HEADS, UP !!!
Let's be frank, The EU ( European Union ) is the economic step-child of NATO ( North Atlantic Treaty Organization ), the U.S. concoction of nations aligned against the then U.S.S.R.. NATO is nothing short of political arbitrage, with the U.S. at the helm; the EU is an economic derivative without direct U.S. control, spawned from the 12 protocols of the Treaty of Rome, 1957. A neat idea at the time, 1957, and for a short time thereafter while then participant nations, lead by Germany, were experiencing unprecedented economic growth. The focus was on economic growth experienced by the core nations: Germany, France and Italy; Germany doing the heavy lifting. Things were humming along when U.S. Financial Institutions, the pied-pipers of greed, lead the world into a financial depression. The U.S. lead depression exposed the weakness and flaws of the Euro and left the 17 Euro subscriber states to flounder.
Greece was the tip of the iceberg engendering chatter from the ECB ( European Central Bank ) resulting in leveraged support for European Banks holding sovereign debt, in short the bail-out of Greece. Portugal, Spain and Italy are on the short list, and next in line. Forget the economic pundits, media pundits and the like, simple population demographics reveals the fundamental flaw when 17 EU /Euro nations with disparate populations and productivity, subscribe to a single currency, the Euro.
Aside from the gibberish of economists and bankers, it all boils down to population and demographics: how many working German's will be willing to support the life styles of 130 + million people in the non-productive nations of Greece, Portugal, Spain, Italy + 11 other Euro subscribers like Ireland. Perhaps it's to early to include Italy, but things are not well in Italy. So take Greece, Portugal and Spain with combined populations of around 70 million and compare it with the population of Germany 82 million, 26% under 18 and 21% who are over 65, leaving an estimated workforce of 44 million minus 5.7% unemployment or 41.5 million working German's to carry the load and support the lifestyles of 70 million Greek, Portuguese and Spanish, with 61 million Italians soon to follow. Okay, France, with an estimated workforce of 30 million but 10% unemployment, 27 mil net [ 72% of the French workforce is in Services, i.e., non-industrial ], may be of some help, but neither Germany or France can sustain the burden of 15 failing member state economies. Just how many people can one working man or woman [ mainly German ] carry on their shoulders: two (2), three (3), four (4); say goodbye to the Euro.
Showing posts with label banks. Show all posts
Showing posts with label banks. Show all posts
Saturday, April 21, 2012
Tuesday, February 17, 2009
United States the Pied Piper of Financial Doom
by http://socrates911.blogspot.com
The world is aware that the United States suffered a depression in the 1930's which resulted in a number of Congressional regulatory acts [ Glass-Steagall Act of 1933 included ], complimenting existing Anti-Trust laws, and designed to prevent a future financial collapse in the U.S.A.
Full implementation of these regulatory acts occurred after WWII, and provided a basis of stability for U.S. banks and financial institutions. As banks, financial institutions and corporations gained political influence over Washington, the regulators became, under political pressure from both Democrats and Republicans, lax in the enforcement of these 1890-1936 laws. Beginning with the Reagan administration, there was increased pressure to " deregulate ". Laws that allowed the U.S. to become the Pied Piper of the world, financial world in particular, were increasingly modified or repealed during the ensuing years 1960-2005. The U.S. enjoyed economic prosperity previously unknown in the world, enticing foreign governments, banks, financial institutions and investors to " buy in " and finance the "AMERICAN DREAM " by purchasing financial contrivances dreamed-up by Wall Street, and continuing to buy U.S. Government, Treasury issues.
The lesson learned, follow the U.S. Pied Piper and you will be doomed.
Unless and until the U.S. re-enacts bank and financial regulatory legislation created in the 1930's and strictly enforces the Sherman and Clayton Anti-Trust Acts preventing mergers, the U.S., regardless of any "stimulus" Washington conjures up, will not be able to pull itself out of the depression it now faces. The rest of the world and particularly the remaining members of the G8 ( minus the U.S. = G7 ) need to develop compacts independent of the U.S. The U.S. is no longer the leader and has little to offer other nations except to buy U.S. debt so that the U.S. can purse its narcissistic interests and military objectives.
What the U.S. needs to do, but does not have the Congressional will to do, is to “man-up” to the fact that it alone has lead fellow G8 nations and other less fortunate nations, to the brink of financial collapse. The U.S. needs to co-ordinate its Anti-Trust laws, bank, financial and insurance regulations and regulatory agencies with those of other G8 nations. Agree on central bank borrowing rates that are within 1/2 % of rates established by other G8 Central banks, agree on a universal retail interest cap at 12% simple interest, and restrict the sale, assignment, transfer of stock and financial instruments, including commodity contracts, requiring, among other things, that stocks, bonds, warrants and the like must be held for a period of not less then 13 months. One of the main, but little discussed components, of the global financial mess the U.S. has created, was and is market volatility. Mechanisms to stabilize global financial markets will be necessary before there can be any true recovery. The U.S. “stimulus” is inward looking, and makes no provision for new and required stability and regulatory mechanisms; the caveat to the rest of the G8 club, and other nations, is to look else ware for leadership.
The world is aware that the United States suffered a depression in the 1930's which resulted in a number of Congressional regulatory acts [ Glass-Steagall Act of 1933 included ], complimenting existing Anti-Trust laws, and designed to prevent a future financial collapse in the U.S.A.
Full implementation of these regulatory acts occurred after WWII, and provided a basis of stability for U.S. banks and financial institutions. As banks, financial institutions and corporations gained political influence over Washington, the regulators became, under political pressure from both Democrats and Republicans, lax in the enforcement of these 1890-1936 laws. Beginning with the Reagan administration, there was increased pressure to " deregulate ". Laws that allowed the U.S. to become the Pied Piper of the world, financial world in particular, were increasingly modified or repealed during the ensuing years 1960-2005. The U.S. enjoyed economic prosperity previously unknown in the world, enticing foreign governments, banks, financial institutions and investors to " buy in " and finance the "AMERICAN DREAM " by purchasing financial contrivances dreamed-up by Wall Street, and continuing to buy U.S. Government, Treasury issues.
The lesson learned, follow the U.S. Pied Piper and you will be doomed.
Unless and until the U.S. re-enacts bank and financial regulatory legislation created in the 1930's and strictly enforces the Sherman and Clayton Anti-Trust Acts preventing mergers, the U.S., regardless of any "stimulus" Washington conjures up, will not be able to pull itself out of the depression it now faces. The rest of the world and particularly the remaining members of the G8 ( minus the U.S. = G7 ) need to develop compacts independent of the U.S. The U.S. is no longer the leader and has little to offer other nations except to buy U.S. debt so that the U.S. can purse its narcissistic interests and military objectives.
What the U.S. needs to do, but does not have the Congressional will to do, is to “man-up” to the fact that it alone has lead fellow G8 nations and other less fortunate nations, to the brink of financial collapse. The U.S. needs to co-ordinate its Anti-Trust laws, bank, financial and insurance regulations and regulatory agencies with those of other G8 nations. Agree on central bank borrowing rates that are within 1/2 % of rates established by other G8 Central banks, agree on a universal retail interest cap at 12% simple interest, and restrict the sale, assignment, transfer of stock and financial instruments, including commodity contracts, requiring, among other things, that stocks, bonds, warrants and the like must be held for a period of not less then 13 months. One of the main, but little discussed components, of the global financial mess the U.S. has created, was and is market volatility. Mechanisms to stabilize global financial markets will be necessary before there can be any true recovery. The U.S. “stimulus” is inward looking, and makes no provision for new and required stability and regulatory mechanisms; the caveat to the rest of the G8 club, and other nations, is to look else ware for leadership.
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