the International Herald Tribune reported:

“Tight money markets, tumbling stocks and the dollar are expected to heighten worries for investors this week as pressure mounts on central banks facing what looks like the “third wave” of a global credit crisis....Money markets tightened to levels not seen since December, when year-end funding problems pushed lending costs higher across the board.”

The Herald Tribune said that troubles in the credit markets had pushed the stock market down more than 3 percent in a week and that the same conditions which preceded the last two crises (in August and December) were back stronger than ever. In other words, liquidity was vanishing from the system and the market was headed for a crash.

A report in Reuters reiterated the same ominous prediction of a “third wave” saying:

“The two-year U.S. Treasury yields hit a 4-year low below 1.5 percent as investors flocked to safe-haven government bonds....The cost of corporate bond insurance hit record highs on Friday and parts of the debt market which had previously escaped the turmoil are also getting hit.”

Risk premiums were soaring and investors were fleeing stocks and bonds for the safety of government Treasuries; another sure sign that liquidity was disappearing.

Reuters: "The level of financial stress is ... likely to continue to fuel speculation of more immediate central bank action either in the form of increased liquidity injections or an early rate cut," Goldman Sachs said in a note to clients.”

Indeed. When there's a funding-freeze by lenders, investors hit the exits as fast as their feet will carry them. That's why the lights started blinking red at the Federal Reserve and Bernanke concocted a plan to add $200 billion to the listing banking system.

New York Times columnist Paul Krugman also referred to a “third wave” in his article “The Face-Slap Theory”. According to Krugman, “The Fed has been cutting the interest rate it controls - the so-called Fed funds rate – (but) the rates that matter most directly to the economy, including rates on mortgages and corporate bonds, have been rising. And that's sure to worsen the economic downturn.”...(Now) “the banks and other market players who took on too much risk are all trying to get out of unsafe investments at the same time, causing significant collateral damage to market functioning.” What the Times' columnist is describing is a run on the financial system and the onset of “a full-fledged financial panic.”

The point is, Bernanke's latest scheme is not a remedy for the trillion dollar unwinding of bad bets. It is merely a quick-fix to avoid a bloody stock market crash brought on by prevailing conditions in the credit markets.

Bernanke coordinated the action with the other members of the global banking cartel---The Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank---and cobbled together the new Term Securities Lending Facility (TSLF), which “will lend up to $200 billion of Treasury securities to primary dealers secured for a term of 28 days (rather than overnight, as in the existing program) by a pledge of other securities, including federal agency debt, federal agency residential-mortgage-backed securities (MBS), and non-agency AAA/Aaa-rated private-label residential MBS. The TSLF is intended to promote liquidity in the financing markets for Treasury and other collateral and thus to foster the functioning of financial markets more generally.” (Fed statement)

The plan, of course, is wildly inflationary and will put additional downward pressure on the anemic dollar. No matter. All of the Fed's tools are implicitly inflationary anyway, but they'll all be put to use before the current crisis is over.

The Fed's statement continues: “The Federal Open Market Committee has authorized increases in its existing temporary reciprocal currency arrangements (swap lines) with the European Central Bank (ECB) and the Swiss National Bank (SNB). These arrangements will now provide dollars in amounts of up to $30 billion and $6 billion to the ECB and the SNB, respectively, representing increases of $10 billion and $2 billion. The FOMC extended the term of these swap lines through September 30, 2008.”

So, why is the Fed issuing loans to foreign banks? Isn't that a tacit admission of its guilt in the trillion dollar subprime swindle? Or is it simply a way of warding off litigation from angry foreign investors who know they were cheated with worthless toxic bonds? In any event, the Fed's largess proves that the G-10 operates as de facto cartel determining monetary policy for much of the world. (The G-10 represents roughly 85% of global GDP)

As for Bernanke's Term Securities Lending Facility (TSLF) it is intentionally designed to circumvent the Fed's mandate to only take top-grade collateral in exchange for loans. No one believes that these triple A mortgage-backed securities are worth more than $.70 on the dollar. In fact, according to a report in Bloomberg News yesterday: “AAA debt fell as low as 61 cents on the dollar after record home foreclosures and a decline to AA may push the value of the debt to 26 cents, according to Credit Suisse Group.

``The fact that they've kept those ratings where they are is laughable,'' said Kyle Bass, chief executive officer of Hayman Capital Partners, a Dallas-based hedge fund that made $500 million last year betting lower-rated subprime-mortgage bonds would decline in value. ``Downgrades of AAA and AA bonds are imminent, and they're going to be significant.'' Bass estimates most of AAA subprime bonds in the ABX indexes will be cut by an average of six or seven levels within six weeks.” (Bloomberg News) The Fed is accepting these garbage bonds at nearly full-value. Another gift from Santa Bernanke.

Additionally, the Fed is offering 28 day repos which --if this auction works like the Fed's other facility, the TAF---the loans can be rolled over free of charge for another 28 days. Yippee. The Fed found a way to recapitalize the banks with permanent rotating loans and the public is none the wiser. The capital-starved banksters at Citi and Merrill must feel like they just won the lottery. Unfortunately, Bernanke's move effectively nationalizes the banks and makes them entirely dependent on the Fed's fickle generosity.

The New York Times Floyd Norris sums up Bernanke's efforts like this:

“The Fed’s moves today and last Friday are a direct effort to counter a loss of liquidity in mortgage-backed securities, including those backed by Fannie Mae and Freddie Mac. Given the implied government guarantee of Freddie and Fannie, rising yields in their paper served as a warning sign that the crunch was worsening and investor confidence was waning. On Oct. 30, the day before the Fed cut the Fed funds rate from 4.75 percent to 4.5 percent, the yield on Fannie Mae securities was 5.75 percent. Today the Fed Funds rate is 3 percent, and the Fannie Mae rate is 5.71 percent, virtually the same as in October.....A sign of the Fed’s success, or lack of same, will be visible in that rate. It needs to come down sharply, in line with Treasury bond rates. Today, the rate was up for most of the day, but it did fall back at the end of the day. Watch that rate for the rest of the week to see indications of whether the Fed’s move is really working to restore confidence.”

Norris is right; it all depends on whether rates go down and whether that will rev-up the moribund housing market again. Of course, that is predicated on the false assumption that consumers are too stupid to know that housing is in its biggest decline since the Great Depression. This is just another slight miscalculation by the blinkered Fed. Housing will not be resuscitated anytime in the near future, no matter what the conditions; and you can bet on that. The last time Bernanke cut interest rates by 75 basis points mortgage rates on the 30-year fixed actually went up a full percentage point. This had a negative affect on refinancing as well as new home purchases. The cuts were a total bust in terms of home sales.

Still, equities traders love Bernanke's antics and, for the next 24 hours or so, he'll be praised for acting decisively. But as more people reflect on this latest manuver, they'll see it for what it really is; a sign of panic. Even more worrisome is the fact that Bernanke is quickly using every arrow in his quiver. Despite the mistaken belief that the Fed can print money whenever it chooses; there are balance sheets constraints; the Fed's largess is finite. According to MarketWatch:

"Counting the currency swaps with the foreign central banks, the Fed has now committed more than half of its combined securities and loan portfolio of $832 billion, Lou Crandall, chief economist for Wrightson ICAP noted. 'The Fed won't have run completely out of ammunition after these operations, but it is reaching deeper into its balance sheet than before."


Steve Waldman at interfluidity draws the same conclusion in his latest post:

“After the FAF expansion, repo program, and TSLF, the Fed will have between $300B and $400B in remaining sterilization capacity, unless it issues bonds directly.” (Calculated Risk)
So, Bernanke is running short of ammo and the housing bust has just begun. That's bad. As the wave of foreclosures, credit card defaults and commercial real estate bankruptcies continue to mount; Bernanke's bag o' tricks will be near empty having frittered most of his capital away on his Beluga-munching buddies at the investment banks.
But that's only half the story. Bernanke and Co. are already working on a new list of hyper-inflationary remedies once the credit troubles pop up again. According to the Wall Street Journal, the Fed has other economy-busting scams up its sleeve:
“With worsening strains in credit market threatening to deepen and prolong an incipient recession, analysts are speculating that the Federal Reserve may be forced to consider more innovative responses -– perhaps buying mortgage-backed securities directly.

“As credit stresses intensify, the possibility of unconventional policy options by the Fed has gained considerable interest, said Michael Feroli of J.P. Morgan Chase. He said two options are garnering particular attention on Wall Street: Direct Fed lending to financial institutions other than banks and direct Fed purchases of debt of Fannie Mae and Freddie Mac or mortgage-backed securities guaranteed by the two shareholder-owned, government-sponsored mortgage companies. ( “Rate Cuts may not be Enough”, David Wessel, Wall Street Journal)

Wonderful. So now the Fed is planning to expand its mandate and bail out investment banks, hedge funds, brokerage houses and probably every other brandy-swilling Harvard grad who got caught-short in the subprime mousetrap. Ain't the “free market” great?

But none of Bernanke's bailout schemes will succeed. In fact, all he's doing is destroying the currency by trying to reflate the equity bubble. And how much damage is he inflicting on the dollar? According to Bloomberg, “the risk of losses on US Treasury notes exceeded German bunds for the first time ever amid investor concern the subprime mortgage crisis is sapping government reserves....Support for troubled financial institutions in the U.S. will be perceived as a weakening of U.S. sovereign credit.''

America is going broke and the rest of the world knows it. Bernanke is just speeding the country along the ever-steepening downward trajectory.

Timothy Geithner, President of the New York Fed put it like this:

“The self-reinforcing dynamic within financial markets has intensified the downside risks to growth for an economy that is already confronting a very substantial adjustment in housing and the possibility of a significant rise in household savings. The intensity of the crisis is in part a function of the size of the preceding financial boom, but also of the speed of the deterioration in confidence about the prospects for growth and in some of the basic features of our financial markets. The damage to confidence—confidence in ratings, in valuation tools, in the capacity of investors to evaluate risk—will prolong the process of adjustment in markets. This process carries with it risks to the broader economy.”

Without a hint of irony, Geithner talks about the importance of building confidence on a day when the Fed has deliberately distorted the market by injecting $200 billion in the banking system and sending the flagging stock market into a steroid-induced rapture. Astonishing.

The stock market was headed for a crash this week, but Bernanke managed to swerve off the road and avoid a head-on collision. But nothing has changed. Foreclosures are still soaring, the credit markets are still frozen, and capital is being destroyed at a faster pace than any time in history. The economic situation continues to deteriorate and even unrelated parts of the markets have now been infected with subprime contagion. The massive deleveraging of the banks and hedge funds is beginning to intensify and will continue to accelerate until a bottom is found. That's a long way off and the road ahead is full of potholes.

"In the United States, a new tipping point will translate into a collapse of the real economy, final socio-economic stage of the serial bursting of the housing and financial bubbles and of the pursuance of the US dollar fall. The collapse of US real economy means the virtual freeze of the American economic machinery: private and public bankruptcies in large numbers, companies and public services closing down massively.” (Statement from The Global Europe Anticipation Bulletin (GEAB)

Is that too gloomy? Then take a look at these eye-popping charts which show the extent of the Fed's lending operations via the Temporary Auction Facility. The loans have helped to make the insolvent banks look healthy, but at great cost to the country's economic welfare. http://benbittrolff.blogspot.com/2008/03/really-scary-fed-charts-march .html

The Fed established the TAF in the first place; to put a floor under mortgage-backed securities and other subprime junk so the banks wouldn't have to try to sell them into an illiquid market at fire-sale prices. But the plan has backfired and now the Fed feels compelled to contribute $200 billion to a losing cause. It's a waste of time.

UBS puts the banks total losses from the subprime fiasco at $600 billion. If that's true, (and we expect it is) then the Fed is out of luck because, at some point, Bernanke will have to throw in the towel and let some of the bigger banks fail. And when that happens, the stock market will start lurching downward in 400 and 500 point increments. But what else can be done? Solvency can only be feigned for so long. Eventually, losses have to be accounted for and businesses have to fail. It's that simple.


So far, the Fed's actions have had only a marginal affect. The system is grinding to a standstill. The country's two largest GSEs, Fannie Mae and Freddie Mac, which are presently carrying $4.5 trillion of loans on their books, are teetering towards bankruptcy. Both are gravely under-capitalized and (as a recent article in Barron's shows) Fannies equity is mostly smoke and mirrors. No wonder investors are shunning their bonds. Additionally, the cost of corporate bond insurance is now higher than anytime in history, which makes funding for business expansion or new projects nearly impossible. The wheels have come of the cart. The debt markets are upside-down, consumer confidence is drooping and, as the Financial Times states, “A palpable sense of crisis pervades global trading floors.” It's all pretty grim.

The banks are facing a “systemic margin call” which is leaving them capital-depleted and unwilling to lend. Thus, the credit markets are shutting down and there's a stampede for the exits by the big players. Bernanke's chances of reversing the trend are nil. The cash-strapped banks are calling in loans from the hedge funds which is causing massive deleveraging. That, in turn, is triggering a disorderly unwind of trillions of dollars of credit default swaps and other leveraged bets. Its a disaster. Economist Nouriel Roubini predicted the whole sequence of events six months before the credit markets seized and the Great Unwind began”. Here's a sampling of his recent testimony before Congress:


Roubini's Testimony before Congress:

“There is now a rising probability of a "catastrophic" financial and economic outcome; a vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe. The Fed is seriously worried about this vicious circle and about the risks of a systemic financial meltdown....Capital reduction, credit contraction, forced liquidation and fire sales of assets at below fundamental prices will ensue leading to a cascading and mounting cycle of losses and further credit contraction. In illiquid market actual market prices are now even lower than the lower fundamental value that they now have given the credit problems in the economy. Market prices include a large illiquidity discount on top of the discount due to the credit and fundamental problems of the underlying assets that are backing the distressed financial assets. Capital losses will lead to margin calls and further reduction of risk taking by a variety of financial institutions that are now forced to mark to market their positions. Such a forced fire sale of assets in illiquid markets will lead to further losses that will further contract credit and trigger further margin calls and disintermediation of credit.

To understand the risks that the financial system is facing today I present the "nightmare" or "catastrophic" scenario that the Fed and financial officials around the world are now worried about. Such a scenario – however extreme – has a rising and significant probability of occurring. Thus, it does not describe a very low probability event but rather an outcome that is quite possible.”

Roubini has been right from the very beginning, and he is right again now. Bernanke can place himself at the water's edge and lift his hands in defiance, but the tide will come in and wash him out to sea anyway. The market is correcting and nothing is going to stop it.

[conspiracy analyst]

Special alert – critical week ahead

“With rumors about Lehman, UBS, Ford, WaMu and others swirling, if global central banks and governments do not act before Europe opens, there could be something historic on Monday. The US Contagion is now directly threatening all countries with a global meltdown.

“Sunday night is critical. Asia doesn’t matter. But Europe cannot be allowed to tumble.

“Everyone is talking dollar intervention. But there is no one home at the BoJ due to political hankering over the post. I think that the only way to have a significant intervention is to have the ECB, BoE, Bank of Canada and Australia Reserve Bank cut rates sharply.

“In fact, I’d have Volcker make the call and say he is running the deal and it will be similar to the Hunt bailout in 1980. After a couple quarters, you can hike rates if you like.

“There should be other interventionist action and lending facilities proffered. But the global markets need the shock & awe of global coordinated rate cuts of significant magnitude.

“We must reiterate, the only thing preventing a public panic, because they don’t understand the magnitude of credit market problems, is that the stock market is not crashing. And solons know this.

“Hopefully this will buy time.”

Source: Bill King, The King Report, March 14, 2008.

[TonyGosling]

Just about the same time as this NATO summit
2nd - 4th April in Bucharest

Yours is, I think, a more positive agenda.

http://www.summitbucharest.ro/?limba=en&pag=1
Summit

The North – Atlantic Alliance Summit is the most important political event of the year, which will draw the attention of the entire world upon Romania. Moreover, it is the most important event ever to be organized in Romania. Approximately 3,000 delegates – the most powerful people on earth, Heads of State and Government and ministers – shall analyse a very busy political agenda, during a 3 –day marathon discussion. In this section, you will have full access to the official documents of the Summit and to the speeches during the reunion. The place to host the Summit, the Palace of the Parliament, was selected by the organizers in order to ensure the best conditions for the reunion. Other events of public diplomacy will take place around the Summit period...........

[moeen yaseen]

I think you are spot on Tony the forthcoming April 5th conference in London maybe more significant than the NATO one you refer. People on this forum need to be RE-EDUCATED and MOBILISED NOW as opposed to being armchair observers and critics. People need to move on from being observers and students of 9/11 to the bigger picture. Because the financial meltdown has arrived here and the financial tsunami is on our doorsteps. This nation's and I mean the UK not just the USA has a day of reckoning coming- people and Government have been living on borrowed money and borrowed time and are in the tentacles of a financial and economic trap. This warmongering nation and it's sponging off the rest of the world model is doomed. Who is really causing inflation, rising unemployment, low wages, homelessness, foreclosures ,uncontrolled immigration and an Orwellian police State? If these issues mean nothing to readers here you should close down this website NOW. People need to connect the dots from 9/11 to the current Financial Meltdown. For the people if they are glued to bread and circuses like in Roman times ie. being wage slaves and glued to sport and hedonism they deserve what is coming. People here should be coming to listen and learn from leading independent monetary/political reformers at this event which is geared to AWAKEN the people.


FINANCIAL CRISIS- BEAR STEARNS- BERNANKE- KERVIEL -GAMBLERS FOLLY?
Thursday, 20 March 2008
http://www.hizb.org.uk/hizb/resources/issues-explained/financial-crisi s-bear-stearns-bernanke-kerviel-gamblers-folly.html


The past few weeks have seen extreme drops in world stock markets, emergency action by central banks to prop up investor confidence, and over the past weekend the virtual collapse of Bear Stearns (the 5th largest US Investment bank). The US Federal Reserve took the unprecedented decision to lower US interest rates by .75% for the second time since January in addition to an emergency cut over the weekend of .25% in order to try and loosen up the deepening gloom of the credit crunch. FX rates continued to gyrate wildly led by the drop in the US dollar as the "carry trade" speculating on higher yielding currencies unwound, the fall out from the sub-prime debacle continued with the government announcing that the UK taxpayer could be liable for up to £55 billion (£2,000 per taxpayer) in guarantees the government has made to shore up Northern Rock. In January Societe Generale, France's second largest bank, announced Euro 5 billion in losses associated with a rogue trader (Jerome Kerviel) incident. One would be forgiven for questioning the current stability of global capital markets, and for good reason.

There are three main flaws in the capitalist liberal market system which have all contributed to the crisis in markets. Fiat currencies, Credit creation and the growth of Derivatives markets. Rather than pointing fingers at those who administered or watched over the latest crisis - Brown/Darling, Bernanke and Kerviel, root and branch reform of the markets would be required to re-establish confidence in a rapidly deteriorating situation.

Fiat Currencies

Ever since Nixon took the US off the gold standard in 1971 when the dollar was freely exchangeable for gold at the fixed rate of $35 per ounce the dollar and the other freely floating (not exchangeable for any tangible asset) currencies of the world, indeed all of them have consistently and rapidly depreciated versus Gold which has intrinsic value when compared to other tangible commodities. Perhaps the best example of the depreciation of fiat currencies is the fact that it now takes over $950 US to buy one ounce of gold, compared to $35 in 1971 when it became free floating. That all governments are using fiat currencies only heightens the problem.

With fiat currencies, control over the printing and circulation of the currency falls to central and main clearing banks. Whilst some countries have been more austere in controlling the creation of money (post war Germany prior to European monetary union maintained strict money supply/inflation limits) others led by the US have opened the floodgates. With US and UK money supply numbers increasing by 8 to 12% yearly, and little sign of it lessening, the impact on inflation is tangible. With the Federal Reserve now making available a $200 billion facility to banks in crisis similar to Bear Stearns, the inflationary pressure and standing of the US dollar declines further. An emergency offer of 5 billion pounds to UK banks was eagerly oversubscribed this week 5 times over. That Bear Stearns was declared technically bankrupt and sold to JP Morgan for a nominal amount together with Federal Reserve guarantees of over $30 billion, only further highlighted the air of despondency and gloom.

Credit Creation and the Credit Crunch

But central governments are not the only institutions creating money out of thin air. The fragility of the financial markets is systematic, since it occurs when firms take on more and more risky ventures; and no amount of regulation can stop that fragility. This is why markets crash regularly, and every boom is followed by a crash or a downturn.

Greed is enshrined within the system. Greed is the motivation that led to predatory mortgage brokers selling mortgages to people that have no way in paying it back, and then increasing the rates of interest until the buyer defaults. Greed is also the motivation that led the credit ratings agencies to rate the investments as much less risky than they were, and also to conceal that the risk was based on prime mortgage debt. Hedge funds demonstrate greed in the way they seek to provide astonishing returns to the customers, and greed is the motivation even for individual shareholders that want to capitalise on the falling share prices across the economy, even though it can lead to problems for thousands of people.

The effect of this is devastating; since each element within the system puts their benefit before ethics, morals and the impact on the wider economy, this is why we have a situation where even though the effect of investment decisions can lead to a downturn in the economy, companies are prepared to make those decisions anyway. The biggest problem here is that this motivation is seen as a virtue. Greed is good; so we are told, and hence we can see that this is a systematic problem; i.e. it is enshrined in the financial system.

Bear Stearns fell due to massive holdings of credit derivatives, particularly collateralised debt obligations - highly leveraged loan structures. With the real estate bubble bursting this market has dramatically fallen away, and those companies most highly leveraged are now paying the price. But the price is also being paid by taxpayers and the common man in the street who shares in the government bailouts which the central banks are so happy to put up - everyone suffers as the currency is diluted by these bailouts, and taxpayers ultimately must balance the budget, if not with this government then in the time of future generations.

The Growth of Derivatives

The world economy equates to $50 trillion of gross domestic product, whereas derivatives, generally created from within the banking system, now is over $500 trillion. Financing exceeds economic output by at least a factor of 10 - and for what purpose?

The financial system serves an economic function of its own: Additional finance is needed to grow the real economy (loans, investment in business or foreign exchange). But credit has expanded far faster than production. This has impaired the ability of those living in the real economy to service debt. The banks produced trillions of dollars of derivative instruments and sold them to hedge funds. Hedge funds produced more and sold them back to banks. Generally little capital backed these promises. So when it fails it fails spectacularly.

George Soros once appeared before the House Banking Committee and stated: "There are so many (derivatives), and some of them are so esoteric that the risks involved may not be properly understood even by the most sophisticated of investors, and I'm supposed to be one of them." After Congress completed its study, then Federal Reserve chairman Alan Greenspan dismissed it as unnecessary. He described the risk of derivatives as "negligible." Congress chose to believe the testimony of Greenspan and ignore Soros.

In May of 2003 Greenspan said: "Derivatives have permitted financial risks to be unbundled in ways that have facilitated both their measurement and their management... As a result, not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient."

The writer Henry Kaufman viewed the development differently: "Institutions with aggressive (derivative) models will get the business and garner the profits. Senior managers will find it more difficult to resist increasing pressures to compete using riskier models, especially if doing so would cause the earnings and stock process to lag behind those of institutions deploying riskier models. Ongoing financial intermediation and balance sheet leveraging also will continue to support riskier modeling on the near horizon."

One should not be surprised that Jerome Kerviel of Societe Generale "bet the firm" on the direction of the stock market to the tune of several billion Euros earlier this year, he was merely attempting to maximise profits and hence his bonus. If everyone else is doing it the pressure is on - merely to keep up. In March of last year, before the current round of crises, Kaufman viewed the preferable solution as impractical.

"One [solution] is to let competitive forces discipline market participants," Kaufman said. "In this scenario, the managers who perform well will prosper, while those who do not will fail. [But] the failure of behemoth financial conglomerates not only exacts enormous social costs, but also poses systemic risks for markets around the world."

But the market is trembling and to shore up any remaining confidence has required massive intervention.

Conclusion

An independent thinker would be entitled to ask where is the free market? Surely, if banks are going to involve themselves in such risky instruments they should carry the consequences.

The argument the custodians of the system bring is that "certain" banks are too big to fail, the risk of systemic counterparty meltdown is just too great, hence the need for bailouts. Yet, the public is not party to the approval of bailing out these large "gambling" houses and is funding them during tough times, yet does not benefit from the massive bonuses paid in the good years.

As long as the laws are so lax to allow unrestrained credit creation, derivatives which are not based in the real economy, and fiat currencies, we will all suffer from these contradictory policies (all matters forbidden in Islam). The so called "free market" is not looking so free anymore.

[moeen yaseen]

THE CURRENT DEPRESSION OUR WAKE UP CALL
http://www.new-enlightenment.com/2008_depression.htm



Out-of-control predatory capitalists have perpetrated a worldwide economic depression. Capitalism's degenerate character is now extraordinarily visible during this time of multiple crises.

This exposure of capitalism's depravity must awaken us to the necessity of instituting a commonwealth in place of this cannibalistic monstrosity.

We cannot allow economic tyranny to continue to destroy us. We must have a government and an economy of and for the people.






The 1929 world depression and the current one which became unavoidably evident in 2007 have exactly the same cause: the systemic corruption and excess of vulture capitalism. This depression is the inevitable outcome of capitalism's perverse practices and dogmas.
The demonic cabal that controls the U.S. is attempting to brainwash Americans into believing that we're merely experiencing a mild, temporary recession, and that the whole thing can be easily remedied by the current stimulus package that provides tax rebates to citizens and businesses.
Depression: in economics, a period of economic crisis in commerce, finance, and industry, characterized by falling prices, restriction of credit, low output and investment, numerous bankruptcies, and a high level of unemployment.
A less severe crisis is usually known as a recession, a more common occurrence generally thought to be a normal part of the business cycle; it is technically defined as two consecutive quarterly declines in the gross national product.





Anyone who tells you that we're merely in a mild, accidental recession is attempting to befuddle and manipulate you for their own purposes.
The current depression is a wake-up call: we must recognize that vulture capitalism is totally out of control and destroying workers worldwide.

Once people in all countries awaken to this intolerable economic devastation, we can begin to take back our nations and institute commonwealths for the good of all humankind.




Americans should already have been shaken awake by the large number of murderous acts perpetrated by the demonic cabal and the Bush junta who seized control of America in the 2000 coup d'etat. A partial listing of these outrages would include:

Slaughtering American military personnel and "enemy" civilians in Afghanistan and Iraq

Cannibalizing American workers through stock market and real estate swindles

Turning America into a police state

Plundering other nations through world economic conquest



“The illegal we do immediately.
The unconstitutional takes a little longer.”

Henry Kissinger, Cabal Hit Man

American workers need to wake up to the fact that unemployment, shrinking income, home foreclosure and eviction, and lack of medical care that they're experiencing are not "natural" phenomena. These are not inevitable, unavoidable aspects of a sane political-economic system. Americans must realize that the current economic depression has been caused by the vulture capitalists who've seized control of our nation and with callous disregard watch as average citizens are ground into the dust.


(Click on specific areas of the image below to access additional information)



The current world depression is more visible than usual because we're seeing not only the annihilation of workers--the usual victims of vulture capitalism--but also elements within the capitalist system itself being devastated: banks, businesses, and financial institutions.


Capitalist Fratricidal War
"The drive to accumulate dramatically pits capitalist against capitalist, capitalist against worker, worker against worker. Accumulation thereby fuels competition . . . So, as capitalists strive to accumulate, as their actions become mere functions of capital, they inevitably clash with other capitalists hoping to do likewise. What erupts is a fratricidal war. Soon different 'fractions' of capital jostle with their respective corporate or sectoral peers in a treacherous zero-sum accumulation mania. Accumulation is the centrifugal force of 'capital in general.' But the positionality of each individual capitalist within this process, like that of the working class's, varies and changes over time, subject to the pace and trajectory of competition. Competition hastens a splintering of capital, as it does for labor, compounding it into many aliquot parts." 1


The current depression is caused not by new-sprung and unusual features of predatory capitalism, but by the hyperbolic overindulgence in criminal behavior and the debauchery of maniacal greed which are the very essence of this looting malignancy. Both depraved indifference and corruption are distinguishing characteristics of crony capitalism--as is evidenced by the presence of these activities from the beginning of its history.


"Given the inherent tendencies of capitalist production, credit has also been a tremendous accelerator of overproduction, of overvaluing the capacity of the market to absorb products and has thus been a catalyst of speculative bubbles with the consequent crises and drying up of credit. Side by side with facilitating these social catastrophes the stock markets and the banking system have encouraged all the individual vices of greed and duplicity that are typical of an exploiting class living off the labour of others; vices that we see flourishing today in insider trading, fictitious payments, outrageous 'bonuses' that amount to huge fortunes, 'golden parachutes', accountancy fraud, plain theft etc.
"The speculation, the risky loans, the swindles, the subsequent stock market crashes and the disappearance of huge quantities of surplus value are therefore an intrinsic feature of the anarchy of capitalist production." 2



Some defenders of capitalism claim that the present crisis results from financiers holding the economy hostage. But, central banks, private banks, stock markets, and other credit mechanisms have been integral to the development of capitalism since its inception in the 18th century. Such instruments for creating currency out of nothing are required for the amassing and centralizing of money capital in order to permit the levels of investment required for vast industrial expansion that was beyond the scope of wealthy individual capitalists.

An industrial or financial entrepreneur could not acquire sufficient capital by saving or by risking his own money--no matter what the capitalist myths say. In all the industrial, corporate, and stock market gambling casinos, fat cats don't bet with their own individual fortunes but with monetized wealth created by fiat.


Capitalism Is a Failed, Destructive, Unfixable System
We must make sure that people worldwide understand that monopoly capitalism is no longer an acceptable or viable economic system--that we must replace it with a new commonwealth order.


"No economic system, particularly capitalism, left to follow its own logic unrestrained can possibly survive, as Schumpeter [Capitalism, Socialism and Democracy (1942)] stressed. In the end it will undermine itself. The idea of 'free market capitalism' is a dangerous illusion in a time of growing class polarization, monopolization, speculation, militarism, and imperialism. The politics of the right, lacking any substantial or rational basis, has increasingly turned to a predatory culture of open barbarism: the resurgence of open racism, war, imperialism, sexism, religious fundamentalism. Eventually such a society, trapped in stagnation and left to follow its own downward logic, will destroy itself and everything else within its reach--not through economic breakdown but through an intensification of barbarism on a global scale. 3



"For globalization to work, America can't be afraid to act like the almighty superpower that it is. The hidden hand of the market will never work without a hidden fist. McDonald's cannot flourish without McDonald-Douglas, the designer of the F-15, and the hidden fist that keeps the world safe for Silicon Valley's technology is called the United States Army, Air Force, Navy and Marine Corps."

Thomas Friedman, New York Times, March 28, 1999


Joseph Schumpeter, a Harvard apologist for what he called "rational capitalism," saw imperialism as a byproduct of a war machine and monopolization rather than an intrinsic property of capitalism. This part of his analysis of capitalism--as well as all the rest--has proven totally false. Global capitalism's poster child--the United States under the cabal--has openly adopted a strategy of retaining its economic and political hegemony through militaristic imperialism, announcing this to the entire world in the National Security Strategy of the United States released in 2002.
Workers worldwide need to comprehend that the present depression is precisely the same kind of total collapse of casino capitalism as America suffered in 1929. In 1932, all American banks were finally forced to close--which made it clear to America and the world that American and world capitalism had collapsed utterly.



Identical Elements of the 1929 and Current Depressions
1929 Depression Current Depression
Liquidity expansion:
In the "roaring twenties" the value of shares in the
New York Stock Exchange, the biggest in the world,
had increased five fold Liquidity expansion:
The FED has continued to pump currency into the stock market and investment funds resulting in the dot.com, stocks, and housing bubbles bursting
Stock market crash:
1932: stocks had lost 89% of their 1929 peak value
1929 share value was not reached again until 1954 Stock market crash:
A series of crashes beginning in the 1980s
Bank failures:
President Hoover refused to assist failing banks
All banks failed in 1932 Bank failures:
Banks are failing worldwide but most failures are being covered up by central bank loans
Banks are having to "write off" tens of billions of bad investments and are now going hat-in-hand to foreign investors to sell a piece of their business
GDP:

Down 50% in 1932 GDP::
20% decline in the GDP and a 50% decline in the value of the dollar
Unemployment:
13 million workers became unemployed with no relief to speak of; a third of the population sank into abject poverty Unemployment:
Unemployment figures are falsified; at least 25% of American workers are unemployed or underemployed
A third of the population lives in poverty
Fake investment (gambling) funds:
Brokers' loans, buying on margin: investors could pay down only a percentage of what they were investing Fake investment (gambling) funds:
Hedge funds: The estimated assets of these funds have risen from $491 billion in 2000 to $1.75 trillion in 2007. The funds' complicated financial transactions, mostly secret and unregulated, use debt as a tradeable security in the search for short term gain
The 1930s depression appeared to be the result of the 1929 Wall Street Crash, but 1929 only made apparent a systemic defect, capitalism's chronic overproduction in its decadent phase. This same phase of chronic overproduction began again as early as 1968, finally resulting in the present depression.
Home Foreclosures :

In 1932, over 250,000 families lost their homes; in early 1933, foreclosures were taking place at a rate of more than a thousand a day. Home Foreclosures:
About 1.3 million U.S. homes received foreclosure-related warnings in 2007. Through real estate shell games, the super-rich have looted at least $10-$15 trillion from workers.

Though the economic and political conditions at present are virtually the same as those in the 1932-1939 period in America, the response of the Franklin D. Roosevelt administration and the cabal-controlled Bush II junta are diametrically opposite.


Opposite Response of FDR Administration and Current Bush II Junta
FDR Response Bush II Junta Response
Home Owners' Loan Corporation (HOLC) bought mortgages from holders who could carry them no longer, financed the immediate payments, and rewrote the mortgages to provide for easy repayment over a long term and at relatively low interest rates. One out of every five mortgaged urban homes in America was an HOLC beneficiary. The Bush II/Congressional economic stimulus plan is largely limited to tax cuts for the wealthy. Of the $150 billion allocated, $100 billion will go for tax rebates for individuals and $50 billion for tax incentives for business. The scam "stimulus" package provides no new funding for unemployment compensation, food stamps or other social programs, or for public works. Democratic Congressional leaders agreed to drop any extension of unemployment and food stamp benefits as well as proposed funding increases for low-income heating assistance and state Medicaid programs.




Capitalism Gone Bust
Vulture capitalists are trying to make sure average citizens don't realize that their predatory shell game has totally disintegrated. The present crisis was triggered by the fall in house prices in America, along with the slump in housing construction and large scale defaults on mortgages by workers who couldn't afford the escalating interest rates of the infamous "sub-prime" or risky loans. Empty-headed consumers contributed by signing on to mortgage agreements they didn't bother to read and rapidly heaping up personal debt.

Shock waves then traveled throughout the entire world financial system. In August, 2007, investment funds and entire investment banks, whose assets included billions of dollars of sub-prime loans, either collapsed outright or had to be rescued. Two hedge funds of the US investment bank Bear Sterns crashed, costing investors $1 billion. The German bank IKD had to be bailed out and two investment funds of the French bank BNP Paribas failed. The shares of mortgage lenders and other banks declined sharply leading to steep falls on all of the world's major stock exchanges, wiping out billions of dollars of worthless "betting slips."

To befuddle world citizens into retaining confidence in capitalism and to allow banks to continue extending credit, the central banks--the US Federal Reserve Bank, the Bank of England, and the Eurobank--intervened through providing cheaper loans of additional billions. The hundreds of thousands of people made homeless by the "sub-prime" fiasco and the tens of thousands of workers laid off by the collapse of the housing construction industry didn't receive a penny of these loans from central banks. The dole went exclusively to the credit markets themselves--the very financial institutions who had squandered enormous sums of cash. These outlaws were being rewarded by receiving more gambling money. But this farce didn't solve the crisis.

The first clearly visible sign of the failure of world capitalism's bailout strategy was the depositor run on the fifth largest mortgage provider in the UK, Northern Rock, whose fraud strategy was borrowing from credit markets and then re-lending the money to homebuyers at a higher rate of interest.

As the credit markets began to crumble, so did Northern Rock. Even with the announcement of the rescue of Northern Rock by the Bank of England, long queues of depositors began to form outside the branches of the bank to withdraw their money, taking out £2 billion in just three days.

This was the first run of this type on a British bank in 140 years. To try to make sure depositors didn't start the same kind of run on other banks, the British and European governments stepped in to give a 100% guarantee to the depositors of Northern Rock and savers in other threatened banks.

Looter capitalism tries to conceal its failures through bailouts. TV "news" programs have run specials on how millions of homeowners were cannibalized by the subprime mortgage scam. But the personal catastrophes mortgage fraud victims suffered have all been neatly sanitized, with no one seemingly to blame for the devastation. And the CEOs of the fraud-perpetrating financial corporations, hedge funds, investment banks, and Wall Street firms are all silently gliding to earth with multi-million dollar parachutes to break their fall.


"The U.S. hasn't faced a downturn like this since the Great Depression of the 1930s."

Bill Gross, chief investment officer of Pimco, the world's largest bond fund, 2008


Intelligent, informed members of the working class--in mutual solidarity--constitute the only force capable of eliminating the failed anarchy of looter capitalism and developing a commonwealth system. Fortunately, the number of these persons is expanding and they're becoming increasingly disaffected with the rotting capitalist corpse. But we must help people worldwide realize that recent dramatic events, beginning in the housing industry in the United States, that have shaken international finance and the entire world economic system, are intrinsic symptoms of the total bankruptcy of predatory capitalism--not merely an accidental, temporary aberration.
Workers worldwide must be fully aware that the current depression is a clear sign of a process of disintegration endemic to capitalism that will inevitably lead to more and more violent convulsions and increasing human misery. Only this clear knowledge--and the dismay it fosters--will provide the momentum to replace predatory capitalism with an economic system for the common people.

The crucial need for action against vulture capitalism can only be kept in mind if workers remain constantly aware that they're being decimated by a system that deliberately aims to destroy as many of them as possible. Monopoly capitalists will attempt to keep people's attention diverted to irrelevant, trifling wedge issues--as is now the entire focus of the 2008 election campaigning. Reactionary issues and candidates--from both parties--will try to keep American citizens focused on forces that pursue policies objectively against workers' interests.

Obscenely rich people are no longer tolerable, because their looting of working class people bears no relation to what they contribute to society. Their predatory actions are neither proportional nor justified as inevitable economic success due to honest effort. Poor and middle class people can no longer believe that the economic system is fair and properly rewards those who work harder or have better capabilities.

Truly exorbitant economic rewards should arouse working people to a struggle against the entire monopoly capitalist system. When most prosperity and wealth is unfairly channeled to relatively few upper class people, it's only a matter of time until fuming, resentful people in the working class decide enough is enough and begin to throw the rascals out.

Now that the conditions of widespread affluence and freedom of economic mobility are no longer profitable for American capitalists, some of the more unpleasant and inevitable features of their oppressive order are affecting American citizens directly. The harsh realities of unemployment, slave wages, tax-slavery, and government harassment will provide the kind of incentive we need to consider deeper values in life beyond mindless, superficial, addictive entertainment and sports--the "circuses" provided by the present rulers. Now we can begin to explore what a commonwealth is and how we can train for it.

The present political-economic situation is a desperate one, with predatory capitalism having seized the reins of power in all nations. But progressive forces have historically moved human civilization forward even in such wretched times as these. In America, we need to remember that we have experienced genuine advancement in times of extreme hardship: the Progressive era, the New Deal, and the Great Society. Broadbased progressive movements have appeared which changed the direction of our country.

These reformist movements need to be understood in their material and social context so that we can comprehend why they were as successful as they were. In the early part of the twentieth century, when Wall Street and the railroads abused the farmers and the early industrial workers, resistance built up and radical politics came into play. In the thirties, ordinary working people were active in the New Deal transformations, unions were organized, and the corruption of corporate leaders was widely exposed. When the 1929 Wall Street crash brought on the Great Depression, factions of the ruling class recognized that they were virtually helpless to remedy the catastrophic situation. Both rich and poor supported Franklin D. Roosevelt's reforms and regulations, and capitalism was saved from itself, along with improvement in the plight of ordinary Americans. A strong liberal-labor bloc moved the country to the left.




“The middle classes could become a revolutionary class. The growing gap between themselves and a small number of highly visible super-rich individuals might fuel disillusion with meritocracy, while the growing urban under-classes are likely to pose an increasing threat . . . Faced by these twin challenges, the world’s middle-classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest.”

A 2007 report from the UK Defense Ministry's Development,
Concepts and Doctrine Centre suggesting what might happen by 2035




Which Way Will We Go?




Two diverse responses to the 1929 economic world depression led to two diametrically opposite political and economic systems:
The progressive New Deal of
Franklin D. Roosevelt

The fascist Nazi totalitarianism of Adolph Hitler





As I'm writing this essay on January 30, 2008, the FED has within 8 days raised the discount rate a staggering 1.25 points and Shell Oil corporation has announced £20 billion in profits for 2007. These are two unmistakable indicators that vulture capitalism has collapsed and its obscene excesses are no longer tolerable. Given that world capitalism is bankrupt, America will move either toward a progressive development of a commonwealth political-economic system or toward a total police state, a la the Hitlerian nightmare of 1930s Germany.


American Fascism
The cabal has already twisted America into an almost total police state under the Bush junta. It may now use the economic collapse of American capitalism to impose a complete fascist totalitarianism in which all dissenters are placed in concentration camps already built by Halliburton.

As was true in 1930s America and Germany--and again is true now--economic factors play a significant role in determining how a society evolves. After its demoralizing defeat in World War I, Germany suffered from the fiendish Versailles treaty being imposed on it by the "Allies." Germany was forced to pay incredibly large reparations to France and Great Britain, and was forced to give up thirteen percent of its land.

Economically devastated, Germany tried to recover from the war by way of social spending. But the revenue from income taxes began to fall. In 1913, over fifty three percent of all tax revenues was from income, but in 1925 it dropped down to 28%. Even with all its economic problems, Germany could have made reparation payments if foreign countries hadn't placed protective tariffs on German goods. French and British protective tariffs further depressed the German economy. Faced with reparation payments they couldn't pay, Germany began printing huge amounts of money, throwing Germany into a state of super inflation.

Inflation reached the point where common essentials cost millions of marks. Cartoons of the time depicted people with wheelbarrows full of money who couldn't buy a loaf of bread. To make matters worse, foreign lenders withdrew capital and world markets further closed against German imports. When the U.S. was hit by the great depression it immediately called in its loans to Germany. This, in addition to all of Germany's other problems, caused the German economy to collapse.

This state of runaway inflation and political breakdown with the collapse of the German Republic, made the German people particularly vulnerable to being manipulated by a predator like Adolf Hitler. Foreign vultures such as Prescott Bush (grandfather of Dubya) financially supported Hitler, creating conditions that would inevitably lead to a war in which predatory capitalists would reap huge profits.

Economic and political catastrophe in Germany led the people to embrace any way out. Along came Hitler with his plan for a swift economic recovery. Hitler outlined a plan where in four years he would completely eliminate unemployment throughout Germany. Never mind that Hitler's plan wouldn't raise the level of income for ordinary people--that it was a plan for a new militaristic imperialism. The German people felt desperate and allowed Hitler to seize power in the same way Bush seized power illegitimately in 2000.


American Commonwealth
The other possibility is that American workers will take back their country from the looting capitalists and institute a government and an economy for the welfare of all citizens. The challenge for the working class will be to defend and affirm itself against the annihilative forces of plutocracy, to gain confidence in its own forces and to become increasingly conscious that it is the only social force capable of overthrowing capitalism.

Roosevelt's New Deal progressivism saved America from devolving into a Hitlerian nightmare of militaristic fascism. However, it saved vulture capitalism from it own excesses and left it alive to begin again its relentless pillaging of the working class. The plight of workers improved but full economic recovery occurred only when it was harnessed to arms production in preparation for a new plundering of world markets in the imperialistic bloodbath of World War II. In other words, even the "miracle" of FDR's recovery was possible only when unemployed workers had been transformed into cannon fodder for a new world conflagration.

If we want a stable, just, egalitarian, sustainable world in which the "free development of each is the condition for the free development of all," there is no alternative but a long march to commonwealth propelled forward by a fully-informed, effective workers' movement.

A commonwealth can only be instituted when a small group of persons--having suffered under an oppressive form of rule and having prepared themselves for self-rule--take over the direction of a group or community. This preparation involves, among other things, the close examination of real, as opposed to assumed or imagined capacities, and the development of real competence.

A commonwealth can only come to those who are willing to work for the best and highest in human development for all. At almost any point in a nation's history it can be said: "Yes, there are problems here, but it could be worse. Instead of being a malcontent working for unnecessary change, be thankful for what you have." That has been said to every enslaved or oppressed group in human history. That's what the white owner said to his black slave, the British trying to mollify the oppressed colonists in America and India in the 1770s. The good is often enemy to the best. Today we hear: "What oppression? We never had it so good. Don't rock the boat." For many people, life under this present plutocracy, which they have been fully programmed to experience as a democracy, appears rewarding and complete.




To institute a commonwealth, we must study carefully how current economic cannibals will be defeated through philosophical understanding and activity.
1) How Philosophy Overcomes Tyranny

2) Overthrowing the New Slavery

3) The New American Civil War

4) Realizing a New World

5) Overcoming the Present Dark Age

6) Realizing the New Commonwealth

7) How Philosophy Overcomes Propaganda


Each of us has a part to play in helping people worldwide come awake to the devastation of the current world economic depression--using this awakened insight to overthrow predatory capitalism and institute a commonwealth order for the betterment of humankind.




"When I, the People, learn to remember, when I, the
People, use the lessons of yesterday and no longer
forget who robbed me last year, who played me for
a fool--then there will be no speaker in all the world
say the name: 'The People,' with any fleck of a
sneer in his voice or any far off smile of derision.
The mob--the crowd--the mass--will arrive then. "

Carl Sandburg, "I am the People"

[moeen yaseen]

THE END OF THE LINE FOR THE ANGLO-DUTCH SYSTEM
John Hoefle
http://larouchepub.com/other/2008/3513end_of_line.html

When President Richard Nixon took the dollar off the gold reserve standard on Aug. 15, 1971, he effectively ended the Bretton Woods system of fixed currency-exchange rates. Nixon's action, taken at the urging of bankers' boy George Shultz (then director of the Office of Management and Budget), set into motion the creation of the largest financial bubble in history, a bubble the collapse of which is now laying waste to the global banking system and securities markets.

The mantra rising from financial circles after such disasters is that "no one" could have foreseen the "unexpected events" which developed from policies and decisions that "everybody" agreed to at the time. You hear it frequently today, from people ranging from former Federal Reserve chairman Sir Alan Greenspan, to bankers whose allegedly "fundamentally sound" banks vaporize seemingly overnight. Who knew this could happen?

One man did know, and said so at the time, loudly and forcefully. That man is Lyndon LaRouche, who understood the implications of the demise of the Bretton Woods system, and has been campaigning ever since for a return to Bretton Woods-style fixed exchange rates.

LaRouche understood the matter not as a technical one about currencies, but as a fundamental fight between sovereign governments and the imperial oligarchs centered around the British empire and its parasitic Anglo-Dutch Liberal financial system. Any nation which cannot control its own currency is not sovereign, and any nation which is not sovereign is vulnerable to assault and subversion by this oligarchy. Will society be organized for the benefit of all mankind, or will it be organized for the benefit of a small elite who feed off the rest?

LaRouche understood this in 1971, and that understanding formed the basis for the creation of an international political movement to organize mankind to educate and defend themselves. LaRouche scored a stunning victory against prominent economist Abba Lerner at a debate at Queens College in New York, in December 1971, in which he laid bare the fascist roots of Lerner's outlook, and forced Lerner to admit his self-damning belief that had Germany capitulated to the demands of banker Hjalmar Schacht, "Hitler would not have been necessary."

The response from the parasites was immediate and predictable: Never again, they informed LaRouche, would he be allowed to challenge them publicly. Keep your mouth shut and follow the rules, or we will destroy you.

It was a big mistake. Rather than cowering in fear as so many had done, LaRouche decided to fight back, drawing upon his studies of the great ideas of history and his commitment to truth above all else.

Since then, LaRouche and his movement have been attacked by virtually every means in the Venetian tool-kit, from physical assaults to press slanders to prosecutorial frame-ups and even jail; hard blows were landed, but LaRouche persisted, knowing that despite its demonstrated power, the Anglo-Dutch liberal system was crumbling from within, that it would inevitably collapse as a result of its own cannibalistic policies.

That day has arrived. The events of the past year, from the turmoil in the mortgage-related financial markets to the blowout of the banking system, have proven LaRouche's analysis of the Anglo-Dutch Liberal system to be correct. What LaRouche saw as the inevitable result of Nixon's action in 1971, has now exploded upon the world.

Bretton Woods
During July 1944, a United Nations Monetary and Financial Conference was held at the Mount Washington Hotel in Bretton Woods, New Hampshire. The 44-nation conference established what became known as the Bretton Woods monetary system, a key component of which was the establishment of a fixed system of currency exchange rates among nations. Under Bretton Woods, a gold reserve standard was established, with the U.S. dollar pegged to gold at $35 an ounce. This arrangement was the economic bedrock upon which the post-World War II world was rebuilt, led by the industrial might of the United States.

Bretton Woods was a victory for President Franklin Roosevelt, and his view that the post-war world should be free of empires and their colonies. FDR intended to use the power of the United States and other nations to elevate the status of the common man worldwide, and end the domination of the economic royalists. It was a grand vision, and had he lived to implement it, the world would be in far better shape than it is today.

The British were apoplectic at the prospect of a Rooseveltian/American System world, and pulled out all the stops to defeat it. With the death of Roosevelt in 1945, and the ascension of Harry Truman, the empire struck back. The fear of a Soviet attack and the spread of communism was used to create a Cold War environment, under which the British empire became the top strategic ally of the United States, and FDR's grand vision was swept away. In the name of fighting communism, Truman and his Anglophile controllers sold FDR and America down the river. (The parallels to today's "war on terror" should not be missed.)

The British set out to systematically dismantle the American economy, as a way of restoring their own dominance in the world. They had to move slowly, because the memory of FDR and what he had done for the nation was fresh in people's minds, as were the abuses of the economic royalists he had fought, and because the American people would fight back if they understood what was planned.

One of the biggest obstacles to their plan was the Bretton Woods system, and the stability it provided to the U.S. and the global economy. For the British plan to succeed, Bretton Woods would have to be eliminated.

Pandora's Box
Nixon's 1971 decision effectively ended the Bretton Woods system, and introduced the era of speculation which has engulfed the world in the ensuing three decades. Pandora's Box was opened, and the evils of oligarchism were unleashed afresh upon the world.

Neither the United States nor the world has been the same since. Nixon's action, in conjunction with the launching of the rock-drug-sex counterculture and the cartel-building "world company" assaults of 1968, were aimed at destroying the basis for American industrial supremacy and the co-option of America back into the imperial system. The Baby Boomer generation, growing up under the hyped-up fear of thermonuclear annihilation, turned its back on science and sought escape in entertainment, opening the door for the oligarchs to destroy the nation.

Absent Bretton Woods, the oligarchy began to use its immense financial power to manipulate global currencies, and thus nations. The orchestrated oil hoax of 1973-74, with its introduction of financial speculation in the oil market via the spot market, created a huge pool of "petrodollars," with which the City of London could wage war against nations. These petrodollars, combined with the proceeds of the British empire's "Dope, Inc." drug trade, were instrumental in restructuring Wall Street in the 1970s, paving the way for the junk bonds of the 1980s and the derivatives of the 1990s.

The protections put into place under FDR were systematically dismantled, as the American economy was transformed from an industrial power into an economy based upon services and speculation. We became a nation of consumers rather than producers, our manufacturing "outsourced" to nations where labor was cheaper, falling for the lie that this would make us more competitive, when it was actually destroying us. Under the guise of "free markets" and globalization, we turned our own economy into a haven for speculation and the formation of giant corporate cartels, whose allegiance lay not with the nation, but with the financiers. We had become, in essence, that against which we fought the American Revolution.

The End of the Line
As the speculative bubble came to dominate the U.S. and world economies, feeding it became paramount. Among other things, this led to a sharp run-up in real estate values, to provide "wealth" which could be turned into mortgage debt, and then into a wild assortment of securities to be used, with lots of leverage, to play in the derivatives markets. To keep the mortgage-debt flowing, as prices rose into the stratosphere, the bankers repeatedly loosened the requirements for home loans. This process, which was driven by the banks and the derivatives market, ultimately exploded. This was falsely portrayed as a "subprime" crisis, but in reality it was the death throes of the financial system itself.

In mid-2007, the failure of two Bear Stearns hedge funds signalled the collapse of the global securities market, as speculators realized the game was over and began to try to cash out. The market for speculative paper quickly dried up, sending the nominal valuations plunging. The market which had grown phenomenally through leverage, began to collapse in a reverse-leverage implosion. Speculators had borrowed trillions of dollars to place bets, gambling that they would win enough to pay back their loans and still turn a nice profit. This game worked for quite a while, but it quickly turned nasty when the market seized up. Suddenly, the speculators found themselves losing on their bets, leaving no profits to pay off their loans, and thus losing on both ends. Assets began vaporizing by the trillions, and worried lenders began demanding more collateral on margin calls, causing sales of assets which further depressed prices, in a vicious, reverse-leverage spiral.

The "solution" to this blowout adopted by the central banks, was to begin to flood the financial markets with liquidity, through a series of interest rate cuts and cash injections. Though they had sworn to impose discipline on the markets, the central banks quickly capitulated under the pressure of enormous losses, in a hyperinflationary panic. The injections quickly escalated from the billions, to the tens of billions, to the hundreds of billions, as they raced to plug the holes caused by the savage deflation of the valuations in the system. But no matter how much money they injected, the system kept collapsing.

The crisis came to a head in mid-March, when the collapse simply overwhelmed the central banks, leading to the open bankruptcy of Bear Stearns, and with it, the death of the system. The astonishing speed with which the system collapsed can be seen in a series of extraordinary actions by the Federal Reserve over an 11-day period:

On Friday, March 7, the Fed announced that it would increase to $100 billion the amount of money it would loan to depository institutions through its Term Auction Facility (TAF), the special bailout mechanism it created in December to get the banks through the end of the year. To date, the TAF has held seven auctions, two in December which lent $20 billion each, two $20 billion auctions in January, two $30 billion auctions in February, and one $50 billion auction in March, with another scheduled for the week of March 24. Also on March 7, the Fed announced plans for a March 27 auction of $100 billion in repurchase agreements with primary dealers, a group of 20 securities firms with which it deals directly. All of these loans are for 28 days, and the Fed is accepting a wide range of securities as collateral.


Two business days later, on Tuesday, March 11, the Fed announced the creation of a new Term Securities Lending Facility (TSLF), to lend up to $200 billion in Treasury securities to the primary dealers, again in 28-day loans against a wide range of collateral. The Fed also expanded swap lines it had previously established with the European Central Bank and the Swiss National Bank, raising the amounts to $30 billion with the ECB and $6 billion with the SNB. These measures were coordinated with the G-10 central banks.


On Friday, March 14, the Fed and the Treasury helped arrange an emergency loan, of an unspecified amount, to Bear Stearns through J.P. Morgan Chase.


On Sunday, March 16, the Fed announced yet another new lending facility, this one to loan an unlimited amount to the primary dealers, beginning March 17. The Fed lowered the primary credit rate (discount rate) by a quarter-point, to 3.25%, and lengthened the maximum time for such loans to 90 days from 30 days. The Fed also agreed to guarantee $30 billion of virtually worthless securities held by Bear Stearns, as part of its "shotgun marriage" takeover by J.P. Morgan Chase.


Finally, on Tuesday, March 18, the Fed cut the primary credit rate another three-quarters point to 2.5%, and cut the Fed funds target rate by a similar amount, to 2.25%. The Fed has cut the Fed funds rate five times since September, when it stood at 4.75%.
Hyperinflationary Bailout
At the same time that the Fed is pouring money into the system with unprecedented speed, the government is moving ahead with a series of bailout measures designed to transfer the losses of the banking system to the public. In addition to the hundreds of billions of dollars of loans given to the banks through the Federal Home Loan Banks, the government is using the Federal Housing Administration to refinance and insure mortgages, and expanding the role of Fannie Mae and Freddie Mac in buying larger mortgages, effectively putting the taxpayers on the hook for the huge real estate losses working their way through the system. On top of that, we have the Bush stimulus plan and the apparent intervention by the Fed to keep the stock market from collapsing.

The futility of this approach was demonstrated by the fact that, despite all the interventions, the Fed was unable to prevent the collapse of Bear Stearns, the fifth-largest investment bank in the nation. We have now entered what is, in effect, an open-ended bailout of the U.S. banking system, in which the hundreds of billions spent so far will soon turn into trillions.

The fatal flaw in this approach, as LaRouche has warned, is that it is inherently hyperinflationary. That hyperinflation has already begun, and the money pumped into the bailout—money which serves no economically useful purpose—will only accelerate the process. This means that the faster the government pumps in the money, the faster the value of the dollar will collapse, and the faster the global economy will collapse. (For a pedagogical lesson on hyperinflation, we recommend the reader log on to the LaRouche Political Action Committee website, www.larouchepac.com, and view the 80-minute video "Firewall: In Defense of the Nation-State.")

Time for LaRouche
It has taken 37 years for the process set into motion by Richard Nixon in 1971 to destroy the global economy. During that entire period, LaRouche and his international political movement have been a consistent voice for reason, organizing in the streets and in the halls of government for a return to the sound economic policy of the American System, and an end to Anglo-Dutch Liberalism.

We have now reached the point where all of us must decide: Do we go back to what works, or do we descend into fascism and chaos, and a new Dark Age? That is the question we ask you to keep in mind, as you read the following reports.


BAILOUT ILLEGAL; BANKERS SHOULD BE JAILED
http://larouchepub.com/lar/2008/3513jail_bankers.html

Lyndon LaRouche insisted on March 20 that Congress should conduct an investigation into the criminality of the Federal Reserve and Treasury's bailout of the vaporized speculative "investment" bank Bear Stearns on March 16.

The Emergency Banking Act, passed by Congress on March 9, 1933, provides for government assistance to protect vital banking functions. That assistance is restricted to commercial banks.

Chartered commercial banks make up a vital part of our overall economy, but brokerage houses and investment banks such as Bear Stearns are strictly part of the speculative apparatus that has looted the economy and the population blind. That the Fed stepped in to provide tens of billions of dollars, or more, to save Bear Stearns, is prima facie criminal.

LaRouche charged on March 18 that the bailout represented a case of money laundering that should be prosecuted.

"It smells like another filthy Goldman Sachs scheme," LaRouche said. "I think it is time to increase the social status of our Federal prison population—by sending all those responsible for this abomination to jail.... These guys are cheating."

LaRouche added that the bailout scam "is an obstruction of our plan—the Homeowners and Bank Protection act and the three steps needed to survive," that he had identified in his March 12 webcast.

So far, the House Oversight and Government Reform Committee and the Senate Finance Committee are planning to investigate the actions of the Federal Reserve in providing the bailout of Bear Stearns, MarketWatch and the Wall Street Journal reported on March 19.

[TonyGosling]

Nice one Moheen - I certainly appreciate all your efforts and suggest people circulate details of this conference far and wide. About as close to 9/11, but on a 'bigger picture' subject, as it's possible to get because it spells out the motives for the war on terror.
Spelling out why Muslims are a threat to the ruling oligarchy.

[moeen yaseen]

ECONOMIC SUICIDE CLUB MEETS IN WASHINGTON
http://larouchepac.com/news/2008/04/03/economic-suicide-club-meets-was hington.html

A meeting of the Economic Suicide Club was held today on Capitol Hill, in the chambers of the Senate Banking Committee. Among the prominent members in attendance were Fed Chairman Ben Bernanke, SEC Chairman Chris Cox, Treasury Under Secretary Robert Steel, New York Fed President Tim Geithner, JP Morgan Chase CEO Jamie Dimon and Bear Stearns CEO Alan Schwartz. Master of Ceremonies for the occasion was Sen. Chris Dodd (D-CT). One after another, the members steadfastly defended their suicidal economic policy, often with more vigor than might be expected from people with such a pronounced death wish. Afterwards, they all attended a posh dinner in honor of Nero, and his brave determination to keep fiddling while Rome burned.

The gaunt figure of Death stood patiently outside the room. Asked how he intended to lure the club members to their new destination, Death replied, "That is easy. I just promised them they'd get their money on the other side. They can't wait to go."

"You can bank on it," he added, in his distinctly British accent.


THE ECONOMIST SPEAKS ITS MIND WITH A MOUTHFUL OF JELLO

The cover feature in The Economist now on the newsstands (March 29-April 4), is "A 14-Page Special Report on the Future of American Foreign Policy," headlined "All Change?" and "After Bush," which amounts to a British Empire view of what's ahead for the United States. One theme runs throughout the six sections, namely, that the "rivals" of the U.S. are Russia and China. "America's relations with Russia are likely to get even cooler than they are now." As for China, "America, in short, will come face to face with a country that might become its greatest rival in the 21st century."

Are there friends for America's future? The Economist states, "The most obvious reason for optimism is that Germany and France are now led by Angela Merkel and Nicolas Sarkozy, not Gerhard Schroeder and Jacques Chirac. Ms Merkel has smoothed American-German relations and distanced Germany from Russia. The change in mood has been even more dramatic in Paris, once the capital of European anti-Americanism."

In classic geopolitical mode, The Economist makes no mention at all of the relations of the United States to the imperial designs of London.

"What a difference a bungled war makes..." The Economist recounts the decline of the USA, and its tarnished global image, etc. How to regain stature? "The most obvious way to do that is to play a more active role in combating global warming", and resist the dangers of economic isolationism.

Any decent American patriot should remember that it was, in fact, Tony Blair's "bungled war" plan which failed. And, global warming? May we suggest some Jello; that might help the global turd that the British Empire might never pass.


THE CONGRESS LACKS THE MORAL COURAGE TO CALL THE BEAR STEARN'S BAILOUT ILLEGAL

Not a single senator on the Senate Banking, Housing, and Urban Affairs Committee had the courage to bring up the issue of the illegality of the March 16 Federal Reserve bailout of Bear Stearns during a hearing to investigate the bailout held on Thursday April 3. The committee hearing was chaired by fascist Felix Rohatyn controlled Senator Christopher Dodd. Members of the Senate Banking Committee could not have claimed that they were unaware of the illegality of the Bear Stearns deal since in the past two weeks the LaRouche Youth Movement had distributed Lyndon LaRouche's statement on the illegality of the deal to every office in the Congress and the Senate. This is yet another graphic example of what LaRouche has said about the need to mass organize the lower 80 percent to provide the leadership to the Congress. Congress is asleep at the switch.

During the hearing, Federal Reserve Chairman Ben Bernanke endorsed Senator Dodd's impotent bill, which is not a solution to the housing crisis or general economic breakdown. When told of this endorsement, Lyndon LaRouche commented, that Bernanke's endorsement of Dodd's bill proves that "Dodd is getting feeble-minded. Dodd is shifting his seat from Connecticut to New York's Orchard Street where he is putting himself up for auction."

Treasury Secretary Paulson was not present at the hearing by his testimony defending the Bear Stearns bailout was read by Under Secretary of Treasury for Domestic Finance Robert Steele. Lyndon Larouche commented on Paulson saying, "Paulson is stupid, and has been working for certain interest for so long, he doesn't know how to do anything else. He is a whore. That is his problem. They are destroying the country."