The US Market crash has begun.

Disorder · Jun 18, 2007

http://www.globalresearch.ca/index.php?context=va&aid=5964

t’s official. Mark your calendars. The crash of the U.S. economy has begun. It was announced the morning of Wednesday, June 13, 2007, by economic writers Steven Pearlstein and Robert Samuelson in the pages of the Washington Post, one of the foremost house organs of the U.S. monetary elite.

Pearlstein’s column was titled, “The Takeover Boom, About to Go Bust” and concerned the extraordinary amount of debt vs. operating profits of companies currently subject to leveraged buyouts.

In language remarkably alarmist for the usually ultra-bland pages of the Post, Pearlstein wrote, “It is impossible to predict when the magic moment will be reached and everyone finally realizes that the prices being paid for these companies, and the debt taken on to support the acquisitions, are unsustainable. When that happens, it won't be pretty. Across the board, stock prices and company valuations will fall. Banks will announce painful write-offs, some hedge funds will close their doors, and private-equity funds will report disappointing returns. Some companies will be forced into bankruptcy or restructuring.”

Further, “Falling stock prices will cause companies to reduce their hiring and capital spending while governments will be forced to raise taxes or reduce services, as revenue from capital gains taxes declines. And the combination of reduced wealth and higher interest rates will finally cause consumers to pull back on their debt-financed consumption. It happened after the junk-bond and savings-and-loan collapses of the late 1980s. It happened after the tech and telecom bust of the late '90s. And it will happen this time.”

Samuelson’s column, “The End of Cheap Credit,” left the door slightly ajar in case the collapse is not quite so severe. He wrote of rising interest rates, “As the price of money increases, borrowing and the economy might weaken. The deep slump in housing could worsen. We could also discover that the long period of cheap credit has left a nasty residue.”

Other writers with less prestigious platforms than the Post have been talking about an approaching financial bust for a couple of years. Among them has been economist Michael Hudson, author of an article on the housing bubble titled, “The New Road to Serfdom” in the May 2006 issue of Harper’s. Hudson has been speaking in interviews of a “break in the chain” of debt payments leading to a “long, slow economic crash,” with “asset deflation,” “mass defaults on mortgages,” and a “huge asset grab” by the rich who are able to protect their cash through money laundering and hedging with foreign currency bonds.

Among those poised to profit from the crash is the Carlyle Group, the equity fund that includes the Bush family and other high-profile investors with insider government connections. A January 2007 memorandum to company managers from founding partner William E. Conway, Jr., recently appeared which stated that, when the current “liquidity environment”—i.e., cheap credit—ends, “the buying opportunity will be a once in a lifetime chance.”

The fact that the crash is now being announced by the Post shows that it is a done deal. The Bilderbergers, or whomever it is that the Post reports to, have decided. It lets everyone know loud and clear that it’s time to batten down the hatches, run for cover, lay in two years of canned food, shield your assets, whatever.

Those left holding the bag will be the ordinary people whose assets are loaded with debt, such as tens of millions of mortgagees, millions of young people with student loans that can never be written off due to the “reformed” 2005 bankruptcy law, or vast numbers of workers with 401(k)s or other pension plans that are locked into the stock market.

In other words, it sounds eerily like 2000-2002 except maybe on a much larger scale. Then it was “only” the tenth worse bear market in history, but over a trillion dollars in wealth simply vanished. What makes today’s instance seem particularly unfair is that the preceding recovery that is now ending—the “jobless” one—was so anemic.

Neither Perlstein nor Samuelson gets to the bottom of the crisis, though they, like Conway of the Carlyle Group, point to the end of cheap credit. But interest rates are set by people who run central banks and financial institutions. They may be influenced by “the market,” but the market is controlled by people with money who want to maximize their profits.

Key to what is going on is that the Federal Reserve is refusing to follow the pattern set during the long reign of Fed Chairman Alan Greenspan in responding to shaky economic trends with lengthy infusions of credit as he did during the dot.com bubble of the 1990s and the housing bubble of 2001-2005.

This time around, Greenspan’s successor, Ben Bernanke, is sitting tight. With the economy teetering on the brink, the Fed is allowing rates to remain steady. The Fed claims their policy is due to the danger of rising “core inflation.” But this cannot be true. The biggest consumer item, houses and real estate, is tanking. Officially, unemployment is low, but mainly due to low-paying service jobs. Commodities have edged up, including food and gasoline, but that’s no reason to allow the entire national economy to be submerged.

So what is really happening? Actually, it’s simple. The difference today is that China and other large investors from abroad, including Middle Eastern oil magnates, are telling the U.S. that if interest rates come down, thereby devaluing their already-sliding dollar portfolios further, they will no longer support with their investments the bloated U.S. trade and fiscal deficits.

Of course we got ourselves into this quandary by shipping our manufacturing to China and other cheap-labor markets over the last generation. “Dollar hegemony” is backfiring. In fact China is using its American dollars to replace the International Monetary Fund as a lender to developing nations in Africa and elsewhere. As an additional insult, China now may be dictating a new generation of economic decline for the American people who are forced to buy their products at Wal-Mart by maxing out what is left of our available credit card debt.

About a year ago, a former Reagan Treasury official, now a well-known cable TV commentator, said that China had become “America’s bank” and commented approvingly that “it’s cheaper to print money than make cars anymore.” Ha ha.

It is truly staggering that none of the “mainstream” political candidates from either party has attacked this subject on the campaign trail. All are heavily funded by the financier elite who will profit no matter how bad the U.S. economy suffers. Every candidate except Ron Paul and Dennis Kucinich treats the Federal Reserve like the fifth graven image on Mount Rushmore. And even the so-called progressives are silent. The weekend before the Perlstein/ Samuelson articles came out, there was a huge progressive conference in Washington, D.C., called “Taming the Corporate Giant.” Not a single session was devoted to financial issues.

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Joeslogic · Jun 18, 2007

Which US political Party is funded in large by the communist chinese?

Joeslogic · Jun 18, 2007

Answer Democratic party.

It is imperative that the economy be positioned as being in dire straits. This is true for two reasons one to get the Democrats in office. The exact same scenario played out for the first Bush. See there is a trend and mark your calendar and look at the election cycle.

Don't be a fool and fall for the hype.

America gets framed as the great world evil and all the incompetents that cannot compete drool for American economic demise. Meanwhile the foot is in the door with all the America haters. They have the Democratic party at their beckoned call. The Communist get them elected. They benefit from windfall profits in bad corporate decisions. Blame it all on the republicans. Use the same class warfare tactics they always have. Come out with the media having the Democrats made to look like the solution for the Republican problem every time.

But if you pay attention and connect the dots their own big money machine is tied up in profiting off of the destructive "Big Business" practices
They to benefit from that without any guilt by association. The actual Chinese military contributed to Willie Clinton's campaign 1 and 2. *go ahead and challenge me on that say it's not true*

Mark your calendar 2008, 1012, 2016, 2020, 2024, 2028...........

Dwaine Scum · Jun 18, 2007

Joeslogic said:

Answer Democratic party.

It is imperative that the economy be positioned as being in dire straits. This is true for two reasons one to get the Democrats in office. The exact same scenario played out for the first Bush. See there is a trend and mark your calendar and look at the election cycle.

Don't be a fool and fall for the hype.

America gets framed as the great world evil and all the incompetents that cannot compete drool for American economic demise. Meanwhile the foot is in the door with all the America haters. They have the Democratic party at their beckoned call. The Communist get them elected. They benefit from windfall profits in bad corporate decisions. Blame it all on the republicans. Use the same class warfare tactics they always have. Come out with the media having the Democrats made to look like the solution for the Republican problem every time.

But if you pay attention and connect the dots their own big money machine is tied up in profiting off of the destructive "Big Business" practices
They to benefit from that without any guilt by association. The actual Chinese military contributed to Willie Clinton's campaign 1 and 2. *go ahead and challenge me on that say it's not true*

Mark your calendar 2008, 1012, 2016, 2020, 2024, 2028...........
Click to expand...

Just when I think it's imposable for you to become anymore delusional, you surprise me

Joeslogic · Jun 18, 2007

Oh I forgot to state the other reason and that is once they are ion office and pound the economy with higher tax rates and pull money out of the hands of real tax investors and into the hands of crack peddlers. The economy will indeed slump and they already know that they know the result of their actions will make people starve but since they are in charge all the way across the board they need to be able to blame the state of economy of their time on past republicans.

I'm not nastrofuckigdomous I'm just logical and you Dwain are delusional.

Everyone like to go and grab the spin articles and display them. I only show the spin for what it is. The past is unchangeable the impression of the past is. I go a step further and tell you what is going to happen. I already know the game plan. You're just an idiot.

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The US Market crash has begun.

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