That was the response of one trader asked by a client what position he should take as markets collapsed round the world this week. Good advice. And that is the view that sellers seem to be taking as they forced the Dow Jones index fell below 9000 and London’s FTSE100 collapsed to around 4,000. Call it irrational if you like, accuse the markets of panic. But in fact they’re acting perfectly logically as funds and investors bump up their cash reserves and the traders mark down financial stocks on the grounds that the banks are still overexposed and still subject to failure.
They are right. At the heart of this continuing crisis is continuing loss of confidence at its financial heart. America has passed its $700bn bailout, London has announced its £400bn. But the markets have lost confidence that this is enough given the size of the problem and banks are still not lending to each other. Individual countries can do their best but we need a global response to what is a global crisis – central banks pouring more money in, monetary authorities instituting more coordinated rate cuts, regional wide plans to lend to banks and recapitalise them where necessary.
But above all we need a new US President. America is where it all started, America is where the toxic debt still poisons all, and only America can provide the new leadership needed. Stock markets will find their levels and even bounce back a bit. But I fear we must wait for the US election before real confidence can return to the world’s financial flows.
America is where all what started? The banking system? The modern banking system is around 400 years old and originated in Europe. All the big banking families are European and in fact all of the biggest also Jewish.
The Colonies, as America was then called, had an excellent Money Scheme in the 18th century. The states issued scrip and there was no interest to pay. There was full employment and when the money changers of London found out they destroyed this system by insisting that that the British make them pay taxes in silver. There followed a great depression and not many years later the revolution.
During the 19th century there was a power battle between the money changers who wanted to control the money supply and those in the US who understood this danger and opposed it. Although President Jackson won a famous battle in 1836 by closing down the central bank and wiping out the national debt, the bankers eventually won when in 1913 they established the FED.
Now we see the latest episode in a long running story of booms and busts, all of which have been manipulated by the Money Changers of Europe. A global response would be good only if the system is completely reformed and the money supply is in control of an institution that represents the interests of the people. Money should serve the people not the other way around.
The US plan was a bankers plan and a disgrace. The British plan is not as bad but still keeps the ponzi scheme going and transfers all the debts onto the dozy taxpayer who is annoyed that he cannot watch his football and rugby in peace at the moment.
There are Money Reform groups out there with very good ides including The Bromsgrove Group. Cynthia McKinney the Green Party Presidential candidate also has a very good plan.
The goal of boom and bust is to concentrate more power in the hands of the few. This always happens and it is happening this time too. If we do not take the opportunity that presents itself here to reform the system then the governments and central banks will just keep printing more and more money that will eventually in years to come destroy the value of every currency there is.
Posted by: scousekraut | Saturday, 11 October 2008 at 03:40 PM
Getting a bit tired of supposedly intellogent pewople saying its America's fault. NO foreign bank had to buy CDOs from anyone.
More important, until this crisis blew up, British financial organisations were planning on selling sub-prime mortgages on a large scale in the UK and would have done so if the credit crunch blew up. I know this because a s a software consultant I was discussing with several companies their plans for major assaults on this new market.
It should also be remembered that the British government has been running a massive deficit for years, and that the country has had a massive international and unsupportable deficit for years as well.
This is a global problem caused by the activities of governments and banks throughout the world.
You are right though, only America will lead us out of this mess because the Euros are collective hypocritical idiots and America is still the most dynamic and positive country in the world.
Posted by: Neil Murphy | Sunday, 12 October 2008 at 09:48 PM