Posted in nebulous rants
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Often times, the news in other areas of the world is focused much differently than it is in America. In fact, much of the time, if you were looking at a European TV world news show at the same time as an American world news show, you'd swear you were looking at the news of 2 different days. We notice that phenomenon even on Cable international news channels (much too few and far between) viewed right here on the hill. Three or four years ago, we spent a couple of weeks in Germany and bird flu was all over their TV news; strangely, it was at least another year or so before we really started hearing about it in the states. Now that was creepy. Today, you will hear on all the US news outlets that the Dow is all over the place and that mortgage rates are climbing because of failed loans. You will hear that the Federal Reserve Bank injected billions and billions of dollars into the market to insure its ongoing liquidity. The money did its job in slowing down the decline, and thank goodness the markets are closed for the weekend. But you don't hear a lot about the global markets and their parallel slide on our news. The European Central Bank took the same approach of injecting cash into their markets. Same with the Bank of Japan. Not that this is the first time the federal/central banks have had to do this, but the times are few and far between. What is much more worrisome to me is the news that a very major German bank closed down yesterday for some 2 hours. A press release LATER said that the shut-down was to discuss the banking crisis. Now I'm not much of a conspiracy theorist, but people don't usually go around shutting their banks down for mere discussions. The fear is that the bank is near to collapse, and, according to one source (click on the "closed down" link), a "Westdeutsches Landesbank failure would have collapsed the entire global financial system." It's amazing how linked the prosperity of banks around the globe really is. Most sources maintain that the crisis has been caused by subprime lending practices of American banks and the instability spread worldwide from there. Banks aren't as willing to lend to one another, at this point. A Reuters story included a chilling quote from a fund manager in Singapore named Moe(!): "There's a variety of scenarios you can envision, all the way from it being a relatively contained phenomenon to something which has much broader implications that cause the world to collapse like a deck of cards," he said. I imagine that we'll recover, and time (financially speaking) will march on. But somewhere in this story, there should be a cautionary note or two -- perhaps a refrain: the evils of subprime lending would be one message to be sure; but what about the line of dominoes that the global financial system has become? This time, we were ourselves the catalysts for near-disaster -- quite by accident. As a nation, we are, in varying degrees of comfort, also lying in bed financially with countries who may CHOOSE to tear down our markets as a new type of warfare. If we can come within spitting distance of collapse by mistake, imagine what can be done by a malicious nation on purpose. I hope that the "powers that be" are listening to that refrain. If you are interested in studying up a little on the Gold Standard, US Reserve Notes, Federal debt, and the decline of manufacturing in the US, click here for an excellent (albeit old) article entitled "The US is in Deep Doodoo." |
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