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Another Bailout Story    
Thursday, September 25 2008 @ 04:15 PM GMT+4
Contributed by: Maus Anon E

OtherAnother iBratter noted that September 19 will mark the day that the world of finance changed forever - like Black Thursday in 1929. (I'm too lazy to look up who made the statement)

I've suggested that one of the things September 19 will mark is the end of America's leadership in global finance. Over the last several months, other countries' economies have suffered as a result of the sub-prime mortgage crisis. Ireland, for example, has had its booming economy stunted, halted in its tracks. The reason isn't that their economy is weak or unstable, its that their banks and financial institutions are dependent on U.S. banks and the U.S. financial markets.

A credit crunch in the U.S. means a credit crunch in the rest of the world, arresting even healthy, growing economies.

As the U.S. dollar loses value, players in the dollar-based global economy are losers. Global inflation is rising and, although the bailout is welcomed overseas, it is going to exacerbate inflation.

I predicted last weekend (to myself, anyway) that Europe would not stand for the status quo for very long. With their robust economy, there's no reason for them to continue to suffer under our financial blundering. I think we'll see the rise of the Euro as the new world currency, and Brussels will set global economic policy.

And today, a shot across our bow:

"Germany blamed the Anglo-Saxon capitalist model today for spawning the global financial crisis, saying the United States would lose its financial superpower status and will now have to accept greater market regulation.

In unusually stark language, German Finance Minister Peer Steinbrueck told the German parliament the financial crisis would leave "deep marks" and proposed eight measures to address it, including a ban on speculative short-selling and an increase in bank capital requirements to offset credit risks.

"The world will never be as it was before the crisis," Steinbrueck, a deputy leader of the centre-left Social Democrats, told the Bundestag lower house.

"The United States will lose its superpower status in the world financial system. The world financial system will become more multi-polar," he said.

Steinbrueck lay the blame for the crisis squarely on the United States and what he called an Anglo-Saxon drive for double-digit profits and massive bonuses for bankers and company executives.

"Investment bankers and politicians in New York, Washington and London were not willing to give these up," he said. "Wall Street will never be what it was."

http://www.irishtimes.com/newspaper/breaking/2008/0925/breaking38.htm

The Europeans are angry, and perhaps rightfully so.

 

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  • Another Bailout Story | 7 comments | Create New Account
    The following comments are owned by whomever posted them. This site is not responsible for what they may say.
    Another Bailout Story
    Authored by: gmb on Thursday, September 25 2008 @ 06:04 PM GMT+4
    The money powers have always been located in Europe, with the City of London (the Square Mile) being the finance capital of the world and Switzerland close behind.

    "London was still at the top of the financial pyramid with New York"

    -Alan Greenspan K.B.E. September 25, 2002 in a speech to business leaders and dignitaries at both the Treasury and the Bank of England after recieveing his K.B.E...Or Knight Commander of the British Empire...By Queen Elizabeth the Second.

    The United States is merely the demand for the world economy (the consumers) and the U.S. housing market has been the main source of the credit expansion for the past 60 years.

    American is set to take the fall for this mess (and we deserve it), but you will find culprits in Europe as well.
    Another Bailout Story
    Authored by: Maus Anon E on Friday, September 26 2008 @ 02:27 AM GMT+4
    Yes. I'm talking about, and they're talking about, the global financial framework. That erector set has been under U.S. control since the end of WWII when Europe was still in deep turmoil. The current current global crisis is a failure of that framework.

    ---
    Freemarket economy: A socialist system in which workers' earnings are redistributed to affluent citizens.
    Another Bailout Story
    Authored by: SJD on Thursday, September 25 2008 @ 08:23 PM GMT+4
    Another Bailout Story
    Authored by: SpudHill on Saturday, September 27 2008 @ 08:05 AM GMT+4
    Since you've now printed this link in two different posts could you please
    explain why you think the NY Times would be sorry they ever ran this
    article? I'm not following your train of thought. Thanks
    Another shot across the bow
    Authored by: Maus Anon E on Friday, September 26 2008 @ 11:33 AM GMT+4
    How many shots across the bow until we get hit?

    TOULON, France, Sept. 25 -- French President Nicolas Sarkozy warned Europe on Thursday that it cannot escape shock waves from the U.S. financial crisis and that to protect its future, it must take the initiative in rewriting worldwide banking rules to end the "folly" of an under-regulated system he said is now "finished."

    Sarkozy, who also holds the European Union's rotating presidency, said he would propose swift action by the 27-nation bloc at its next meeting to tighten controls over European banks. But beyond Europe, he said, the leaders of all the world's major industrial powers should gather at a special summit before the end of the year and start to construct from scratch a new financial and monetary framework to replace the U.S.-dominated system set up at Bretton Woods, N.H., in 1944.

    http://www.washingtonpost.com/wp-dyn/content/article/2008/09/25/AR2008092504285.html

    The replacement of the U.S. financial system would probably mean the end of the dollar as the global currency. The value of the dollar, such as it is, is based on this system - based on oil, mainly. (Oil has been exclusively traded in dollars since the early '70s, although, in reality, most oil was traded in dollars since the 1940s.)
    The dollar is already fallen and falling. What do you think will happen if Oil (and everything else) is traded in Euros?

    ---
    Freemarket economy: A socialist system in which workers' earnings are redistributed to affluent citizens.

    And here comes another one
    Authored by: Maus Anon E on Friday, September 26 2008 @ 05:25 PM GMT+4
    From today's Guardian:

    Gordon Brown appeals to UN for financial regulation body

    Gordon Brown's UN speech calls on leaders to back his plan for an international financial body to regulate chaotic markets

    Patrick Wintour in New York guardian.co.uk, Friday September 26 2008 16:49 BST

    Gordon Brown appealed for world leaders to back the idea of an international supervisory body to bring order to the chaotic markets in a speech to the UN general assembly in New York yesterday.

    He made his appeal, part of a long campaign to win support for more effective regulation of global capitalism, before heading to the political turmoil of Washington and a hastily arranged meeting with the US president, George Bush.

    There's much more at:
    http://www.guardian.co.uk/politics/2008/sep/26/gordonbrown.marketturmoil

    ---
    Freemarket economy: A socialist system in which workers' earnings are redistributed to affluent citizens.

    Another Bat#^!$ Story
    Authored by: annikee on Monday, September 29 2008 @ 02:10 AM GMT+4
    Isn't this the same kind of circular domino pile that happened in 29? Except it wasn't a Global Economy then, and so things fell quickly...

    What continues to astound me is that money is all a construct of our group hallucination; if it is only what we say it is, why can't these geniuses figure it out?

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    "Landlord say your rent is late; he may have to litigate! Don't worry, Be Happy."-Bobby McFerrin