President Bush on Saturday once again tried to reassure a nervous public that world leaders were working together to address what is unfolding as the worst global financial crisis since the Great Depression.Those measures will not take effect in time, and by the time they do take effect, they will be too late to do any good. The newest pointless rule proposal by the SEC? A three day ban on a short selling for any stock that drops by 20% in a day. That's like passing a leaf burning ban ordinance two weeks after a wildfire has burned down city hall."We recognize that the turmoil in the financial markets is affecting all our citizens," Bush said, standing in front of financial ministers from the world's top economies gathering in the nation's capital. "All of us recognize this is a serious global crisis that requires a serious global response for the good of our people."
The president did not announce any new actions to stem the financial panic gripping the world, but reiterated measures world leaders are taking to strengthen financial systems.
All signs are pointing straight down. Even Jim "Mad Money" Cramer is talking about the honest preparations for 1929 all over again. Six weeks ago of course Cramer said that the "rally is real" and that the WSJ's crazy article that said stock markets wouldn't recover until next year was "totally overblown" negativity. Now, Cramer is actually right about the same percentage of the time as a broken grandfather clock is at telling the time, but the damage is still done and more damage is coming as a result: the systemic, structural basis of the global economy is collapsing.
Idiots. All of them. I've been warning about this for nine months now. People a lot better at this then I am have been warning about this for several years now and some before that have been warning us since 2000 or so that our economy was untenable. Before Roubini there was Libertarian economist Gary North, who said this in 2002:
This is the threat the world faces today. Central banks are in control of money. They have addicted the whole world to massive debt, ever more complex. Any slowdown in the inflation of the money supply threatens the solvency of the entire economy. Ludwig von Mises warned against this ninety years ago, in his Theory of Money and Credit (1912). He warned that the government's refusal to call a halt to monetary inflation – its return to credit-money creation – would eventually destroy the currency. He called this the crack-up boom. In the meantime, we would get endless boom-bust cycles, he said. So we have.And as Gary North pointed out, Austrian Economist Ludwig von Mises warned the world of the problems of central banks and debt long before the Great Depression. He was ignored then. He was ignored for a very long time by most folks.Let me repeat the journalist's warning about buying shares of bankrupt firms: "Gambling involves much hope, little thought and leaves you with the irrepressible urge to repeat your mistakes." But what happens when bad accounting practices, complex debt, and endless monetary expansion persuade investors to buy what are in effect bankrupt companies – companies that are kept afloat only by new injections of bank credit money? The central bankers dare not stop the flow of money. And so the leverage game goes on and on. We are riding the tiger, a tiger of endless debt and capitalized future income streams: derivatives.
I honestly thought somebody was going to heed those warnings that had the power to DO something about it. Me, I just made the choice to not get a credit card...still the best choice I made in my life so far.
But it's all coming down around us now. The warnings were not heeded. The perfect storm of willful ignorance, greed, neglect, deregulation, credit addiction and global scale has turned this month into the end of an era.
George W. Hoover, the worst Preznitman the world has ever seen.
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