Flimsy Sanity: Mike Whitney: Black Monday?

Flimsy Sanity

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. - Friedrich Nietzsche

Wednesday, October 01, 2008

Mike Whitney: Black Monday?

Mike Whitney: Black Monday?: "Indeed, the $700 billion is just part of a massive 'pump and dump' scheme engineered with the tacit approval of the US Treasury and the Federal Reserve. Once the banksters have offloaded their fraudulent securities and crappy paper on Uncle Sam, they will do whatever they need to do pad the bottom line and drive their stocks up. That means they will shovel capital into hard assets, foreign currencies, gold, interest rate swaps, carry trade swindles, and Swiss bank accounts. The notion that they will recapitalize so they can provide loans to US consumers and businesses in a slumping economy is a pipedream.

The US is headed into its worst recession in 60 years. The housing market is crashing, securitzation is kaput, and the broader economy is drifting towards the reef. The banks are not going to waste their time trying to revive a moribund US market where consumers and businesses are already tapped out. No way; it's on to greener pastures. They'll move their capital wherever they think they can maximize their profits. In fact, a sizable portion of the $700 billion will likely be invested in commodities, which means that we'll see another round of hyperbolic speculation in food and energy futures pushing food and fuel prices into the stratosphere. Ironically, the taxpayers’ largesse will be used against them, making a bad situation even worse."

2 Comments:

  • At 10:43 AM, Anonymous R J Adams said…

    The problem is no-one - anywhere - knows the answer to this one, which is why there are such conflicting opinions. Or, maybe there is someone, somewhere, who knows the answer, but they don't want us to know it.

     
  • At 11:30 AM, Blogger Nader Enthusiast said…

    RJ: Or there is Ralph. He would put the money into work projects and let it percolate up - trickle down is for piss.

     

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