Economists: Another Financial Crisis on the Way

A group of economists have issued a report stating that another financial crisis is on the way.


Economists: Another Financial Crisis on the Way

In the report, the panel, that includes Rob Johnson of the United Nations Commission of Experts on Finance and bailout watchdog Elizabeth Warren, warns that financial regulatory reform measures proposed by the Obama administration and Congress must be beefed up to prevent banks from continuing to engage in high risk investing that precipitated the near collapse of the U.S. economy in 2008.

The report warns that the country is now immersed in a "doomsday cycle" wherein banks use borrowed money to take massive risks in an attempt to pay big dividends to shareholders and big bonuses to management – and when the risks go wrong, the banks receive taxpayer bailouts from the government.

"Risk-taking at banks," the report cautions, "will soon be larger than ever."

The report blasts some of Washington's key players. Johnson writes, "Our government leaders have shown little capacity to fix the flaws in our market system." Two other panelists, Simon Johnson, a professor at MIT, and Peter Boone of the Centre for Economic Performance, voiced similar criticisms.

Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner "oversaw policy as the bubble was inflating," write Johnson and Boone, and "these same men are now designing our 'rescue.'"

I'm guessing most here will not be surprised to learn they think if we hit another crisis it will be worse than the current one.

The crux of the issue (the way this Frog sees it) is that the current system rewards those in power (either government or financial) and screws everyone else. However, since those in power make the rules - why would they change it?

By and large we are no longer debating if this will happen, but when. It took almost the whole decade to bring about the crisis of '08. I don't think we have another decade to figure it out. We may only have a few month as the reinflation of the bubble started in high gear and no one in policy circles is downshifting at all. We're headed toward a cliff at a much faster rate than ever thanks to the bailout bubble. When this #er pops we are seriously screwed.

Food/survival supplies/ guns and ammo.
I believe it is time to start thinking about serious preperation.

Stay safe people.

Yup, you're right. The Elite have always screwed the masses. And it goes on at an ever increasing rate until they go one step too far and then the masses react. Take, for example, France leading up to the revolution. Same issues all around. Finally the masses had enough and rolled-out the guillotine.

Maybe it's time we go retro on these a'holes.

reply to post by projectvxn


i completly agree bud, its not a matter of if but of when. the only optimistic ones out there are the talking heads in the media and government cronies... if i was able to find a job you can bet id be stocking up but as of now, im screwed...

[edit on 3-3-2010 by TheCoffinman]

reply to post by TheCoffinman


yeah I'm in the same boat and I don't think a second time around Canada will be able to absorb the hit as well as the last time. We have a large deficit for a country of thity million people and its likely to increase. We have 1.5 million people out of work and a lot of the jobs lost aren't likely to return.

There was an article today talking about the great recession being over and how Canada needs to look to creating the jobs of the digital future. All nice buzz words but ultimately America and Canada are intertwined in their economies and both our countries have sent most of the work overseas. Were large service economies now that produce little and essentially move money around from a to b to c to d and so on.

Like a hamster in a wheel, its only a matter of time before it gets tired and hops off (okay terrible analogy I know)

Cheers

reply to post by Frogs


Time to write letters to your local politicans, whatever country you are in. The U.S and U.K should pay off the debt it has in it's own currency and plow money into direct job creation on a vast scale. This is our only hope.

If you look back at the Great Depression there was a crash then a small recovery then an even bigger crash. Exactly the same is about to happen.

My personal stance is those in the know have 2 choices..

The first choice to create a job based recovery or face civil unrest when the bail out bubble pops..

Or choice 2, war..

No one is putting real money into creating jobs, infrastructure, or laying any future foundations of a job based recovery.. and they can not let another bubble burst if they want to avoid civil unrest.

IMHO they do seem to be heading off the cliff in regards to the second choice, which I find pretty cr*ppy really.. Since I really do feel we are better than the wars we end up fighting.

The current rate of increase in Credit and Currency derivatives is about $1,000,000 per second, according to usdebtclock.org.

The only way to create jobs is to create additional customers for existing businesses, thereby increasing demand for products. The only way to increase customers is for people to have more money to spend. The only way to increase spendable cash is to cut payroll taxes to put more money in Customer's pockets. Instead they will increase taxes taking even more spendable cash away from potential customers. The scenario unfolding is not positive.

[edit on 3-3-2010 by mrbarber]

Originally posted by thebulldog
reply to post by TheCoffinman

 

yeah I'm in the same boat and I don't think a second time around Canada will be able to absorb the hit as well as the last time. We have a large deficit for a country of thity million people and its likely to increase. We have 1.5 million people out of work and a lot of the jobs lost aren't likely to return.

... All nice buzz words but ultimately America and Canada are intertwined in their economies and both our countries have sent most of the work overseas. Were large service economies now that produce little and essentially move money around from a to b to c to d and so on.

You are essentially wrong. Canada's debt is the LOWEST per head for nearly any industrialised country. Banking regulation here has made certain that the Canadian banks are amongst the safest in the world.

Likewise, although Canada imports vast amounts of goods, particularly from China, much of what China makes is made with Canadian lumber, metals and other Canadian resources.

The big risks to the country are:-

1. Some dumb-ass Liberal Party win at the polls. Their leader has already said that he actually wants MORE trade with China, flooding the country with MORE goods.
2. Collapse and civil war in USA. Here Harper has been doing the right thing. In Washington, policy analysts have been baffled (because they are stupid) at how trhe Canadian-US border has been "thinkening" on the Canadian side with the slow motion redeployment of Canadian forces from places like Quebec to bases that just happen to be on the border with the US.
3. The imminent collapse of stocks bonds and currencies like sterling and the US dollar would leave Canada, in effect owning the world with US$1 becoming overnight worth little more than a mere few Canadian cents.

Originally posted by thoughtsfull

My personal stance is those in the know have 2 choices..

The first choice to create a job based recovery

Now utterly impossible. The money has been P1SSED AWAY on rubbish in the US. There is no money left to do this.

One of the few actual hopes in the UK. David Cameron is publically campaigning on the basis of slashing public expenditure including big cuts in the "civil service". If the mountain of all the people paid to watch the surveillance camera and hand out stupid tickets for leaving their wheelie bin open were booted out, the savings could, maybe, at thos point, drag the nation back from the brink of outright collapse.

There are several big problems though:

1. Obama is STILL doing the opposite, spending every last nickel the nation has access to like a homeless crack addict paying for his next hit with all his rent money in the midst of an Arctic Winter.
2. David Cameron might not win.
3. The situation is deteriorating so fast, I suspect that the UK economy will collapse within 40 days with rioting in the streets and most of the banking system gone.
4. There is likely to be no election, but martial law to stop the rioting.

reply to post by Frogs


just another example of unregulated Capitalism... the die is being cast for the public mindset to Demonize both Capitalism and the institutions with the desire and power to abuse the social-economic system.

We are being subtley programmed that the Administrations regulatory reforms are nothing but shadow enforcers, in fact there are no Agencies presently, which can mandate what the bankster pirateers can do with the bailout funds they have received or the leveraging the value of deposits
for their private gain.

No, we are being ingrained with the notion that only IMF, WTO, IPCC, BIS, and the U.S.FED or another created global, super agency can remedy the distortions caused by these rogue capitalists.

~Surrender Soverignty~ is the unspoken suggestion

Until we as a country take over our monetary system and genuinely reform it we are doomed and NOTHING will change. As long as we cede power to create money to private banks it will be private banks that continue to suck the wealth out of our economy while it puts the nation into debt. Is Obama talking about ending the FED? Is Pelosi? Did Bush mention it? THEY DON'T CARE because they are part of the FED money junkies. They are in cahoots with the banks. America was duped in 1913.

In fact, the best way to assure a massive public debt and the accompanying erosion of monetary values through uncontrollable inflation is to charter and rely on a privately-owned and controlled central bank of issue like the Bank of England, the First and Second Banks of the United States, or the Federal Reserve of today. Once such a system is in place, the central government is so hamstrung by debt that is it unable to direct public expenditures into desirable socioeconomic channels and has surrendered its economic sovereignty to the financiers, which is precisely where we now stand.


[edit on 3-3-2010 by Zosynspiracy]

[edit on 3-3-2010 by Zosynspiracy]

reply to post by Frogs


I think we face a lot of financial crisis in our immediate future.

Retire? You can fuggetaboutit if the new Global Debt Time Bomb is detonated by any one of 20 made-in-America trigger mechanisms.

Yes, 20. And yes, any one can destroy your retirement because all 20 are inexorably linked, a house-of-cards, a circular firing squad destined to self-destruct, triggering the third great Wall Street meltdown of the 21st century, igniting the Great Depression II that George W. Bush, Ben Bernanke, Henry Paulson and now President Obama have simply delayed with their endless knee-jerk, debt-laden wars, stimulus bonanzas and bailouts.

www.marketwatch.com...

I guess if one don't get ya, the other ones will.

The US economy is getting worse. But it's like cancer growing inside of you. The symptoms dont usually appear until it is too late. Wallstreet is up etc. But we are dying economically. And the rich get richer. Kleptocracy is what we have in Washington.