We Are Broke - And Too Bad For The Rest Of The World?
The current credit crunch crisis not only impacts on all countries of the Western and Asian "worlds", but likewise impacts on all foreign aid to countries that need help from said "worlds" - i.e. no money to give, no foreign aid. The equation is as simple, as well as harsh, as that.
Anyone else seeing a worldwide catastrophe looming here?
Hence the following for your consideration:
Anyone else seeing a worldwide catastrophe looming here?
Hence the following for your consideration:
The West is Broke
And It's Not Just a Financial Bankruptcy
By Deepak Tripathi
October the 7th was a day of high drama and panic on both sides of the Atlantic. The New York Stock Exchange suffered further massive losses, despite the $700 billion rescue package coming into force. In London, shares in the banking sector collapsed, some falling by as much as 40 percent. The Chairman of the US Federal Reserve, Ben Bernanke, admitted that the risk of a deeper economic slump had increased. And George W. Bush, whose presidency looks destined for an ignominious end, pleaded for coordinated action by the leading industrialized countries. The International Monetary Fund estimates financial losses of around $1.4 trillion. But there is no certainty. They could be higher.
Central banks of several major countries have now announced cuts in their interest rates, after weeks of indecision when each country seemed to be engaged in domestic fire-fighting. America's rescue package was for its institutions, although, if successful, it would benefit others. On October the 8th, the British government became the latest to announce a bailout plan of its own. It will spend up to £50 billion in return for 'preference shares' in eight of the largest banks in the country. The measure gives the government some control over the banking system. And there will be restrictions on huge executive salaries and generous dividends to shareholders that have caused strong public resentment in recent years.
In the immediate run, individual governments have largely done what is best for their own economies rather than the global system. In Europe, the Irish Republic, Greece, Spain, Germany, and Britain, have taken unilateral action. Their conduct shatters what was left of the idea of unity in the European Union, especially among members of the euro currency zone. In the longer run, the era of deregulation of the kind we have seen in recent years is over. Protectionism in trade has migrated to the world of finance. How far the latest measures will succeed remains to be seen.
What we see is the result of a catastrophic loss of trust in the West. It goes well beyond economics and finance.
(Keep reading ...)
And It's Not Just a Financial Bankruptcy
By Deepak Tripathi
October the 7th was a day of high drama and panic on both sides of the Atlantic. The New York Stock Exchange suffered further massive losses, despite the $700 billion rescue package coming into force. In London, shares in the banking sector collapsed, some falling by as much as 40 percent. The Chairman of the US Federal Reserve, Ben Bernanke, admitted that the risk of a deeper economic slump had increased. And George W. Bush, whose presidency looks destined for an ignominious end, pleaded for coordinated action by the leading industrialized countries. The International Monetary Fund estimates financial losses of around $1.4 trillion. But there is no certainty. They could be higher.
Central banks of several major countries have now announced cuts in their interest rates, after weeks of indecision when each country seemed to be engaged in domestic fire-fighting. America's rescue package was for its institutions, although, if successful, it would benefit others. On October the 8th, the British government became the latest to announce a bailout plan of its own. It will spend up to £50 billion in return for 'preference shares' in eight of the largest banks in the country. The measure gives the government some control over the banking system. And there will be restrictions on huge executive salaries and generous dividends to shareholders that have caused strong public resentment in recent years.
In the immediate run, individual governments have largely done what is best for their own economies rather than the global system. In Europe, the Irish Republic, Greece, Spain, Germany, and Britain, have taken unilateral action. Their conduct shatters what was left of the idea of unity in the European Union, especially among members of the euro currency zone. In the longer run, the era of deregulation of the kind we have seen in recent years is over. Protectionism in trade has migrated to the world of finance. How far the latest measures will succeed remains to be seen.
What we see is the result of a catastrophic loss of trust in the West. It goes well beyond economics and finance.
(Keep reading ...)
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