Day of reckoning; America’s economic meltdown

[donsu]

http://onlinejournal.com/artman/publish/article_1183.shtml



There’s growing concern among economists and market-savvy pundits that the global financial system is hanging by a few well-worn threads that could snap at any time.

The $10.4 trillion real estate “bubble” has attracted the most attention, but the shaky derivatives market, hedge funds, and falling dollar are equally worrisome. Twenty years of deregulation has created an economic monster which is increasingly unmanageable and threatens to bring down the whole system in a heap.

As Gabriel Kolko said in a recent CounterPunch article (“Why a Global Economic Deluge Looms”), “The entire global financial structure is becoming uncontrollable in crucial ways its nominal leaders never expected. Instability is increasingly its hallmark. . . . Contradictions now wrack the world’s financial system, and if we are to believe the institutions and personalities who have been in the forefront of the defense of capitalism, it may very well be on the verge of serious crisis.”

-snip-

Greenspan and the privately-owned Fed played a major role in putting us in this mess by rubber-stamping the new system of precarious loans (no down payments, interest-only loans, ARMs) and perpetuating their “cheap money” policies. Greenspan admitted this a few months ago when he said that current housing increases were “unsustainable” and would have corrected long ago if not for the “the dramatic increase in the prevalence of interest-only loans . . . and more exotic forms of adjustable rate mortgages that enable marginally-qualified, highly leveraged borrowers to purchase homes at inflated prices.”

Greenspan’s circuitous comments are tantamount to an admission of guilt. The fallout from the Fed’s policies are bound to be widespread and devastating. The country has been buoyed along on $10 trillion of borrowed money which has created the unfortunate sense of prosperity, which is not reflected in the general economy. The increase in housing prices has not come from wages (which have actually decreased under Bush) or from demand (inventory is now at a 10-year high). It has merely been the availability of low interest loans and the promise of getting rich quick. As the market cools, millions of Americans will either face foreclosure or be shackled to a mortgage that is higher than the dwindling value of their homes. It is a grim picture of 21st century debt-slavery.

-snip-

From the cratering hedge funds, to the faltering dollar, to the fizzling housing bubble, western-style capitalism is in the advanced stages of collapse. Deregulation and liberalization have only hastened its decline.

The mighty locomotive of global growth is slowly grinding to a standstill, bogged down by the accumulated weight of it own inconsistencies and inequities. Change is coming, for good or bad.
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put global warming on top of all of that - blam!

[stepnw1f]

1. So Bush and the Neo-Fascists Destroy our Government Infrasture

just in time.... I believe they want us all to die off when the shit hits the fan. Just look at the way they responded to Katrina.

[donsu]

2. yes, they don't care about amer. workers because their corps can

get slave workers anywhere in the world.

[darkmaestro019]

3. those Breakers have been at the Beams for much too long eom