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Sunday, September 28, 2008

Financial Crisis: Laws Are Relative to Self-Interest

This of course only applies to Bankers and Politicians. Laws with us are also subjective depending on the value derived for Bankers and Politicians. This article is a liberal Socialist viewpoint. Their solutions are of course, more socialism while they blame the crash on free market principals. The Free Market has not existed in the world since the introduction of fiat currency in 1933 with the rescinding of the Gold Standard, HJR-192, by the American Lenin; FDR. The only solution of course is to go back to a metal-backed standard such as Gold, Silver and Platinum like the U.S. Constitution requires by Law. Even Liberal Communists, ie Democrats and Neo-Con Fascists ie Republicans, both realize there is a major problem now. They just do not have any solutions, they both flounder like beach whales looking for more drugs to mask the pain. Only Ron Paul knows what to do eliminate the FEDERAL RESERVE which can be done with a stroke of the pen, you could even use the same pen that created the FEDERAL RESERVE in 1913 by the four congressman that were present at the vote on Christmas eve. Unfortunately the Average American's IQ will need to rise about 100 points in the next week to understand the debt notes are not MONEY. MONEY IS GOLD, not Paper. It is true that paper has more flexibility than Gold. You can write on it, you can send people to die with it, you can kick them out of their homes with it, you can wipe your ass with it, you can burn it, you can even make origami out of it. You, however cannot base a functional society on the use of paper. The concept of using a Universal Xerox copier as the sole currency of the world is dead. Ding Dong the witch is dead, the evil wicked witch is dead. No matter what the non-vertebrae Politicians do this week, the Crash is still coming. The true cost of the debt is about 14 Trillion dollars, what is 700 Billion worth of fake money going to do?
In the great depression; they were burning money for fuel, paper does burn although it is not the most efficient alternative fuel. You may want to check in Ethanol for a more viable alternative. The upside to the Financial crash? You make get to see some bankers and stock brokers jumping out of windows again on wall street. Get those camcorders and race down to wall street to enjoy the collapse of the Federal Reserve System. May God help us bring back the Gold and not the Amero.

Yvette Cooper 9/27/2008
Totems are tumbling, shibboleths lie shattered. When the US Republican administration proposes buying banking assets worth more than several European countries put together, you know the normal rules are being torn up.

That means politics has to change too. In the US, despite the rows over detail, Republicans and Democrats alike have been ready to think the previously unthinkable. Here the Labour government has had to move fast to respond to changing circumstances, and more will need to be done. But the Conservatives have proved slow to keep up with seismic events, opposing the measures our economy needs.

The scale of the challenge is considerable. Dodgy lending decisions in the US housing market have infected financial institutions across the globe. Over-complex bundling of assets, lent round the world and back again, meant banks, credit ratings agencies and national regulators all struggled to understand where the risks lay. Banks have lost confidence in each other and global credit markets have frozen up. Add to the mix, wild fluctuations in world oil prices and increasing food prices. The Irish economy is now in recession. France and Germany have experienced negative growth. And the UK economy is under pressure too.

Governments, central banks and regulators across the world are rightly taking unprecedented action to promote financial stability. Our decision to rescue and nationalise Northern Rock, apparently radical at the time, has been overshadowed by much larger takeovers across the Atlantic with the US government now backing half the mortgages in America.

Central Banks are stepping in to lend banks the cash they can't get from each other. The US is debating buying "toxic assets" off the banks. Here we have introduced the Special Liquidity Scheme which allows banks to swap illiquid assets for three years, to tide them through the turmoil.

Destructive speculative short selling has been suspended. We have changed competition rules to support financial stability too. And we will need to go further both to respond to fast moving events and to restore functioning markets in the public interest. Worried savers are angry. City reform is needed. Tougher regulation is being introduced.

The Conservatives have resisted many of the measures needed to get us through the worst of the financial storm. They opposed Northern Rock nationalisation on principle. Last week George Osborne defended short selling, even amidst signs speculators wouldn't flinch from pushing a fragile market over the edge.

Were this simply the odd bad call, it could be put down to the inexperience of opposition. But I think it's more than that. Underpinning the Conservatives' economic approach is a wider philosophy on "rolling back the state" and replacing it with the politics of "nudge," where government steps back and simply encourages social values instead.

Of course there are plenty of fields where social values are far better than state intervention, or where government action is not in the public interest. But sometimes only governments are big enough and legitimate enough to protect the public interest when markets spectacularly fail. Nudging speculators isn't a fat lot of use when the stability of the entire banking system is at stake.

The problem for the Conservatives is that they want to claim all the market problems are the result of failure of government. As a result they are blinding themselves to the importance of government solutions to the failure of markets. So rather than face up to the crisis in global private sector credit, they are desperate to claim the real problem is UK public sector debt.

As well as being bad economics, this is a dangerous game for the Conservatives. Given the current pressures on our economy, it is right to increase borrowing this year -- and we can do so exactly because we cut debt from the levels we inherited in 1997. The alternative Conservative plan of cutting borrowing right now and pursuing a balanced budget would hit the economy hard and seriously threaten public services too.

No government can prevent global slowdown. But we can take the decisions to support financial stability, to help businesses and families through the tougher times, to support those who are hardest hit, and promote markets that function in the public interest to support growth for the future.

But that depends on government playing a sensible role, not pulling out as the Conservatives have suggested. The fragility of financial markets means the stakes are now higher than ever. As Gordon Brown said in his conference speech, those who don't believe in the potential of government shouldn't be trusted to form one.

Yvette Cooper is Chief Secretary to the Treasury

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