How many more financial crises in the West can the world stand?

(Left/Right) Christine Lagarde, Director-General of the IMF; Angela Merkel, German Federal Chancellor and Angel Gurría, Secretary-General of the OECD.  Berlin, Germany, 30 October 2012.

(Left/Right) Christine Lagarde, Director-General of the IMF; Angela Merkel, German Federal Chancellor and Angel Gurría, Secretary-General of the OECD. Berlin, Germany, 30 October 2012.

“After five years of crisis the world economy is weakening again”, states bluntly the very first phrase of the editorial of OECD’s latest economic report, published on 28 November. Actually it couldn’t be differently, because the US economy doesn’t seem to respond well to therapy and Europe is in a much worse state. But let’s take one thing at a time.

The West

To avoid a recession the United States is now waiting for the Republicans to endorse the new Obama strategy, which is to feed the economy with more newly printed dollars. Unfortunately it is not only greenbacks that Mr Ben Bernanke, the governor of the American central bank, the Fed, prints. He also turns out freshly printed US bonds with nominal values in the region of hundreds of billions of dollars, leaving the rest of the world, mainly the Chinese, wondering if all that paper will worth anything after some years. Beijing, having accumulated more than two and a half trillion in dollar denominated US debt paper, is much keener to protect the honour and the value of the dollar than Washington.

On the other side of the Atlantic Ocean, the European Central Bank didn’t want to be left out of this paper money bonanza, so Mario Draghi, its governor embraced the same idea and started the printers. Only some months ago ECB offered one trillion fresh paper euros to almost all Eurozone banks, trustworthy or not. Everybody knows that only a handful, if any one at all, of Eurozone banks can be trusted with our savings. ECB’s print production though is much less than the Fed’s.

The US

This is so, not because the Europeans are more hesitant in such matters, but just because they don’t have six naval fleets around the world like the Americans, bombarding who ever does not accept the dollar and the dollar denominated bonds at face value. See what happens with Iran? If Tehran is finally bombarded the world will learn that the poor Iranians would have needed some  hundred years to come up with  real nuclear arms.

It will be a repetition of what happened in Iraq, when the stupid butcher, Saddam Hussein, started selling his oil in other currencies, excluding the dollar. What an unholy man, not believing in the green dollar and preferring the green colour of the Arab flags! That is why he had to meet his kismet.

To support their god given right to exploit the rest of the world (New York banks don’t discriminate, they exploit also the Americans), the US has another fighting fleet, this time of financial calibre, to back any dollar value. Those are the three mighty rating agencies, Standard & Poor’s, Moody’s and Fitch-IBCA. They rush to rate with three As (AAA) whatever the Fed printing machine produces, or the New York banks turn out or promote as debt paper or stocks.

Remember the dot.com crisis, with the entire world believing and paying good money for the rubbish, Bill Clinton himself was promoting? Then we had the great credit crunch of  2008, which still makes us all continue paying for the recapitalisation of US and Eurozone banks. Not to forget also that lately a lot of people were robbed, when caught in the Facebook stock issue. It seems that the US financial sector and the economy in general need every now and then a good wholesale crisis, to make everybody else pay for their sins.

European bankers and politicians, being jealous of their American counterparts, run to follow the US paradigm. They started applying the same principles. First they decided to save all and every bankrupt bank, with newly printed ECB’s money. Then came the bankrupt countries. Greece is again the first to be saved with paper money and pen guarantees.

Paper values V real products

As it is obvious the US and to a lesser degree Eurozone, live on paper money and debt issues. At the same time the production of real things has emigrated to the developing world. The west keeps expanding its already huge services sector, banks included, to offer jobs and incomes to its shrinking younger generations. This arrangement however cannot go on for ever. Sometime in the not so much distant future the working populations in Asia and South America will start asking why the world is so unfair to them. And then the globe will face some grave dilemmas…

OECD’s report can be seen in this address: http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-outlook-volume-2012-issue-2_eco_outlook-v2012-2-en

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Volkswagen getting away with it in Europe

Mediterranean and Black Seas: Commission proposes fishing opportunities for 2020

Commission’s feeble response to financial benchmarks fraud

Two out of every five American couples now meet online

ISIL continues to pose a ‘serious challenge’ worldwide – UN counter-terror chief

Quality of Europe’s bathing waters remains high, latest annual assessment finds

Billions for sustainable investments – Germany’s plan for a green recovery

Merkel: Nationalism and egoism must never have a chance again in Europe

The economic effects of the COVID-19 coronavirus around the world

Is poverty and exclusion the necessary price for EU’s recovery?

Anti-Money Laundering: Commission decides to refer Austria, Belgium and the Netherlands to the Court of Justice of the EU for failing to fully implement EU anti-money laundering rules

From Hangzhou to Rwanda: how Jack Ma brought Chinese e-commerce to Africa

Migration has set EU’s political clock ticking; the stagnating economy cannot help it and Turkey doesn’t cooperate

Camino de Santiago – a global community on our doorstep

EU–US: What is the real exchange in a Free Trade Agreement?

EU-U.S. Trade Talks: European Commission presents draft negotiating mandates

Eurozone in trouble after Nicosia’s ‘no’

China’s impact as a global investor; the Sting reports live from World Economic Forum 2015 in Davos

Germany is trying to rescue its fabled forests from climate change

5 ways to make your organization a great sustainability partner

Brexit: Ensuring a smooth transition for car producers and safety on the roads

Will GDPR block Blockchain?

The reason the world showed limited empathy to the Orlando victims

Opening – February plenary session, 27 new seats

Brussels waits for the Germans to arrive

Long-term EU budget: The Union’s ambitions must be matched with sufficient reliable funding

We need to rethink neuroscience. And you can help us

MEPs propose ways to boost plastics recycling

Yellen and Draghi tell Trump and markets not to expedite the next crisis

“America first” policy goes against EU-US partnership, say MEPs

FROM THE FIELD: Changing world, changing families

Embracing the diversity in a multicultural city of Romania

The great sustainable reset: The new world of work after the pandemic

From social entrepreneurship to systems entrepreneurship: how to create lasting change

Monday’s Daily Brief: Earth Day, looking for a solution to Libya crisis, focus on indigenous issues, Security Council on Sri Lanka, a high-level visit to Bangladesh

European car industry: The Germans want it all

UN chief welcomes G20 commitment to fight climate change

The new crisis is already creeping into the financial system

State aid: Commission approves €6 billion German measure to recapitalise Lufthansa

EU budget: Commission proposes €1.26 billion to reinforce the European Solidarity Corps

24 new European Universities reinforce the European Education Area

Libya: Thousands seek shelter in health clinics from Tripoli fighting, UN warns

Cross-border travel is confusing after COVID – this framework can help borders reopen safely

The importance of exchanges for the medical students of the world

China repels EU allegations of export subsidies

Vestager vs. Google: a fight to ensure a competitive innovation framework

State of the Union 2018: The Hour of European Sovereignty

Global response to poverty and environmental goals ‘not ambitious enough’

Ferry capsizes near Mosul, UN chief offers solidarity, support ‘as needed’

Will France vote for more or less Europe in the next presidential elections?

Eurozone: Statistics don’t tell the whole story

EU future at stake: MEPs broadly welcome Commission’s recovery package proposals

The 2019 European elections: A pro-European – and young – electorate with clear expectations

A woman would have to be born in the year 2255 to get equal pay at work

FROM THE FIELD: ‘Miraculous’ music made by hearing-impaired children

Inflation and interest rates indicate urgent need for action

The 28 EU leaders unable to start a relevant debate on migration and Brexit

This new initiative aims to make cybercrime harder – and riskier – to commit

GSMA announces speakers for Mobile 360 Series-West Africa

Responding to the anger

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s