Global financial crash

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What caused the Global Financial Crash?
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   Whether you had your money in shares, superannuation or property, the result seemed to be the same. Your assets were devaluing every day and there is very little you could do about it.  Finance companies, then Investment banks and now some banks had collapsed and others had been bought out at bargin basement prices.

  The Money Morning report 28-12-08 www.moneymorning.com said "The Dow Jones has lost almost 42% of its value over the last 12 months. The S&P has lost almost exactly half of its value ... and the NASDAQ is down more than half over the past year.  And that's just the financial markets. The housing crisis has snowballed into a disaster of biblical proportions - taking out banks, investment firms, insurance companies and other major corporations. And it's gaining momentum every day.
Billions of dollars in wealth... vanished... right in front of our eyes.
But this crisis is more than just numbers.
It's about retirement accounts obliterated. Home equity slashed.
It's about millions of investors who played by the rules. Who thought their retirement was secured. But who woke up one day to find the rules had been changed on them....Your future is under constant assault from these runaway economic forces...but how can you protect yourself and your investments?
 
WHAT CAUSED THIS CRASH TO HAPPEN?
   It started with the financial deregulation brought in by the New Right extremists of Britain under Thatcher, America under Reagan and New Zealand with Roger Douglas as Finance Minister. It didn't take long to show that if the markets were allowed to run free then they would run to excess and in the mid 1980s the first crisis caused by this deregulation  hit.  The central banks simply flooded the system with more money which eased the problem temporarily, by while the financial markets continued to be deregulated the instability continued.  A series of crisies followed deregulation.  1987, 1990, 1998, 2002, 2008. What was the Governments/Federal Reserves answer to all of these?  They either pumped more money into the system, bailed the institutions out with taxpayers money or cut interests rates. In the case of the 2002 crisis interest rates were cut from 6.5% to 1%
   The end result of the central banks coming to the rescue of the market is that the Risk Investors began to feel they could never lose and were prepared to bet more money than they would have normally. The New Right  financial deregulation has put the world economy at risk while the risk taking CEOs of failed institutions walked away with  millions of dollars in their pockets.  
  For many years economist
Lyndon La Rouche has been warning of this very thing happening, in 1995 he designed the Triple Curve Function which makes clear the economic process afoot.  On October 20th 2008 he declared "What the world is going through is not a financial crash at all, but a far more devastating disintergration of the entire global financial system."
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"Here is what is happening: There are two phenomena going on at the same time. First, we are seeing a hyperbolic hyperinflation in the financial arena, particularly with respect to the quadrillions of dollars in outstanding derivatives.

   The U.S. Federal Reserve, and other central banks around the globe are generating massive amounts of hyperinflationary new money, new dollars, in their doomed effort to bail out the quadrillion dollar collapse of the world financial system.  At the same time we are seeing a temporary collapse of costs of key commodities, such as petrol.  The reason for the price collapse is that world trade and world production have collapsed.  The global real economy is crumbling, in most parts of the world.  Production is falling, need for raw materials and manufactured goods is crumbling as people lose their jobs, lose their savings, lose their homes.

We are wittnessing two simultaneous developments: HYPERINFLATION ON AN UNPRECEDENTED SCALE in the financial realm, and a COLLAPSE OF PHYSICAL PRODUCTION WORLDWIDE, causing a FALL IN COMMODITY PRICES. This is an explosion, not a crash."

Confirming LaRouche's analysis, world shipping of key commodities is grinding to a halt as shippers cannot get banks to give them the credit they need to finance operations and they do not want to risk "putting cargo on a boat and finding that nobody can pay". The demand for bulk carriers has plunged 80% this year.
   The collapse of China's export markets, is having a dramatic effect on China's industry, with half of all toy producers being forced to shut down.  That will soon translate into tidal waves of job losses all over the world.

Nobody seems to have any idea what to do. Already the bank guarantee is falling apart as billions of dollars are withdrawn from non-guaranteed investments, forcing institutions to freeze redemptions. In 1997 the Citizens Electoral Council of Australia started pushing for the need for a New Bretton Woods. It was decided by Eurasian and American leaders that there would be a series of summits to discuss a New Bretton Woods and just as the original Bretton Woods in 1944 was the battleground between the policies  of Franklin D. Roosevelt and the British Empire so it may well be again.  In recent weeks officials of many countries have issued a dramatic call for ä new financial architecture" and Giulio Tremonti, the Italian Economics Minister made the real issue very clear when he said "The thing we need at the moment, is not a mere second Bretton Woods; rather something which could be the closest thing possible to the Westphalia Peace Treaty", which was the 1648 treaty agreement that ended the Thirty Years war in Europe and established the principle of cooperation among sovereign nation-states, around the idea of "the benefit of "the other."

G-20 FARCE MEANS "DOOMSDAY"
  The farcical G-20 summit merely served to prove that none of the world leaders who participated are really facing up to the immediate crucial issues, which are coming down rapidly on the world.  LaRouche declared "What occurred at that event was worse than had they done nothing, because nobody addressed the actual reality, nor the proposed solution - the immediate bankruptcy reorganisation of the entire global system.
What the British and their sundry partners, like Bush and Rudd, are proposing is to extend the idea of a monetary system onto a global scale, the final step of globalisation - an international financial dictatorship".

The G-20 summit could have come up with meaningful steps to reorganise the bankrupt world economy except that Bush, Brown and Rudd sidestepped the real issues.  Australias PM Kevin Rudd played a spoiling role by backing British PM Gordon Browns'IMF dictatorship agenda against a genuine New Bretton Woods reorganisation.
CEC National Secretary Craig Isherwood said "Prime Minister Rudd has done a grave diservice to Australia and the World, his unholy alliance with Bush and Brown headed off any action on the derivatives bubble which is killing the world economy". 

"The CEC is the only party in Australia which acknowledges the actual nature of the economic crisis" he continued: "Far from just a financial crisis, it is a total economic breakdown caused by decades of looting productive sectors of the economy - manufacturing, agriculture and infrastructure - and diverting the wealth into a financial derivatives bubble that has grown to over $13 trillion in Australia alone.  We are now being smashed by the double-whammy of having to pay those derivatives, which is  bankrupting banks, homeowner and super funds, and a collapse in world trade, to which no nation is more exposed than Australia." (and in no small way, also New Zealand - Ed.)
Mr. Isherwood declared, "We have only one solution - the New Bretton Woods reorganisation proposed by the American statesman and physical economist Lyndon LaRouche."
Äustralias immediate future hinges on whether our political leaders have the courage to recognise the destructiveness of the past three decades of globalist free trade policies, and break with those policies, and go with the protectionist, pro-industry and development policies of the New Bretton Woods."

THIS IS A NEW ZEALAND FINANCIAL CRISIS AS WELL
  It will be apparent that though this is a New Zealand website, we are using information given to us by an Australian political party, the Citizens Electoral Council of Australia. This is not just an Australian financial crisis, this is a World financial meltdown and affects all New Zealand homeowners, workers, retirees and families as well.   It is OUR superannuations, OUR savings, OUR jobs and OUR future that is at stake.  This website is about informing New Zealanders about what has happened and what our options are.  We need to join those who are demanding that their leaders take the necessary constitutional measures to GUARANTEE the general welfare of the people.

SAVE THE BANKERS AND SCREW THE PEOPLE
  We're at a stage of this financial crash, where the actions of the various authorities betray their motives.  There can be no doubt that the actions of the British government supported by Bush and Rudd, have nothing to do with genuinely solving the economic crisis, but are designed to usher in a new world order at the expense of nation-states.  National sovereignty is the principle upon which depends genuine economic prosperity and the common good of people.
It is now time to draw the line in the sand, and say, "This is where we fight."

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A derivative is a financial instrument whose value depends on underlying variables. The most common derivatives are futures, options, and swaps but may also include other tradeable assets such as a stock or commodity or non-tradeable items such as the temperature (in the case of weather derivatives), the unemployment rate, or any kind of (economic) index. A derivative is essentially a contract whose payoff depends on the behavior of a benchmark.
Wikipedia.org

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