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alstry (34.93)

The Whole Planet Melting Down????

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October 01, 2008 – Comments (3)

US 'casino' mentality blamed for planet's meltdown

By ALAN CLENDENNING, AP Business WriterTue Sep 30, 5:21 PM ET

Astounded by the U.S. government's failure to resolve the financial crisis threatening the foundations of the global free market, fingers of blame are pointing at America from around the planet.

Latin American leaders say the U.S. must quickly fix the financial crisis it created before the rest of the world's hard-won economic gains are lost.

"The managers of big business took huge risks out of greed," said President Oscar Arias of Costa Rica, whose economy is highly dependent on U.S. trade. "What happens in the United States will affect the entire world and, above all, small countries like ours."

In Europe, where some blame a phenomenon of "casino capitalism" that has become deeply engrained from New York to London to Moscow, there is more of a sense of shared responsibility. But Europeans also blame the U.S. government for letting things get out of hand.

Amid harsh criticism is a growing consensus that stricter financial regulation is needed to prevent unfettered capitalism from destroying economies around the globe.

And leaders of developing nations that kept spending tight and opened their economies in response to American demands are warning of other consequences — a loss of U.S. influence globally and the likelihood that the world's poor will suffer the most from greed by the biggest players in global finance.

"They spent the last three decades saying we needed to do our chores. They didn't," a grim-faced Brazilian President Luiz Inacio Lula da Silva said Tuesday.

Even staunch U.S. allies like Colombian President Alvaro Uribe blasted the world's most powerful country for egging on uncontrolled financial speculation that he compared to a wild horse with no reins.

"The whole world has financed the United States, and I believe that they have a reciprocal debt with the planet," he said.

http://news.yahoo.com/s/ap/lt_meltdown_pointing_fingers&printer=1;_ylt=AmNag64gFrQvyY1mth8HIxa9IxIF

So while you are trying to figure out which stock to pick....or what Jim Cramer's emotion is for the day and whether he took is leveling medication........something very unsettling is brewing around the world.

As a reward for our historical generosity and stability, the world made our currency the reserve currency and the foundation for the world's economic growth.  Capital flowed into America like an unending river.

Now, the world has loaned us trillions.....we needed those trillions to keep our interest rates low and economic engine running........and boy did it run.  As a matter of fact it is now overheated and many may be seeking a little payback as for the past eight years, whether you agree with the policies or not, this administration has made America as unpopular as it has ever been in history.

If the world starts pulling capital out of the U.S., and/or our currency devalues due to inflationary policies of our government.....pretty soon inflation will get out of control and few will be able to afford to buy much of anything.  You think I am kidding????  We are not heading on too different a path from post WWI Germany.......a period which gave rise to the a very dark period in German history.

My posts have taken on a more ominous tone lately....not because my positon has changed....but the mainstream media has come closer to my view which allows me to move a little closer to my real perspective.

This is very serious stuff folks.....it doesn't get much more serious....this is what our media and politicians should be discussing....the future of our nation is at stake.

3 Comments – Post Your Own

#1) On October 01, 2008 at 2:24 AM, lquadland10 (< 20) wrote:

So what is the Next Step?

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#2) On October 01, 2008 at 3:36 AM, pjani06 (28.97) wrote:

Agreed.

The article referencing so many voices & concerns from abroad connect directly to this video just put up recently tonight;

very imporant video. 

link to original post (minutes ago) HIDDEN within the text of the Bailout - FOREIGN bank bailout - an OUTRAGE for America

please watch. 

 

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#3) On October 01, 2008 at 3:48 AM, jester112358 (28.70) wrote:

On the other hand what are the alternatives for capital in times of fear?  Russia, China, Brazil, Japan etc.  I don't think I'd want very much of my wealth in any of those, especially with the lack of property rights, free elections, court systems, and even greater corruption than the US etc.  That's why there's $7.5T in US bank deposits, $2.7T in US bank deposits, and $5.7T in US treasuries.  In other words enough to buy all the outstanding mortgages of every citizen in the US with enough left over to pay down most the Fed debt!  That's rather staggering.  Further, over 40% of all homeowners (myself included) own their homes outright, and have significant amounts of liquid assets.  Unfortunately, a significant minority of americans have been on a huge shopping spree which now must end.  They must feel the pain or they will do it again.  Thus, no bailout.

Since capitalism has never really been tried in its pure form its hard to say this approach to alloting capital is flawed as some Europeans believe.  As the old saying goes,  "its the worst economic system in the world-except for all the rest".  The flaws stem from government interference in the forms of social engineering such as the creation of fanny and freddy to make home ownership possible for even those without the income and skills to support it.  The depression, for example, was made much worse by the government intervention which followed the 1929 crash.  I suspect you agree with this too.  Hopefully we won't let the government interfere in this mess and allow a natural contraction/deflation in assets to occur.

Thanks for the excellent thought-provoking posts.

 

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