About the credit crunch

My humble greetings.

Here are some random thoughts I’ve been having regarding the credit crunch. I’ve only recently started taking interest into finances so please go easy on me. I might be completely wrong on everything, so I urge you --the reader-- to correct my fault and teach me something new.

Thank you.

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The entire thing could and, in my humble opinion, most probably was manufactured. I do not, for a second, believe that the bad credit / insurance issue has been going on for so long without anyone knowing about it. Someone definitely knew about it and allowed it to happen, making huge profits, no doubt.

When it got out and the game was seemingly up, what did the government do? It borrowed ( at interest ) $700 bn US from the Fed and dumped it into saving bad credit the banks had on their books, without even knowing how much bad credit anyone actually has. The way the fractional reserve banking works, banks can from the rescue package create about nine times more money. That’s 6.3 trillion dollars being added to the overall money supply, effectively decreasing the value of existing money.

So in the last two weeks we’ve seen how people are starting not to trust banks with their savings and deciding instead to not deposit with them, making silent bank runs in order to ensure their saving are returned to them. Due to fractional reserve banking, the banks will never have enough money to pay out all their deposits and inevitably go bankrupt.

This reflects on the stock market as people loose confidence in the financial companies, which are now also reluctant to give out credit as they: 1) never know when it will be their turn to start repaying deposits/debt and 2) don’t trust other banks as they also don’t know how much bad credit the competitor has. So financial stocks go down and due to lack of credit people and companies that otherwise would invest in the market are unable to do so. It’s almost like the perfect storm.

This has some potentially very bad consequences for the effected markets.

1. Their stock value goes down on a daily basis becoming easy pray for those who have money to invest, not needing huge credits. Any of the OPEC countries, with vast amounts of surplus dollars and stockpiles of gold come to mind. This would potentially explain why the price of gold seems to be going the opposite way it usually does when markets start to go bad. China is also probably sitting on a huge pile of dollars due to their long-lasting trade sufecit(sic) with the US.

2. Devaluation of the dollar. With new money in form of dollars being invented every day in order to “remedy” the markets, it’s value is being pounded into the ground. The dollar isn’t backed by anything other than the US military and as such is a valid currency for only as long as other nations are prepared to take them on as national reserve currency. This is only made worse by other nations buying cheap stock from dollars they’ve been keeping, adding them into circulation as a result of their purchase.

3. Quality of live. Ultimately the US taxpayers will be billed with the $700bn US, moreover their existing money value will take a much harder hit due to money inventing required to accommodate for ever expanding credit. Inflation is a certainty, unless foreign nations are prepared to ensure a shortage of dollars. My guess is that they are more and more reluctant to do this.

4. Depression, job-less-ness, etc.

So why would anyone purposely do this? It seems horrible. Well it really is horrible, … to us. But, there are people who stand to gain from the current financial situation in the world.

First and foremost the Fed. The actual owners of the Fed. With them injecting insane amounts of money they are, with debt, enslaving the populace even more. They stand to gain the most from devaluating the dollar. Firstly because they can always create more, and when that no longer works and the world is totally saturated by the volume of dollars circulating; what they’ve done is reduced their international debt to a virtual zero.

When this happens it’s time to introduce the North American Union and the Amero.

Countries attempting to use their military force in retaliation will be dealt with swiftly and brutally. This is actually preferred, as to set an example for the others.

Moreover, the fed stands to gain the most from making use of the situation in such a way as to broaden their authority, expand it’s field of control and influence under the premise of such a move being necessary for preventing future occurrences of the said problem. Suppression of calls to change the system is necessary at this point. The people must not be allowed to change the system.

Those who say the system is broken must be either ignored or suppressed by force should they become organized to the point of being heard.

The system has always worked. Always! Perfectly!

Just not for you.






-- have a nice day.

Ain't read it all, but there is one universal maxim

THE MARKET IS ALWAYS RIGHT.

So when the market has 'corrections' what is this?

The whole problem is simple, people thought they would have more return than expenditure. They were wrong, but every incentive encouraged them to 'take a risk' and an excessive one at that. This is not new economics, rather old economics coming to bite. The $700 bn is very powerful though, it does allow us to freeze, rather than rot, or so the argument goes.

Personally I want the Vatican bank bust, so a consortium can direct the future of Catholicism. It's happened before.......

Originally posted by redled
Personally I want the Vatican bank bust, so a consortium can direct the future of Catholicism. It's happened before.......

I've never thought about that. The memory of Vatican actually having a world class bank has alluded me completely. Now you got me wondering how they're doing in this crises.

reply to post by Manawydan


No mate, they don't need a bank. They have the mafioso take care of all of that.