Adonis Diaries

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Any direct connections between slavery and capitalism?

How Slavery Led to Modern Capitalism?

A slave being auctioned, 1861

A slave being auctioned, 1861. Source: Sketch by Thomas R. Davis, Library of Congress, Prints and Photographs Division

The story told about slavery is that it is almost always regional.  Wrong. It is an inherent US national story.

The story goes that slavery was a cruel institution of the southern States that would later secede from the Union. Slavery, in this telling, appears limited in scope, an unfortunate detour on the nation’s march to modernity, and certainly not the engine of American economic prosperity.  That’s a very funny story. For example:

“New York City banker James Brown tallied his wealth of $1.5 million in 1842. Brown investments in the American South exceeded a quarter of his wealth, which was directly bound up in the ownership of slave plantations.  Brown was among the world’s most powerful dealers in raw cotton, and his family’s firm, Brown Brothers & Co., served as one of the most important sources of capital and foreign exchange to the U.S. economy.   Most of James’ time was devoted to managing slaves from the study of his Leonard Street brownstone in Lower Manhattan.

Nicholas Biddle’s United States Bank of Philadelphia funded banks in Mississippi to promote the expansion of plantation lands. Biddle recognized that slave-grown cotton was the only thing made in the U.S. that had the capacity to bring gold and silver into the vaults of the nation’s banks.

The same facts were recognized by the architects of New England‘s industrial revolution watched the price of cotton with rapt attention, for their textile mills would have been silent without the labor of slaves on distant plantations.

Consider the history of an antebellum Alabama dry-goods outfit called Lehman Brothers or a Rhode Island textile manufacturer that would become the antecedent firm of Berkshire Hathaway Inc.”

The story goes that the civil war was to abolishing slavery in the southern States.  That a lie and big smokescreen to reality.  

The northern modern capitalists, specially those born in the 1840’s and made their fortune building railways, telegraph, and media…wanted to keep controlling the southern gold goose: Cotton production transformed into gold by export, and worked by the black slaves.

The southern elite class of “nobility” wanted the gold to be kept in the south and not be controlled by the new northern capitalists class.

After the war, the north wanted gold to be the currency, and the south wanted the “Green-buck” paper currency as the national money because they had no gold.

Gold or Green-buck, it didn’t matter to the north: the money presses were in the north anyway.  And slavery remained in the south, and was transferred in the north to making hats, shoes, hoes

The enterprises transformed slave-grown cotton into clothing; market other manufactured goods to plantation owner.  Or invest in securities tied to next year’s crop prices in places such as Liverpool and Le Havre….

America’s “take-off” in the 19th century wasn’t in spite of slavery; it was largely thanks to it.

And recent research in economic history goes further: It highlights the role that commodified human beings played in the emergence of modern capitalism itself.

Such revelations are hardly surprising in light of slavery’s role in spurring the nation’s economic development.

The U.S. won its independence from Britain just as it was becoming possible to imagine a liberal alternative to the mercantilist policies of the colonial era. Those best situated to take advantage of these new opportunities — soon to be called “capitalists” — rarely started from scratch, but instead drew on wealth generated earlier in the robust Atlantic economy of slaves, sugar and tobacco.

Fathers who made their fortunes outfitting ships for distant voyages begat sons who built factories, chartered banks, incorporated canal and railroad enterprises, invested in government securities, and speculated in new financial instruments.

This recognizably modern capitalist economy was no less reliant on slavery than the mercantilist economy of the preceding century. Rather, it offered a wider range of opportunities to profit from the remote labor of slaves, especially as cotton emerged as the indispensable commodity of the age of industry.

This network linked Mississippi planters and Massachusetts manufacturers to the era’s great financial firms: the Barings, Browns and Rothschilds.

“A major financial crisis in 1837 revealed the interdependence of cotton planters, manufacturers and investors, and their collective dependence on the labor of slaves. Leveraged cotton — pledged but not yet picked — led overseers to whip their slaves to pick more, and prodded auctioneers to liquidate slave families to cover the debts of the overextended.

The plantation didn’t just produce the commodities that fueled the broader economy, it also generated innovative business practices that would come to typify modern management.

As some of the most heavily capitalized enterprises in antebellum America, plantations offered early examples of time-motion studies and regimentation through clocks and bells. Seeking ever-greater efficiencies in cotton picking, slaveholders reorganized their fields, regimented the workday, and implemented a system of vertical reporting that made overseers into managers answerable to those above for the labor of those below”.

Capitalists reworked the accounting methods: labor force was incorporated in human property depreciation in the bottom line as slaves aged, as well as new actuarial techniques to indemnify slaveholders from loss or damage to the men and women they owned.

Property rights in human beings also created a lengthy set of judicial opinions that would influence the broader sanctity of private property in U.S. law.

As scholars delve deeper into corporate archives and think more critically about coerced labor and capitalism, (perhaps informed by the current scale of human trafficking) the importance of slavery to American economic history will become inescapable.

Reparations lawsuits (since dismissed) generated evidence of slave insurance policies by Aetna and put Brown University and other elite educational institutions on notice that the slave-trade enterprises of their early benefactors were potential legal liabilities.

Recent State and municipal disclosure ordinances have forced firms such as JPMorgan Chase & Co. and Wachovia Corp. to confront unsettling ancestors on their corporate family trees.

Note: Post inspired by the article of Sven Beckert and Seth Rockman, historians at Harvard University and Brown University respectively.  They are  co-editing “Slavery’s Capitalism: A New History of American Economic Development,”

To contact the writers of this post: Sven Beckert at beckert@fas.harvard.edu and Seth Rockman at Seth_Rockman@brown.edu.

George W. Bush explains: The financial crisis

“The information and pieces of intelligence I had, the principles that I followed, and the decisions that I took…In a few decades, I hope to be appreciated as a President who kept his promises to protecting his country…A president who took advantage of the influence of America in order to disseminating liberty…Whatever is the verdict of History, I wish I am no longer among the living.” G.W. Bush

I am reading the French version of “George W. Bush: Decisive moments”.  I consider this book an “Official documents”: A President of the USA is not entitled to lie on facts.  It is our duty to mine this document for another set of facts in order to rectify distorted images and impressions.

“In my first budget of 2001, I warned of the two gigantic private societies of Fannie Mae and Freddie Mac.  These two powerful financial institutions, guaranteed by Federal government, have grown to be potential problems:  They expanded outside their initial guidelines of promoting private properties into functioning within speculative funds.  Fannie Mae and Freddie Mac had huge leverage compared to institutions of same size and initial capital: vast amounts of transactions were done with all kinds of investment enterprises, and they were taking huge risks susceptible of carrying decisive repercussions in the financial markets.”

My plan was to reduce taxes. By 1999, taxes represented the highest share in the GNP since WWII.  President Clinton and Congress had agreed to increase discretionary expenses by 16% in 2001. In March 2001, we witnessed a recession and I begged Congress to act quickly on my tax reduction reforms of 1.35 billion.  Tax reform will not take effect until 2003.(See note 1)

Then, the attack on the Twin Tower in 9/11/2001 devastated our economy.  The US lost 500 billion in a single year, an additional one million workers were out of jobs, airliners had no passengers, and tourism dropped 90%.  Whatever budget surpluses we had vanished in thin air.

In 2003, I advanced a project of laws to tighten regulations on Fannie Mae and Freddie Mac, which enjoyed government support.  It turned out that most high level personnel in Fannie Mae and Freddie Mac and the key deciders, were previous government officials and these enterprises had established vast web connections and interests among the Congress and Senate members, particularly with democrats.  For example, Chris Dodd and Barney Franks who declared: “Fannie Mae and Freddie Mac are not facing any financial crisis.”

In the 2005 budget, I iterated my strong warning: “Enterprises and organizations financed by federal governments are viewed by financial enterprises as enjoying strong leverage compared to other private enterprises.  Consequently, any minor error in government supported financial institutions can send devastating waves in the country economy…”

Treasury secretary John Snow worked closely with Senator Richard Selby, president of banking committee, for stricter regulations that would reduce the portfolio of government guaranteed financial institutions.  The democrats in the Senate opposed the reforms.

Investment bank Bear Stearns was facing serious liquidity problems in March 13, 2007:  This financial institution had borrowed $33 for each dollar in capital as leverage to invest in real estates titles. Treasury secretary Hank Paulson, (a former investment banker of Goldman Sachs), found a buyer in JPMorgan Chase on condition that the government extend a loan of 30 billion to purchasing “toxic titles”. JPMorgan Chase purchased Bear Stearns for $2 a share.

By summer 2008, I had demanded the financial regulation reform 17 times.  In July 2008, Congress adopted the reform, but gave the treasury secretary additional power to injecting capitals Fannie Mae and Freddie Mac to maintaining liquidity, if need be. Jim Lockhart realized in August 2008 that Fannie Mae and Freddie Mac were on the verge of bankrapcy.  China and international financial institutions were dead certain that Fannie Mae and Freddie Mac were financially guaranteed by the Federal government.

Treasury secretary Hank Paulson decided to place Fannie Mae and Freddie Mac under direct government supervision.  Paulson said: “We’ll act so swiftly and take them by surprise, Fannie Mae and Freddie Mac won’t have time to say ouf!”  Amazingly, Fannie Mae and Freddie Mac decided not to challenge the decision in court.

On September 2008, Lehman Brothers declared a loss of 4 billion in the last quarter and its stock market dropped from $16 to 3.6.  Bank of America was more interested in acquiring Merrill Lynch, and the British bank of Barclay was faced by a rejection of the British government for the deal.  On Monday Sept. 15, the 158 year-old investment institution closed door.

Question: “Why Lehman was not saved by the government as it did with Bear Stearns?” Plausible answer: Hank Paulson wanted a serious competitor in investment banking to disappear!

“Wall Street gets drunk: It is up to common people to wake up with headaches”

Note 1: Bush claims that tax break on the richest 1% increased from 38.4 to 39.1% (whao), while the poorest 50% of the population enjoyed a reduction from 3.4 to 3.1% (double whao)

Note 2: So far, G.W. Bush keeps the record of worst perpetrator of crimes against humanity in this century: Bush Junior was directly responsible of the death of more than one million Iraqi civilians during his “preemptive war” against a dictator that was no threat to any State anymore.

Feudal system adopting modern financial schemes:The case of Island vote on referendum.

In 2007, the average income of the around 350,000 “citizens” of Island was 60% higher than the average US citizen, and was ranked 5th in the world.  The gas guzzling 4*4 were crowding the streets.

Iceland was a feudal system for 600 years, an extension of the kingdom of Danmark. Cold-water fishing was the main income generator.  Before 1940, 14 families represented the feudal system: They supplied the elite classes for the political, economical, and financial institutions.  The 14 families were known as “the Octopus”.

During WWII and after, the economy of Iceland boomed, thanks to the US “Marshall” economic and financial plan, the establishment of an US military base to servicing the NATO in Western Europe, and for enjoying a highly educated small population.

By 1980, the government had instituted vast public social services, financed by taxes, and competing in quality with Norway, Sweden, Danmark, and the Netherlands.  The local oligarchies was taking care of the “citizens”.

The “Octopus” dominated all the major sectors in transport, import, fish export, banks, insurance… The Octopus was represented by the “Independence” political party that controlled the medias, the army, the police force…

In the 70’s, students in law and business published the daily “Locomotive” and this daily managed to break through the Octopus monopoly in politics.  After the fall of the Berlin Wall in 1989, the Locomotive brought to power David Oddsson.

In 1998, Iceland had three public banks.  Oddsson reigned for 14 years as PM:  He privatized the three major banks.  The banks were headed by members of the Octopus families: The Landsbank representing the IP party, the Kaupthing  representing the CP party, and the Glitnir, servicing the small enterprises.  The banks acquired assets over 100% of Iceland GNP in 2000.  The assets jumped to over 800% of the GNP in 2007, second after Switzerland. 

Oddsson carried out a “liberal” economy, lowered the tax and TVA rates, and the citizens could borrow up to 90% of their income.  The financial oligarchy took over the political structure.  In 2004, Oddsson headed Iceland central bank!

Iceland was vying to become a major international center for financial transactions.  The three banks borrowed from one another to repurchase shares in their own societies. 

In the decade 1990 and 2000, Island political regime facilitated the job of private interests to enacting public laws and regulations that encouraged financial institutions to balloon the financial sphere of activities.  This financial system imploded even before the financial crisis of 2008.  The dynamics of Bubble economy was taking hold.

In 2006, the financial press started criticizing the stability of the financial institutions in Iceland: The three banks were having difficulties getting loans from the financial world market to sustain growth and maintaining liquidity.  Iceland deficit grew to 20% of GNP in 2006.  The stock exchange “capitalization” in 2007 was 5 folds the level of 2001.  The central bank could not have rescued the banks in times of crisis.

The financial crash of 2008 pressured the government to re-nationalize the 3 banks.

The hot question is: “Is there a legitimate institution linked to popular sovereignty that is capable of opposing financial institutions supremacy?”

April 10, 2011:  60% of the citizens of Island answered “NO” in the referendum for paying back deposits made by British and Netherlands depositors into the private bank “Icesave” in Iceland.  They had answered “NO” in 2010 by 93%.  The Financial Times wrote: “It is now legitimate to advancing the citizens’ interest before banks.”

What is the financial Icesave scheme? 

In 2006, the three banks were hard-pressed generating fresh money to resume new acquisitions and reimbursing their debts.  Icesave is basically an internet service attracting deposits, at lucrative interest rates that traditional banks would not offer.  Over 300, 000 British and Netherlands private depositors were lured into this scheme. 

Within 18 months, universities, police associations, and even the Audit Commission of London were enjoying early high income.  The entities of Icesave were agencies and not affiliate and thus, under the control of Island authority and not the European Union economic Space.

Another financial tool used was what was known as “Love letters” since the credits are simple promises for repay.  The mechanism is for the three big banks to selling credits to smaller regional banks, which they deposit at Iceland central bank for fresh guaranteed loans.  This tool is generalized internationally and the big banks opened affiliates in Luxemburg and use the EU central bank.

Two weeks after the fall of Lehman Brothers, Iceland is facing a serious situation:  the currency is in free fall, the government buy 75% of the shares of Glitnir Bank, and Britain freezes the assets of Landsbank.  Joblessness climbs to 9% and Iceland witness a reverse immigration of the workforce, back to their country of origin.  The IMF imposes the constraint of reimbursing the debts of Britain and the Netherlands for any further loan extensions.

In October 2009, the Parliament of Iceland agrees to repay $5.5 billion, or 50% of the GNP, in the years 2016-2023.  But the government changes tactics and demands a referendum for validating the parliament decision. 

Basically, what the referendum said: “Send the bill back to whoever made your finance deficit worse”.  I could understand that logic if the international financial institutions made loans to the poorer States governed by oligarchies, dictators, and absolute monarchs who never mean for the money to be invested in society and human development. 

The case of Iceland is highway robbery:  It was intentional never to pay back the deposits, and it was done by the government who had nationalized the three major banks.

Note:  The information were taken from a thorough article published in the French monthly “Le Monde Diplomatique.  The article was written by Robert Wade and Sila Sigurgeirsdottir.

In 2008 and 2009, the FEd played the role of world central bank and lent to foreign multinationals and financial institutions. 

First, the US central bank encouraged the speculative financial funds and institutions to buying credit card debts, student financial aids, and car credit debts by extending up to 95% of the necessary funds at very low-interest rates of between 1 to 2%.  This mechanism was very profitable to speculative funds since they generated up to 50% profit.  Two-third of the $71 billion in Treasury Bills loans have been reimbursed in this short lapse of time.  Questions: “Who paid up for these profits? Are credit card high interest rates still applicable?  With whose money?”

Second, the independent Senator of Vermont, Bernie Sanders, wrote the amendment to the Dodd-Frank law, which forced the US central bank to disclose all the financial short-term loans extended to foreign banks in Treasury Bills.  A tentative account revealed that the Swiss bank UBS received 37 billion in October 2008, the British Barclay was infused with 10 billion (Barclay had purchased many branches of the failed Lehman Brothers), the Belgium Dexia 23 billion, the German Commerzbank 13 billion, the French BNP Paribas, Societe generale, and Natixis many billions.

In addition to banks, the FED lent to multinational manufacturers such as Toyota, General Electric, Caterpillar, Harley-Davidson, Verizon, and even McDonald:  It appears that all these companies have their own financial speculative institutions.

So far, 21,000 transactions covering 3,300 billion have been revealed:  The in-depth accounting is resuming its job.

Information/Communication Technologies (ICT): Transmitter of crisis and catalyst of global economic restructuring; (Dec. 19, 2009)

Astronomical sums are invested in the technologies of information and communication (ICT). In 2008 alone, over 1.8 $trillion were spent by private and public institutions.

Since 1980, half the total investments by banks and financial institutions have been oriented toward the ICT sectors so that exchange of information and transactions be as fluid and instantaneous as desired on global scale. It followed that banks and financial institutions were drawn to diversification into acquiring factories, lands, real estates, and mines.

Multinational ICT companies were frequently reconfigured to adjust with evolving strategies and global market access.

Before the financial crash, Citigroup hired 25,000 computer programmers and invested 5 billion on ICT technologies and related infrastructure in 2008.  Lehman Brothers was using 3,000 programs on 25,000 servers around the world. 

This run for ICT technologies was viewed as the main tool for “space-time bailout” by channeling capitals to emerging sectors susceptible to inevitable expansion. The age in the 70’s was coined “society of information”.  Thus, in 2007, US multinationals profit from outside investment amounted to 25% compared to only 5% in 1960.

So far, Information and Communication technologies are the two main factors for capitalist global economy expansion and have displaced many traditional economies. For example, Skype (voice on internet) has over 400 million users and is the most important provider of international communication. Skype was the catalyst for the explosion of high debit mobile phone infrastructures and for the demand of internet services to enterprises. Facebook has 300 million subscribers (to be updated to over 900,000?).

Mobile phone is displacing computers and TV markets: there are over 4.5 billion users of mobile phones and the latest generations function as multimedia screens. Apple’s mobile has swept China and South Korea markets; over 100,000 programs were developed for its applications.

Amazon, Apple, and Google (via YouTube) have broken serious barriers into cartels in music, books, video games, and movies. Low priced connections are provoking the centralization of programs, data, images, and emails are frequently stored in “farm servers” belonging to giant operators.

In 2005, 19 out of the 25 first ICT enterprises were from the US and over half the satellites are US. Heavy weight consumers of ICT such as Wal-Mart and General Electric impose standards on information and communication systems that are applied globally.

By 2009, Samsung, Nokia, Nintendo, Huawei, Tate, SAP, Telefonica, DoCoMo, Americal Movil, Vodafone, and especially China Mobile are displacing minor US players among the 250 greatest enterprises. Newer investments are primarily flowing from China, India, and Mexico in ICT.

Although Cisco (the prime provider in web routers) has accumulated financial reserve of $20 billion, Microsoft (the emperor of systems of exploitation) around $19 billion, Google (dominating search engines and on-line video) around $16 billion, Intel (world leader in semi-conductors) around $10 billion, and Apple (programs most prized by elite users) around $26 billion, only China Mobile generated profit of $18 billion in 2009.

Publicity expenditures in 2009 amounted to $500 billion (though they declined by 10% after the financial crash), but multimedia expenditures in the US in 2008 reached $900 billion and are increasing by 2.3%. 

The giant ICT companies are trumpeting acquisition of competitors and setting the stage for an unknown educational, cultural, and economic world.  The capitalist global economy is going ahead and strong because of IC technologies; we have the impression that the world is reduced to a town square.

China: the main Capitalist partner to the US (January 11, 2009)

 

            “Communist” China is the largest accumulator of dollars with a reserve of two trillions or two third of its GNP. With such a reserve China is currently the main capitalist partner to the USA; China has interest that the dollar does not devalue, that its currency the Yuan does not increase in value which would make Chinese products less competitive, and that the financial system does not break down.  “Communist” China is catching up quickly on Japan for the purchase of Treasury Bonds, a way of lending the US the needed cash to resume a Capitalist financial policy.  China is not only the factory of the world but also the prime banker to the US.

 

            The Chinese Wen Jiabao PM stated after the financial crash of Wall Street: “We have got to unite. In these difficult times, China has joined the USA.  We believe that our financial rescue will aid at stabilizing the economy and world financial system and thus, preventing a major chaos.  I believe that cooperation is indispensable”.   China is expecting full cooperation of the US in erecting a new Capitalist system and it has more muscles than the European Union in enforcing the re-structuring of the financial system that would guarantee its investments in the USA that amount by the trillions of dollars.

 

            Many of Chinese investments in the USA are in the red after the crash.  The US multinationals that China invested heavily in have been saved with Chinese influx; Fannie Mae and Freddie Mac were saved too.  Lehman Brothers was not spared for reasons.  The Bush Junior Administration had selected Lehman Brothers to artificially increase oil prices to $150 through speculation in order to hurt the ever voracious China in oil demands.  China reacted vigorously.  The world financial system was rotten and China demanded to cooperate in the timing of the crash if the US wanted China to stabilize the financial system after the crash.  Lehman Brothers was the sacrificial messenger of the impending financial crash.

 

            The financial strength of the US was based on the dollars as the universal currency in world economical exchange.  Bretton Woods (in New Hampshire) agreements in 1944 on the financial rules consecrated the pivotal power of the dollars; the British economist John Maynard Keynes tried hard during this conference to create a new world currency the “Bancor” but the US imposed its hegemony. Since then “the US administrators could decide what they wanted and it was up to the rest of the world to pay up the deficit”; Treasury Secretary John Connally stated it clearly “The dollar is our currency, but it is your problem”. 

 

            In 1960, the French President De Gaulle denounced the “exorbitant privilege of the dollars”.  Since the 1980’s investment capitals have been going into the USA and then the US multinationals would re-invest the borrowed capitals wherever they desired; 90% of US Treasury Bonds are purchased by foreign States. Nixon was very comfortable de-linking the dollars from the value of gold and the world had to go along with whatever the US Administrations thought was beneficial to the US regardless of the ultimate danger that exposed the world financial system.

 

            Consequently, States opted to save the surpluses of their dollar in “Sovereign Funds” meant to purchase foreign companies and enhance the flux of technology and know how and the latest management and financial methods.  In one decade, the weight of the dollars in the reserve of world exchange has decreased from 71% to less than 61%. Still, the currencies of the EU, China, and Japan are not that widely used and adopted to counterweight the power of the dollar in trade exchange; but the center of gravity is clearly shifting toward China.

 

            President Elect Barak Obama wants to re-invigorate US economy with major State investment (with Chinese cash); he must be closely cooperating with the Chinese on the amount and ways of re-launching the US economy.

 

Note: The Chinese regime was mute on the atrocities committed in Gaza; apparently, China is not hot on matter of human rights and crimes of wars and does not want to open the Pandora Box of its own horror stories.

Code name for the timing of the Wall Street crash: rule China (part 2, November 23, 2008)

The code name for the precise timing of the financial crisis was:

 Artificial oil price increases or (AOPI) and the messenger was the multinational financial brokerage firm Lehman Brothers.

All the members in the cartel of the financial multinationals received the order to activate the countdown for the Wall Street crash: they sold out their shares to invest in anything that has real value.  The little people who invested their life savings in stocks paid the price.

The FED, the Treasury and all the US multinational financial institutions knew the theory of Money Trade Cycle that when the trend of inflation is continuously on the rise then the outcome is a financial crisis.

The theory established that businesses and economy follow a pattern of upswings and downturns, and if the government refrains from meddling with the normal interest rates of doing business then the market economy based on real value-added economy will adjust to the changes.

The problem was that the USA was no longer producing any real value-added economy for decades: the US consumers were enjoying low priced items imported from China and the manufacturing bases were exported overseas to benefit from cheap manpower and limited legal constraints.

The world had already experienced a vivid advance taste of financial crisis in 1989 in the south-east Asian markets, Japan and Latin America.

The fundamental problem was tackled by the Asian States and they worked harder to produce value-added economy.

The successive US Administrations and politicians had no guts to tell the American people the hard facts, that a recession is as sure as the sun rises, and that getting back to work harder on producing what people need to buy is a must.  Instead, the US multinationals resorted to creative embezzlement fiduciary schemes (secondary and tertiary worthless paper money gimmicks) to resume world financial market hegemony

The FED knowingly, through political pressures, kept lowering the interest rates below the healthy level of a normal market economy which overextended credits for a decade and thus generated inflation rates that could no longer be controlled or stabilized.

The US Bush Jr. Administration decided, unilaterally and without a UN resolution, for a pre-emptive war on Iraq.  The US Administration invaded Iraq on the basis that the military expense will generate many folds in profit through the control of oil distribution and blackmailing the neighboring Arab rich sovereign funds of the potential threat of Iran.

The Arab rich States were no fouls of that strategy but they went along.  They are mere small States of oligarchies and monarchies with no national identity. If these States were nations then the citizens would have taken stands; any stand would have cost much less than the trillions of dollars injected for the US citizens to resume their lavish spending on consumerism, new gas guzzling cars, stocks, and overvalued Real Estates.

The FED, the Treasury and the cartel of multinational financial institutions knew that the normal scheme of siphoning in the sovereign funds of the oil rich States and the small stock investors had reached a plateau.

It reached a plateau because the investors realized that a crisis is in the offing and the scheme could not function normally unless the same level of increase in junk paper investment is maintained.

Since the scheme reached a plateau then it was time to decide on the appropriate timing to activate the financial crisis: it was much better for the crash to take place at the very end of an administration and then to pressure the politicians to agree on a financial rescue package.

The timing was perfect: since no more foreign financial rescue is coming in then the financial rescue will happen under duress from all rich States.

The motto was: either you caught up under duress or you will all have to suffer a global economic recession.

The world lauded the US for its timely energetic reaction of rounding up 700 billion dollars to rescue the failing commercial banks.

Wrong; the package was already decided upon before the crash and the bold figure of 700 billions dollars was psychologically marketed as covering the 60% of the unsolvable Real Estates: the US people would gladly preserve its homes and pay for it.  The trick: this package is a first installment and other packages are waiting in the queue pending the appropriate political conditions.

Well, financial rescue came from everywhere but this didn’t stop recession anyway. How can you stop recession when the USA is not producing any value that people are ready to purchase?

The worst part is that President Obama is not willing to challenge the US citizens with the hash facts, at least not for a long time to come.

The US people has preferred the lax attitude since the Reagan Administrations: most of the US citizens wanted to believe in an illusory wealth assuming that the worldwide acceptance of the dollars as the currency of choice is more than sufficient to keeping the illusion alive and kicking.

The hard facts are in; tackling decades of myopia and dependence on the hard work of the other people has to be grabbed by the horns.

The world recession is the making of the lazy, faint hearted US people who failed, in their cockiness, to recall what made them a great nation!

Only one giant Nation is winning: China.

China got the USA by the throat. The US is totally dependent on China in cheap import products and the purchase of US treasury bonds for many decades to come. China can direct the US financial policies and foreign policies. It had done it already. The US had been doing it with the Latin American States and everywhere else for decades. Rule China, rule!


adonis49

adonis49

adonis49

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