Posted on 09/20/2007 4:55:46 PM PDT by NYer
"According to some US experts, some US$ 20 trillion in worthless securities exist, putting US and European banks are at risk. Asia should avoid the worse. A new North American currency, the Amero, is making news.">
According to US financial analyst Mike Whitney[1], a mountain of unfunded, unregulated paper worth more than US$ 20 trillion might be out there [2]. Apparently, no one, neither the general public nor professionals on Wall Street, has yet to realise the extent of the hole, a hole of 20 trillion dollars with no market, nor value.
Even if the Federal Reserve were to ease bank reserve and capital requirements, the existing financial system would still be moving towards its worst crisis in 80 years because the problem is not liquidity, but solvency. The situation is such that banks are even scared to lend to one another uncertain about each other’s solvency. Even the London interbank market is not going beyond day to day lending.
Greenspan and speculative financing
The problem arose in the United States where, starting in 1987, the bank lobby—by means of US$ 300 million in contributions—got Congress to do away with the Glass-Steagall Act (officially the Banking Act of 1933) that had been adopted in the wake of the 1929 Wall Street Crisis. President Bill Clinton signed into law the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act.
The original law had been introduced to avoid conflicts of interests between banks and companies that sell stocks and bonds.
Former Federal Reserve Chairman Alan Greenspan was the main proponent of financial liberalisation. Before his appointment to the post, he had served as a corporate director for J.P. Morgan, the first bank to take advantage of liberalisation.
Under his 18-year chairmanship he oversaw the greatest expansion of speculative financing in world history. But now the chicken are coming home to roost like a would-be train wreck that no one can stop, not even the Fed.
If Mike Whitney’s numbers are right, we are on the verge of a meltdown like that of 1929-1930, perhaps worse because of the world’s greater economic interconnectedness.
Lately, the big US financial and banking groups have tried to protect themselves by selling their junk bonds in Europe and Asia.
In Asia equity in most banking and financial institutions is in US securities and US dollar denominations. Most banks are ranked AA or even AAA by so-called independent agencies like Standard & Poors, Moody’s and Fitch. Securities with such ratings are, or perhaps we should say, were considered virtually risk-free.
Theoretically, US pension funds, insurance companies and big foundations are exposed to the uncontrolled offer of atypical securities of the past decades; so should the US financial and banking institutions which created them.
Yet we should not be surprised if those who hold the keys to the corporate are not, nor will ever be, held accountable for their wrongdoing.
Central banks, especially the Federal Reserve, are at the root of the problem because they have known about the overall situation for quite some time. But whomever is in charge of the Fed knows that a solution cannot be had from within.
Amero, North America’s new currency
With a bank crisis looming on the horizon, an odd piece of information is becoming news. As unlikely as it may seem, the United States along with Canada and Mexico, appears to be getting ready to launch a new single currency: the Amero.
With the monetary bubble on the verge of bursting, one solution would be getting rid of the dollar, replaced by a currency, the Amero, to serve a would-be North American Union.
In addition to the United States, Mexico should join such a union and in principle might be even in favour of it. Canada, too, might join, setting aside its aversion to losing its monetary sovereignty, out of concern that its equity in US dollars might simply lose its value.
When US President George W. Bush met then Mexican President Vicente Fox and then Canadian Prime Minister Paul Martin in Waco, Texas, in March 2005, they discussed a North American union.
The idea resurfaced the same year in a report released by the powerful US Council on Foreign Relations, a group that has influenced most US presidents, both Democrat and Republican, and a tri-national task force involving ministerial-level officials.
Wikipedia already sports a page dedicated to the Amero with the photos of prototypes.
A news report on the Amero broadcast on CNBC is also available on Youtube [3].
Similarly, 20 Amero coins can be seen on the Hal Turner Show webpage, with a small D visible, D as in ‘minted in Denver.’ Curiously, the Denver Mint is currently closed to the public, ostensibly for restoration work, till September 28 [4].
Whilst AsiaNews is unable to determine whether there is any basis to such claims, it does seem certain that a plan for a North American union is being developed [5].
Such an entity would have a population almost the size of the European Union, and could adequately respond to the current bank crisis that is bound to end up in a monetary crisis.
However, far from being a simple monetary union, the operation is likely to mean a de facto US annexation of the rest of North America.
For Asia the real point of interest would be economic rather than political since the Americas have been the United States’ backyard for a long time.
Firstly, the Amero would be definitely weaker than the US dollar because it would include the Mexican pesos, which was insolvent not so long ago.
A weaker North American common currency would quickly push the value of the currencies of China and the whole of Asia, which have hitherto been reluctant to do so.
Secondly, converting dollars used outside the United States would raise problems since in Asia as well as in many countries around the world payments in dollars are more common than one might think. In this case the impact of a North American union would also be very significant.
I’d say it’s one of the most important questions we face. Funny thing, I actually remember this topic about 15 years ago...and well...here we are! And the question still exists, only it’s “now” and not “some other generations problem”.
I won’t go there on this thread.
http://www.defenselink.mil/africom/
Things are happening with it, but the MSM is largely ignoring its progress. It ABSOLUTELY is related to trade...so I’m technically not off-topic (lol)
2005 Incomes, on Average, Still Below 2000 Peak
DAVID CAY JOHNSTON | August 21, 2007
Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion, new government data shows.While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1 percent less than the $55,714 in 2000, after adjusting for inflation, analysis of new tax statistics show.
...Nearly half of Americans reported incomes of less than $30,000, and two-thirds make less than $50,000.
I know nothing about that....I’ll have to peruse that site. Thanks for the link.
I agree, but the government spinmeisters don't want anyone to look at the man behind the curtain.
You can find some news from the past few days...just not at their web-site (lol). Go figure.
That goes back to the one thread a while back where asked if the status quo didn’t change, would we make it, and I said ‘not a chance’. Knowledge is powerful, it...at times can be disappointing. I see most waking up after the storm unfortunately.
“I agree, but the government spinmeisters don’t want anyone to look at the man behind the curtain.”
Funny thing too, cause my best estimate is most of them don’t know what’s behind the curtain themselves. Their too close to the trees.
Thanks.
And still there are yet too many who are still asleep, in denial, or outright denying what is going on.
I was reminded of this on the radio today:
The intellectual core of the human race came together here during and after WW II. That core's descendants are still here, although who knows for how long. Asians have gotten rich copying American technology, but they have been unable to produce any breakthroughs on their own. A good example of this is the clown show that was China's missle program until Bill Clinton sold our guidance technology to them for campaign cash for the '96 election.
Isn’t that a good quote. I like this one...don’t know who came up with it, but it’s good.
“Sometimes the majority just means all the fools are on the same side.”
True, and true.
(we can be thankful to Clinton for soooo many things, can't we?)
That, sir, is why we have a republic. If we can keep it.
Note that the question still exists...
Let us be thankful for the fools; but for them the rest of us could not succeed. ~ Mark Twain
Wise men talk because they have something to say; fools talk because they have to say something. ~ Plato
“If we can keep it.”
And that’s the clause that’s concerning at times.
Yes...it does.
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