BIS: Bailouts contribute to a worsening financial crisis
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BIS: Bailouts contribute to a worsening financial crisisGlobal Research, December 11, 2008George Washington Blog
http://www.globalresearch.ca/index.php?context=va&aid=11362
Many economists and financial writers warned about the bailouts making the financial crisis worse. But when BIS (the "Central Banks' Central Bank") says it, even the central bankers have to take note.
As BIS writes in their new report (bottom of page 23):
Increased central bank intermediation may in some cases weaken banks’ incentives to resume their intermediation function. For instance, borrowing from the central bank at close to the policy rate with no counterparty risk may arguably reduce banks’ incentives to raise funds from market sources. And narrow spreads between central bank target rates and the rates paid on excess balances also discourage banks from lending to other banks.We've been trying to tell you that for months .
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It's kinda like trying to pump water into a leaking balloon and being surprised it isn't filling up.
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Warren Bufett has warned the US govt of this undesirable outcome as long as one to two years ago. But sadly, no one is listening.
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Originally posted by Stevenson101:
It's kinda like trying to pump water into a leaking balloon and being surprised it isn't filling up.
This is what Waren Buffett called 'prolonging the pain'.
It seems that the US govt has learnt of the lessons of the 1929 Great Despression by not restricting liquidity flow in a recession (not adding oil to fire).
But the US govt has not learnt the lesson of letting a dying man (co.) dies his natural death.
It takes more than economics prowness and bravado to know the difference between that of geniune help and that of prolonging the inevitable.
The heart of banking ill lies not in lax liberalisation but its structure. Banking industry, as it is, is the dinosaur of the 21 centuries. -
Simply enough, the solution is to abolish the privately-owned Federal Reserve. However, the establishment will definitely oppose any attempts to end the Fed's monopoly over money creation and hence, economic slavery.
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they don't really have much choice, their society was built on the concept of easy credit. Take that away they would realise they're not really much richer than the average man in South America.
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So if a society is based on fraudulent concepts, its always better to continue the status quo? US Presidents John Adams and Andrew Jackson recognised the fraudulent nature of a privately-owned central bank having a monopoly over money creation and abolished the central bank of their time. When Andrew Jackson did that, the US national debt was reduced to 0.
The question is whether you want to be enslaved by bankers or not.
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Originally posted by freedomclub:
So if a society is based on fraudulent concepts, its always better to continue the status quo? US Presidents John Adams and Andrew Jackson recognised the fraudulent nature of a privately-owned central bank having a monopoly over money creation and abolished the central bank of their time. When Andrew Jackson did that, the US national debt was reduced to 0.
The question is whether you want to be enslaved by bankers or not.
You see too much in terms of black and white, it's not as easy as "It's flawed, so we just change the system and go on living the way we've always have." With going on living the same way - the key phrase, being impossible.
It's pretty much equivalent to us going back to the days of pre Independence where even water and electricity can get cut off without warning. It's not a Great Depression, it would mean the collapse of the entire country, where they can't even get the basic supplies to support its current infrastructure. A country with the most advanced military.
Don't get me wrong, i agree with your logic.
But i believe we've lived too long assuming everything around us as the way it's supposed to be that's why it has become so hard for us to envision how much these "fraudulent concepts" has already became part of our everyday lives. The bankers are not solely to blame here, we allowed these bankers to do what they do in exchange for the enjoyments we get now.
Turning around and saying it's all their fault and none of the responsibility is ours will only result in us repeating the same mistakes.
Not being accusational to anyone here, just stating what i feel is the root of the problem.
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Yeah, I agree. Its not that I expect everyone to have the same mentality that I do, but there has to be realisation that everything is messed up. The realisation that something is very wrong with the world.
In other words, we're exercising our free will to be screwed with.
And the bankers are exercising their free will to fuck with us until they are tired of it or are stopped by us.
I'm just trying to get people to realise that everything can change. It just has to start from within.
When people assume that everything is as it is supposed to be, it becomes a paralysing mentality and stiffles progress. This kind of mentality is manifested when people resort to name calling "conspiracy theorist" (you know who...) when they reject everything outside of the mainstream perception.
Again, I'll post this link- www.thezeitgeistmovement.com
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structure of the economy from the days of great depression is very much different from now.
although the bailout might prolong a rather slow but deep recession. but by doing nothing is definitely not accepted by the americans or the world.
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I don't think anyone seriously fully understands the problem now. It's a runaway crises. The problems of course can be traced to the lack of regulation, and the unwillingness of the free-market ideologues to face certain truths. Of course, these ideologues in question are fat cats who grow rich from the hard work of people, so expecting them to see the truth is like asking a dead rat to rise from the dead.
I think the real problem now, is that no economist knows what to do in this crises. Economics has always been... not really a science, to be blunt.
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Its much simpler than you think.
Economics has always been presented as a mess of numbers and charts that put the average person off.
The financial crisis in the US, like all the previous ones, is simply the result of monopolised money creation by the Fed. They create the money out of nothing, loan it to the US Govt at interest and create debt in the process. How can the debt be paid off if only the principle amount exists? Ultimately, the debt spirals out of control and bursts [whatever] bubble there is. Its not a credit, housing etc bubble, but a debt bubble. And in the long run, this system perpetrates economic slavery for every country that is under this fractional reserve system is owned by the central bankers.
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Originally posted by Fingolfin_Noldor:
I don't think anyone seriously fully understands the problem now. It's a runaway crises. The problems of course can be traced to the lack of regulation, and the unwillingness of the free-market ideologues to face certain truths. Of course, these ideologues in question are fat cats who grow rich from the hard work of people, so expecting them to see the truth is like asking a dead rat to rise from the dead.
I think the real problem now, is that no economist knows what to do in this crises. Economics has always been... not really a science, to be blunt.
Actually you're pretty close to the whole problem at hand, though i believe that Economics is a science but based on a flawed assumption.The core issue is that economics have always assumed that resources is unlimited, that our retrieval of natural resources will only increase and that the reserves will always be there. It's like assuming the money in our bank accounts as a living entity that would continue to grow.
Our grandparents would probably laugh at the whole idea if we explained it to them.
The funny thing also is that the US always preached free trade and anti protectionism to other countries but always believed that they should be the exception to the rule. I believe they only want it only because they know full well that they have the advantage in a free trade environment.
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lack of regulation would divert the problem back to american politics. which senator propose to deregulations of investment banks? what is the relationship of former SEC chairman to the recent madoff. sooner or later the financial crisis would go deeper into a corruption charges and so forth. it s never ending.
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Originally posted by Stevenson101:
Actually you're pretty close to the whole problem at hand, though i believe that Economics is a science but based on a flawed assumption.The core issue is that economics have always assumed that resources is unlimited, that our retrieval of natural resources will only increase and that the reserves will always be there. It's like assuming the money in our bank accounts as a living entity that would continue to grow.
Our grandparents would probably laugh at the whole idea if we explained it to them.
The funny thing also is that the US always preached free trade and anti protectionism to other countries but always believed that they should be the exception to the rule. I believe they only want it only because they know full well that they have the advantage in a free trade environment.
The USA is not and will never be the only chap that serves itself as it sees fit.
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Originally posted by 16/f/lonely:
The USA is not and will never be the only chap that serves itself as it sees fit.
True, but so far i haven't see a country yet that's so blatant about it. -
Originally posted by Stevenson101:
True, but so far i haven't see a country yet that's so blatant about it.
Oh yeah?I would bet my dough any country with that kind of military and whatever projection would do such things.
Anyway, your assumption of economics is flawed. Economics recognise that certain resources are unlimited, and I don't quite get what you mean.
In truth, USA preaches but does not practice not because it believes it is the exception but more because why should it? Isn't EU doing the same thing? Isn't Japan doing the same thing? Isn't even China and all the E Asia tigers doing the same thing with their protectionism?
What's the difference then? The difference lies in the USA's big mouth that trumpets capitalism and its colonialism mentality. That it has a job to "teach" us what to do, because capitalism had prevailed.
To make matters worse, much pressure comes from the big-shots, not from the govt, but from the trade unions, CEOs and all the ugly sides of capitalism had to bring.
In revelling all the fruits of capitalism, there has been too much emphasis on deregulation and free market theory which the USA actively pushes for the others to follow.
If the USSR had prevailed, it would probably be even more blatant.....the truth is blatantness is here to stay.
Perhaps the biggest reason is insecurity.......an insecure country will push heedlessly. And insecurity is why nuclear arms remain. And that insecurity does not exist without a reason.
To sum it all up, why should the USA be blamed for everything? The world shares in the fault, and the sufferings.
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Certainly no argument from me there, i've always believed the root to be a human one not limited to nationalities or race.
My point is that Economics' maths are based on unlimited growth and resources. I don't quite get what you mean by the flawed assumption.
When you say Economics recognised certain resources are unlimited, that's what i say the problem is. The actual amount might be vast enough to be difficult for us to imagine but it can't be unlimited.
The point of pointing the USA out is to recognise it is just as hypocritical as the countries it condemns. And that the problem is not going to be cured in some magical fashion by blaming any particular group or adopting a particular system, especially when it's humans ourselves that are the problem.
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Originally posted by Stevenson101:
Certainly no argument from me there, i've always believed the root to be a human one not limited to nationalities or race.
My point is that Economics' maths are based on unlimited growth and resources. I don't quite get what you mean by the flawed assumption.
When you say Economics recognised certain resources are unlimited, that's what i say the problem is. The actual amount might be vast enough to be difficult for us to imagine but it can't be unlimited.
The point of pointing the USA out is to recognise it is just as hypocritical as the countries it condemns. And that the problem is not going to be cured in some magical fashion by blaming any particular group or adopting a particular system, especially when it's humans ourselves that are the problem.
I beg your pardon....but what do you mean by economics is based on "unlimited growth" and resources?It's sad but true.......certain aspects of human behavior won't change in a hurry.
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I agree with Stevenson.
As Dr Albert Bartlett said "The greatest shortcoming of the human race is our inability to understand the exponential function."
In our make shit, buy shit economy, I mean consumer economy, GDP growth is measured as a percentage increase over the previous year's growth rate. On a graph, GDP growth is not a line, but an exponential curve. In the long run, this kind of growth cannot continue in a finite world and thats why consumerism and materialism is two of the most paralysing social concepts. Ultimately, when our resources run out, everything collapses.
Thats why we need to shift to a resource-based economy. http://www.thezeitgeistmovement.com/
I blame the US for the world's problems because the US Govt has already been hijacked by profit and power hungry corporations. As a result, corporations use the US's hemegonic influence in the WB/IMF to wage economic warfare on Third World countries via debt slavery, monopolise Third World markets and destroy domestic industry. Because the US has, or had the greatest economic, political and military power, its only natural for most of the blame for the world's problem to be heaped on her.
But on a fundamental level, it is definitely human nature to desire power. But I could argue that the existence of money creates an environment where competition and exploitation must exist.
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Money would have existed anyway....because we tend to learn new tricks and twist them everytime.
There's nothing in this world that cannot be abused.
I won't blame the US wholly. Not when G8 and history carries on binding us.
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Yeah, money has always existed but in our age of technology, we could create a world where there is no need for money. Thus, no more competition (at least materially) and no more exploitation (based on profits). The point is to be willing to consider a world without money.
That reminds me of an old discussion on this- http://sgforums.com/forums/10/topics/338046