Category Archives: global financial crisis

There is No Recovery – America Headed Towards a Revolution

Celente: Revolution next for U.S.

Gerald Celente – the most trusted name in trends – sits down for an exclusive interview with RT’s Anastasia Churkina to talk about what the future holds for America during and after the Great Recession, gives advice to Obama, and forecasts the unexpected.

Arising From the Ashes of the Financial Collapse – a New World Order

Bush Sr. on a New World Order

* * *

A year after financial crisis, a new world order emerges

One year after the near collapse of the global financial system, this much is clear: The financial world as we knew it is over, and something new is rising from its ashes.

Historians will look to September 2008 as a watershed for the U.S. economy.

On Sept. 7 , the government seized mortgage titans Fannie Mae and Freddie Mac . Eight days later, investment bank Lehman Brothers filed for bankruptcy, sparking a global financial panic that threatened to topple blue-chip financial institutions around the world. In the several months that followed, governments from Washington to Beijing responded with unprecedented intervention into financial markets and across their economies, seeking to stop the wreckage and stem the damage.

One year later, the easy-money system that financed the boom era from the 1980s until a year ago is smashed. Once-ravenous U.S. consumers are saving money and paying down debt. Banks are building reserves and hoarding cash. And governments are fashioning a new global financial order.

Congress and the Obama administration have lost faith in self-regulated markets. Together, they’re writing the most sweeping new regulations over finance since the Great Depression. And in this ever-more-connected global economy, Washington is working with its partners through the G-20 group of nations to develop worldwide rules to govern finance.

“Our objective is to design an economic framework where we’re going to have a more balanced pattern of growth globally, less reliant on a buildup of unsustainable borrowing . . . and not just here, but around the world,” said Treasury Secretary Timothy Geithner . Full Story

World Wants to Divorce Itself From U.S. Dollar

“US is on the slippery slope to economic collapse”

The Demise of the Dollar

UN dollar to replace US dollar?

UN Says New Currency Is Needed to Fix Broken ‘Confidence Game’

The dollar’s role in international trade should be reduced by establishing a new currency to protect emerging markets from the “confidence game” of financial speculation, the United Nations said.

UN countries should agree on the creation of a global reserve bank to issue the currency and to monitor the national exchange rates of its members, the Geneva-based UN Conference on Trade and Development said today in a report.

China, India, Brazil and Russia this year called for a replacement to the dollar as the main reserve currency after the financial crisis sparked by the collapse of the U.S. mortgage market led to the worst global recession since World War II. China, the world’s largest holder of dollar reserves, said a supranational currency such as the International Monetary Fund’s special drawing rights, or SDRs, may add stability.

“There’s a much better chance of achieving a stable pattern of exchange rates in a multilaterally-agreed framework for exchange-rate management,” Heiner Flassbeck, co-author of the report and a UNCTAD director, said in an interview from Geneva. “An initiative equivalent to Bretton Woods or the European Monetary System is needed.”

The 1944 Bretton Woods agreement created the modern global economic system and institutions including the IMF and World Bank.

Enhanced SDRs

While it would be desirable to strengthen SDRs, a unit of account based on a basket of currencies, it wouldn’t be enough to aid emerging markets most in need of liquidity, said Flassbeck, a former German deputy finance minister who worked in 1997-1998 with then U.S. Deputy Treasury Secretary Lawrence Summers to contain the Asian financial crisis.

Emerging-market countries are underrepresented at the IMF, hindering the effectiveness of enhanced SDR allocations, the UN said. An organization should be created to manage real exchange rates between countries measured by purchasing power and adjusted to inflation differentials and development levels, it said.

“The most important lesson of the global crisis is that financial markets don’t get prices right,” Flassbeck said. “Governments are being tempted by the resulting confidence game catering to financial-market participants who have shown they’re inept at assessing risk.”

The 45-year-old UN group, run by former World Trade Organization chief Supachai Panitchpakdi, “promotes integration of developing countries in the world economy,” according to its Web site. Emerging-market nations should consider restricting capital mobility until a new system is in place, the group said.

The world body began issuing warnings in 2006 about financial imbalances leading to a global recession.

The Dollar Collapses

Max Keiser: Goldman Sachs More Dangerous than bin Laden

Part One
Max Keiser takes offense to Goldman Sachs story

Part Two
Max Keiser takes offense to Goldman Sachs oligarchy

Obama Sees Light at end of Tunnel in a Shrinking Economy

Obama Says “pointed in the Right Direction”

* * *

US food stamp list tops 34 million for first time

For the first time, more than 34 million Americans received food stamps, which help poor people buy groceries, government figures said on Thursday, a sign of the longest and one of the deepest recessions since the Great Depression

Enrollment surged by 2 percent to reach a record 34.4 million people, or one in nine Americans, in May, the latest month for which figures are available.

It was the sixth month in a row that enrollment set a record. Every state recorded a gain in participation from April. Florida had the largest increase at 4.2 percent.

Food stamp enrollment is highest during times of economic stress. The U.S. unemployment rate of 9.5 percent is the highest in 26 years.

Average benefit was $133.65 in May per person. The economic stimulus package enacted earlier this year included a temporary increase in food stamp benefits of $80 a month for a family of four. Full Story

* * *

Demand At Food Banks Up, Even In Well-Off D.C. Suburbs

Mezmure Dawit, 22, showed up at the food bank in Fairfax, Va., looking for help. He said he’d lost his job as a maintenance man at an apartment building last month and he needed food for his 14-year-old brother and 18-year-old sister.

He said their father had left them five months ago. “He just left. No money, nothing,” said Dawit, wearing crisp blue jeans and a striped shirt. “It’s been hard, man.”

As the national unemployment rate nears 10 percent, more and more people are turning to food banks for help keeping food on their plates. Feeding America, the nation’s largest domestic hunger-relief charity, reports that demand at food banks across the United States is up 30 percent from last year.

Feeding America spokeswoman Maura Daly told the Huffington Post that as recently as May of last year, 90 percent of Feeding America’s clients cited food and fuel costs as their reasons for needing assistance. By December 90 percent were citing unemployment as the primary reason. Full Story

* * *

U.S. Recession Worst Since Great Depression, Revised Data Show

The first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.

The world’s largest economy contracted 1.9 percent from the fourth quarter of 2007 to the last three months of 2008, compared with the 0.8 percent drop previously on the books, the Commerce Department said yesterday in Washington. Gross domestic product has shrunk 3.9 percent in the past year, the report said, indicating the worst slump since the Great Depression.

Updated statistics also showed that Americans earned more over the last 10 years and socked away a larger share of that cash in savings. The report signals the process of repairing tattered balance sheets following the biggest drop in household wealth on record may be further along than anticipated.

“The current downturn beginning in 2008 is more pronounced,” Steven Landefeld, director of the Commerce Department’s Bureau of Economic Analysis, said in a press briefing this week. The revisions were in line with past experience in which initial figures tended to underestimate the severity of contractions during their early stages, he said.

Obamageddon – Unprecedented Schemes & Scams

Gerald Celente Obamageddon

Hastening the Bankruptcy of the US Financial-Military World Order

Washington is unable to call all the shots

dollar

Keen observers of America, if not effective managers of their own economies, these countries argue that the root of the global financial crisis is that the US makes too little and spends too much.

Challenging the American empire will be the focus of meetings in Yekaterinburg, Russia, today and tomorrow for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other leaders of the six-nation Shanghai Co-operation Organisation. The alliance comprises Russia, China, Kazakhstan, Tajiki-stan, Kyrgyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia.

The attendees (who will be joined on Tuesday by Brazil for trade discussions) have assured American diplomats that dismantling the US financial and military hegemony is not their aim. They simply want to discuss mutual aid – but in a way that has no role for the US or for the dollar as a vehicle for trade among these countries.

The meeting is an opportunity for China, Russia and India to “build an increasingly multipolar world order”, as Mr Medvedev put it in a St Petersburg speech this month. What he meant was this: we have reached our limit in subsidising the US military encirclement of Eurasia while also allowing the US to appropriate our exports, companies and real estate in exchange for paper money of questionable worth.

An “artificially maintained unipolar system”, Mr Medvedev said, was based on “one big centre of consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve currency, and one dominant system of assessing assets and risks”. Full Story

Over One Billion Starving People – Who Are the Culprits?

U.N. warns of catastrophe as hungry people top one billion

hunger

High food prices have pushed another 105 million people into hunger in the first half of 2009, the head of the U.N. World Food Programme said on Friday, raising the total number of hungry people to over 1 billion.

Urging rich nations at a meeting of G8 development ministers not to cut back on aid, Josette Sheeran said the world faced a human catastrophe as more people struggle to eat a decent meal.

“This year we are clocking in on average four million new hungry people a week, urgently hungry,” Sheeran told Reuters.

“For the first six months of this year, 105 million people have been added,” she said, citing figures to be released by the U.N. Food and Agriculture Organization next week that will raise the total number of undernourished people to over 1 billion.

In 2008, FAO said the world’s hungry numbered 963 million.

The WFP needs $6.4 billion this year for food aid, but donors’ contributions have fallen way behind that level — it had around $1.5 billion at the end of last week.

The agency says it has had to cut food aid rations and shut some operations in eastern Africa and North Korea because of the credit crunch.

“I know it seems a big figure, but if you compare it with the global stimulus package, it means that for less than 1 percent of that we could help meet the urgent human crisis that is unfolding, and that is just as essential to the stability of the world,” Sheeran said.

She said despite a decline in most food prices from record peaks last year, they remained high in developing countries, while global food aid was at a 20-year low.

The financial crisis has made things worse, and in terms of staple food, people in poorer countries today can only afford about a third of what they could afford three years ago. Full Story

* * *

HungerSite.com

HungerSite.com

* * *

Experts: Obama biofuel policy boosts world hunger

The Obama administration’s policy of producing ethanol as a renewable fuel substitute for gasoline will add to the number of people in Third World countries who are chronically hungry, according to energy experts.

The administration’s mandates for the use of ethanol are “immoral,” asserts Robert Bryce, managing editor of the monthly industry magazine Energy Tribune.

“We are burning food to make motor fuel at a time when there’s a growing global shortage of food and no shortage of motor fuel,” Bryce told WND.

“The corn ethanol scam is not an energy program,” he continued. “It is a massive farm subsidy program masquerading as an energy program.”

The U.S. Department of Energy did not respond to a WND request for comment on this story.

A controversial report released earlier this month by the Congressional Budget Office, or CBO, said the increasing demand for corn to produce ethanol contributed between 10 to 15 percent of the overall 5.1 percent increase in the price of food from April 2007 to April 2008, as measured by the Consumer Price Index. Full Story

* * *

How the World Bank, IMF and WTO destroyed African agriculture

Biofuel production is certainly one of the culprits in the current global food crisis. But while the diversion of corn from food to biofuel feedstock has been a factor in food prices shooting up, the more primordial problem has been the conversion of economies that are largely food-self-sufficient into chronic food importers. Here the World Bank, International Monetary Fund (IMF), and the World Trade Organization (WTO) figure as much more important villains.

Whether in Latin America, Asia, or Africa, the story has been the same: the destabilization of peasant producers by a one-two punch of IMF-World Bank structural adjustment programs that gutted government investment in the countryside followed by the massive influx of subsidized U.S. and European Union agricultural imports after the WTO’s Agreement on Agriculture pried open markets. .

African agriculture is a case study of how doctrinaire economics serving corporate interests can destroy a whole continent’s productive base. Full Story

‘The Impoverishment of Many to Satisfy the Greed of a Few’

Amnesty International Report 2009

IT’S NOT JUST THE ECONOMY, IT’S A HUMAN RIGHTS CRISIS

In September 2008 I was in New York to attend the UN high-level meeting on the Millennium Development Goals (MDGs), the internationally agreed targets to reduce poverty by 2015. Delegate after delegate talked about the need for more funds to eradicate hunger, to cut preventable deaths of infants and pregnant women, to provide clean water and sanitation, to educate girls. The life and dignity of billions of people were at stake, but there was only limited will to back up the talk with money. As I left the UN building I could see the ticker tapes running a very different story coming from another part of Manhattan: the crash of one of the largest investment banks on Wall Street. It was a telling sign of where world attention and resources were really focused. Rich and powerful governments were suddenly able to find many more times the sums that could not be found to stem poverty. They poured them with abundance into failing banks and stimulus packages for economies that had been allowed to run amok for years and were now running aground.

By the end of 2008, it was clear that our two-tier world of deprivation and gluttony – the impoverishment of many to satisfy the greed of a few – was collapsing into a deep hole.

As with the case of climate change, so too with global economic recession: the rich are responsible for most of the damaging action, but it is the poor who suffer the worst consequences. While no one is being spared the sharp bite of the recession, the woes of the rich countries are nothing compared with the disasters unfolding in poorer ones. From migrant workers in China to miners in Katanga in the Democratic Republic of the Congo (DRC), people desperately trying to drag themselves out of poverty are feeling the brunt sharply. The World Bank has predicted 53 million more people will be thrown into poverty this year, on top of the 150 million hit by the food crisis last year, wiping out the gains of the last decade. International Labour Organization figures suggest that between 18 and 51 million people could lose their jobs. Skyrocketing food prices are leading to more hunger and disease, forced evictions and foreclosures to more homelessness and destitution.

“The world needs a different kind of leadership, a different kind of politics as well as economics – something that works for all and not just for a favoured few.”

While it is too early to predict the full impact on human rights of the profligacy of recent years, it is clear that the human rights costs and consequences of the economic crisis will cast long shadows. It is also clear that not only have governments abdicated economic and financial regulation to market forces, they have failed abysmally to protect human rights, lives and livelihoods.

Billions of people are suffering from insecurity, injustice and indignity. This is a human rights crisis. Full Story