Not even the most fertile of imaginations could sit down and concoct a theory that the current global quagmire that the World finds itself in is part of a predetermined and conceived conspiracy conjured up by some fiendish and faceless financial guru who is now sitting in some hidden underground hiding place is counting his trillions. After all, even Bernard Madoff got caught in the end, and he only stole around $50 billion dollars.

Yet there are guilty parties in this mess and they are the leaders of the governments of the free World who ware only too aware that the world debt situation was veering rapidly out of control, yet sat back and did very little about it. And when you think about it, why should they. At the same time as the World’s assets were appreciating in value every year by around five percent, and banks and businesses were making vast profits on which they were paying company taxes and the white and blue collar workers had never had it so good, both spending money that they never really had as well as paying income tax on their earnings and value added tax on everything they bought, the situation as far as tax revenues for these governments was as high and as comfortable as it could possibly be.

And there les the crunch for even the most unsophisticated of economists will tell you that such a unnaturally long running seam of global prosperity is unnatural and could not have been maintained for as long as it had done by natural means, and had to end in tears. Which it certainly did. Governments throughout the Western World have had no option whatsoever but to press gang taxpayer’s money to prevent the US and UK banking system from totally collapsing, taking with them the hard earning savings of a relatively broad cross section of the population who are totally innocent of any wrong doing. Now the UK government, as evidenced in the last budget, have imposed on their citizens a period of austerity that is estimated to last for up to ten years.

So who can be called to task for this catastrophe? Some say they banks. However they are only doing what comes to them naturally. That is to soak up as much profit as they can and usually from the man in the street. This is the typical consumer who had neither the means nor more importantly the personal discipline to avoid the temptations of “buy today and pay tomorrow even if you don’t have it” mentality. These unfortunates generated trillions of dollars in paper profit for the banking system, which were worth considerably less than the paper they were printed on. But who knew, and even worse, who cared enough to put a stop to it before the damage to the very framework of our financial systems slewed totally out of control.

The banks certainly didn’t want to put a stop to the madness, as they were earning tremendous profits, on which they paid out generous dividends to their shareholders, who in turn authorized disproportionately high performance bonuses to bank officials. All of it in cash.

So where are these profits and bonuses now? Certainly not being returned to the now seriously ailing banks in an uncharacteristic fit of compassion and embarrassment. Instead probably stuck away in a bank account in another country, and probably one famous for its chocolate.

So who is to blame? If you haven’t guessed already, the answer is the Governments of the World. They are guilty by default for sitting back and letting it happen. They should have intervened in 2004 and 2005 when it was becoming obvious to all and sundry that this financial wheel of fortune was already being artificially driven. And what price should these people have to pay? There place in history should be forever tarnished for the role they played in this debacle. And don’t let anyone ever tell you that they were taken by surprise.

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Tags: Bank, Banking, Bernard Madoff, British Economy, conspiracy theory, Financial News, UK Banks

Is the global financial crisis a conspiracy?—or just a case of too many people who should have stopped the rot looking the other way.

When more talented and experienced writers than I sit down to write the history of the first global depression of the 21st century, the chances are that they will say that it all began with the collapse of the Bear Stearns Bank of Manhattan, New York, and attach much of the blame on the crash on the role of mortgage-backed securities that brought the global banking system to its knees.

In its prime Bear Stearns were the fifth-largest investment bank in all of the US, and had survived and even profited during every financial upset since their foundation in 1923. What symbolized the bank and attracted investors was their conservative management policy. However when money supply became easier in the early years of the third millennium, some new generation financial wizards saw the golden opportunity to earn some fairly massive paper profits for the bank, and some really fat bonuses for themselves as a result. In the space of a few years, Bear Stearns shed their conservative image and became the leader in securing loans against asset-backed securities. Other banks followed suit, however Bear Stearns exposed themselves very heavily, and enjoyed tremendous profits for the initial few years. However during 2006 and 2007, as interest rates began to rise and the public found it difficult to make payments, losses became to mount. Instead of curtailing their activities, the bank’s executives chased their losses by increasing their exposure, with similar disastrous results. In March 2008, the whistle was blown on their activities when the Bear Stearns’s board were forced to approach the Federal Reserve Bank of New York asking for an emergency bail- out. When no help was forthcoming, the bank was sold off at a bargain price of $10.00 a share, $120.00 a share less than the bank had been valued at just twelve months before. With the collapse of Bear Stearns, alarm bells and sirens began to sound along the entire length of Wall Street and eventually reverberated around the World.

In the UK, the first cry for help came from the Northern Rock Building Society, and later most of the major high street banks were also found to be in very shaky financial positions many of them due to excessive and indiscriminate lending. The UK public found themselves exposed to the sum of one trillion pounds, which at the time seemed like a colossal sum of money, but now fades into significance when compared to some of the figures being bandied about during the many global conferences being held to discuss the situation, how it happened, how is to blame for it and where did all the money go?

To try and discover the reasons and attach the blame we first have to acknowledge that the World is going through a situation of major change.

First of all global population is on a constant increase, and due to that fact the World’s natural resources are being exhausted. The great industrial nations of the Western World seem neither interested nor capable of finding viable alternatives. Secondly, the governments of the Western World have to come to terms with the fact that there will not be nearly enough jobs for everybody if they do not embark on some of form of protectionism. Not so much against each other, but against the emerging economies of India and China. It may be unpalatable for many to think that way, but the uneven flow of capital to these nations must be curtailed before further and deeper rooted financial disaster falls.

The UK taxpayer, as well as all their friends in the Western World, is both the biggest losers in the situation as well as one of its principal causes. The increasing dependency on the consumer on credit was allowed to reach epidemic proportions. Whilst the banks were allowed to make windfall profits on the back of Joe public’s impatience, naivety or stupidity, the government looked on.

And why not, as long as this irresponsible behaviour was allowed to continue and the economy was ostensibly booming, the UK treasury was earning unprecedented fortunes in the form of tax incomes. Now that the bubble has burst, the taxpayer of the Western World is being asked to mortgage his future yet again to prop up the banks and insurance companies, who have become vulnerable, yet cannot be allowed to fail.

When the history books are written, it will be difficult not to point a finger at those people who were at the helm before and during this crisis. First of all US President George W. Bush and our own PMs Tony Blair and Gordon Brown.

Tony Blair had either the good sense or the good fortune to abdicate his throne and left Gordon Brown to carry the blame for the mess that is now the UK economy. However he cannot come out of it with clear hands entirely, because you wouldn’t need to be a financial genius to see the writing on the wall at least two years before everything went belly up.

So when we take a look at the picture as it stands now, it is obvious that the worst is over, at least because we now know what to expect for the World economy in general and the UK economy in particular. A period of recession, of austerity, hopefully followed by a longer period of restraint, reconciliation and prudent financial management for the public and private sectors as well as the public at large.

There is only one question in my mind that for the UK public remains unanswered, and that is the most significant question of them all. Yet nobody wants to address the question and provide the answer.

Where did the money go!

People seem to have forgotten that during a period running from 2005 to 2008, the price of crude oil doubled and for a while even trebled and almost quadrupled.

It also may not be a coincidence that since the global financial collapse has reached it full force the price of crude oil has fallen to levels that were consistent for almost the previous ten years. Which means that the OPEC member nations simply pushed the prices through the roof, knowing that the World was in a state of false euphoria and would pay any price for a barrel of oil? Oil that began 2005 at $40 a barrel reached a peak of $150 in late 2008.

Just to consider some of the statistics that these facts generate is mind boggling. Current global consumption is around 85 million barrels of oil a day, making for an annual global demand for 31,000,000 barrels. If we take into account that the OPEC member countries are breaking even at $40 a barrel, that means that over the five year period from 2004 to 2008 inclusive, their overheads for producing the 150 million barrels of oil comes out to a staggering six trillion dollars. What is even more staggering is the fact that at a conservative estimate the OPEC countries sold us that oil for an average of $80 a barrel, which means that they made a 100% profit or six trillion dollars.

$6,000,000,000

That’s a lot nothings by anyone’s standards as well as being almost exactly the sum of money that the global economy is hanging out their tongue looking for.

While these figures are rough estimates, the numbers that generated them are accurate and even if they are out by five or even ten percent, they still make some pretty cruel reading.

So if there is a conspiracy behind the global financial crisis, there it may lie.

The question has to be why the leader of the World’s most powerful nation allowed that massive amount of capital flow through his government’s hands.

As readily as Bush and Blair formed an alliance to invade Iraq they could just have easily done so to put a stop to the Western dependency and by doing so forced the price of crude oil down. Their actions will have certainly caused a recession, but one that would surely have been nowhere as severe and painful as that which currently is upon us.

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Tags: Bear Stearns, conspiracy theory, Credit Crunch, Financial News, George W. Bush, Global Credit Crisis, Gordon Brown, Interest Rates, Tony Blair, UK Banks, UK Recession, UK taxpayer, UK treasury

What does Christianity, 911 and The Federal Reserve all have in common?
“Zeitgeist, the Movie is a 2007 documentary film released online free and on DVD, presenting Christianity, the September 11 attacks, and the US Federal Reserve Bank as being instrumental for social control. According to the website’s “statement”:

Zeitgeist, The Movie and Zeitgeist: Addendum were created as Not-for-Profit expressions to communicate what the author felt were highly important social understandings which most humans are generally not aware of. The first film focuses on suppressed historical & modern information about currently dominant social institutions, while also exploring what could be in store for humanity if the power structures at large continue their patterns of self-interest, corruption, and consolidation.” Source Wikipedia

Veiw Zeitgeist:

The second film, Zeitgeist: Addendum, attempts to locate the root causes of this pervasive social corruption, while offering a solution. This solution is not based on politics, morality, laws, or any other “establishment” notions of human affairs, but rather on a modern, non-superstitious based understanding of what we are and how we align with nature, to which we are a part. The work advocates a new social system which is updated to present day knowledge, highly influenced by the life long work of Jacque Fresco and The Venus Project.”

Veiw Zeitgeist: Addendum

http://www.zeitgeistmovie.com/

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Tags: 911, Banking, Christianity, conspiracy theory, Economy, Finance, Inflation, Money, Money Management, The Federal Reserve, Zeitgeist