Bankers Fear World Economic Meltdown

[rman]

Bankers Fear World Economic Meltdown
By GABRIEL KOLKO
July 26, 2006
Counterpunch
http://www.counterpunch.org/kolko07262006.html

On June 15 we published Gabriel Kolko's essay on the enormous instability of the world financial system. In the ensuing weeks Professor Kolko has enlarged his analysis, and here we offer our readers his updated version. AC / JSC

There has been a profound and fundamental change in the world economy over the past decade. The very triumph of financial liberalization and deregulation, one of the keystones of the Washington consensus that the U.S. government, International Monetary Fund (IMF), and World Bank have persistently and successfully attempted over the past decades to implement, have also produced a deepening crisis that its advocates scarcely expected.

The global financial structure is today far less transparent than ever. There are many fewer reporting demands imposed on those who operate in it. Financial adventurers are constantly creating new products that defy both nation-states and international banks. The IMFs managing director, Rodrigo de Rato, at the end of May 2006 deplored these new risks risks that the weakness of the U.S. dollar and its mounting trade deficits have magnified greatly.

De Ratos fears reflect the fact that the IMF has been undergoing both structural and intellectual crises. Structurally, its outstanding credit and loans have declined dramatically since 2003, from over $70 billion to a little over $20 billion today, doubling its available resources and leaving it with far less leverage over the economic policies of developing nations and even a smaller income than its expensive operations require. It is now in deficit. A large part of its problems is due to the doubling in world prices for all commodities since 2003 especially petroleum, copper, silver, zinc, nickel, and the like that the developing nations traditionally export.

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June 15, 2006
"The Demons of Greed are Loose"
Why a Global Economic Deluge Looms
By GABRIEL KOLKO
http://www.counterpunch.org/kolko06152006.html

[Double T]

1. The real financial conditions of the world will be known.......

along with the truth about the 'fantastically phony' bush economy, once his term ends and he leaves office. The countries financial books have been scammed and we will ALL feel the pain.

[ProfessorGAC]

2. No They're Not

The bankers are not worried at all. This is hyperbole. The big banks are bullet-proof and the small banks have no control and they know it, so they don't sweat it.

I'm on the BoD of a small bank, and i can tell you that the conversation about the overall stability of the world monetary system NEVER becomes a variable in any planning or idea generation. Not at all.

And, the big boys couldn't care less.
The Professor