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Posts Tagged ‘Banks’

Mathematically Perfected Economics: Predicted World Monetary Collapse by 2010.

January 11th, 2009 No comments

From perfecteconomy.com:

But by simply calculating periodic interest as any bank statement must, by re-borrowing interest and principal to replenish the circulation — and even allowing for the accumulating sum of debt to be (usually) negligibly diminished by factors such as bankruptcy and consumption of usually little of our production in the course of exploitation — those models not only forecast the Reagan Administration’s tripling of previous national debt, but further projected ultimate world wide monetary failure at approximately 2010 AD.

Is this why the bankers needed to explode and implode the monetary supply and economy right now? At present the money supply is expanding still as Central Banks and Governments in thrall to the robber-bankers throw money at them and their failed institutions. Some are complicit in this massive Ponzi scheme of debt-based economics, others merely ignorant that they are fuelling the fires of the inevitable collapse of consumer-capitalism.

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Bank Of England Slashes Base Interest Rate by 1/3: Last Ditch Measure.

November 6th, 2008 No comments

The Bank Of England slashed the base rate by 1/3 reducing it from 4.5% to 3% in one move. There has never been a cut of more than 1% before. The Bank also stated that the economy is facing it’s worst crisis for one hundred years.

This attempt to get consumers borrowing and spending more fundamentally misses the causal problem of financial instability and actually exacerbates it. Are the British Government playing the same game as the US? The bank bail out package there is shamelessly being diverted to stronger banks to allow them to consolidate through acquisition of weaker banks, along with new tax rules allowing them to write off bad debts against tax in the year of acquisition.

It is clear that British banks will not be passing all or much of this rate cut on to their customers as they did not with the last one. They are claiming that bank lending costs have de-coupled from base rate. This is to some extent true although LIBOR is starting to fall.

It is an eerily similar claim to that from the gas companies who lifted prices claiming gas was linked to the cost of oil on the way up but did not reduce prices when oil started falling claiming the market for gas has “de-coupled” from the price of oil.

Unfortunately all this “de-coupling” makes it look like this is going to be a typical recession/depression with the poor and middle classes getting screwed and the rich intensifying their hold over the wealth of the world.

This is the most serious de-coupling of all: the separation of rich and poor and the concentration of wealth. This is the fundamental problem. Even if the banks pass on the cuts it does not get solved but worsened: poor and middle class families will take on more debt at a time when they can least afford it.

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Categories: Life Tags: , , , ,

Bank Rescues: Capitalism Fails, Depression Coming.

October 15th, 2008 No comments

On July 26th 2007 I predicted the current state of global markets in this post.

There is a false idea in the market now that the worst may be over but I promise you it has just begun. The long term support levels for the Dow Jones Industrial Average are in the range of 2,500 – 4,500 points. We are very likely to see the Dow Jones under 7,500 by Christmas – if not under 5,000. This may happen much more quickly than that – the ostriches have mostly lifted their heads from under the stand and are looking around them wondering what to do. Most seem to quickly turn into lemmings and jump off the cliff when they take in the landscape.

Every time the market rises a little the sellers will arrive.

The problems with the economy are structural, deep-rooted and will not be solved by each country nationalising it’s banking industry or part thereof. Though this surely marks Capitalisms’ greatest failure point yet it merely delays the inevitable in terms of economic downturn by a matter of days or weeks.

The current state of the markets recognises that – the gains made since the weekend are quickly being lost as wise investors are continuing to sell, whilst the sheep who think “it can’t get worse” pour good money after bad into the dying markets.

There will be significant global economic hardship over the coming two years.

Equities are still significantly overpriced in major markets, asset values having divorced from reality in 1992 or thereabouts and having never returned to an appropriate level.

What is an appropriate level? An ordinary family needs to be able to buy an ordinary house without being mortgaged to an impossible level. On this basis the UK and US housing markets are something like 50% overpriced.

The equity markets are going to yoyo for a while – but do not be in doubt – the trend will be strongly downwards, and for some time to come.

Super-Bank-Bail-Out-Rescue-Man will not do the job.

Super Bank Bail Out Man

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