Its common knowledge now, the whole world is grappling with a severe economic crisis. Every newspaper is devoting at least half a page to impress that fact, the business section of the electronic media has been broadcasting nothing but plunging statistics, dwindling figures and unbelievably sluggish trading. Now, this topic is one of the most talked about by the masses ranging from the elite creme de la creme to the legendary middle class people. To be honest, this blog I'm attempting to create is equivalent to jumping head-long into an ocean without any diving kit. But contrary to that life-threatening situation, I don't stand at any risk of being fatally harmed. I may be at the receiving end of brickbats rather than bouquets, but its a worthy attempt. The primary aim I wish to achieve through this post is to elucidate the gravity of the current economic situation in simple words by which, particularly the student community can be enlightened. So here I go..
The symptoms of the current economic recession started showing up in the year 2006. Check out this video http://westtnliving.wordpress.com/2008/12/17/peter-schiff-predicting-the-us-economic-recession-in-2006-watch-video-here/. Those big fart-mouths who had smugly rejected Peter Schiff's predictions as downright outrageous would be very glad to evaporate from the face of this planet. Peter, though said this just 2 years back. Some renown economic gurus of our country predicted this as early as 1992! How was that? Well, it took the Americans a lot of time to get to atleast half the depth of this economic abyss. Or to be precise the Western minds just don't want to get to the bottom of this problem; its more than an economic crisis. Its a sociological, cultural and a political crisis which is gripping the United States of America. It all started with the advent of GLOBALIZATION, the merging of all discrete markets of the world into one humongous world market in the year 1991. The very idea of globalization has its roots in the very framing of the American economy.
The concept of Communism was given a death sentence during the 1980s. The West looked upon this event as a victory not only for Capitalism, but also for unbridled democracy and individualism. Francis Fukuyama, one of the most widely acknowledged intellectuals of the West, in his book " The End of History and the Last Man" said that the end of Communism has brought an end to the possibility of human conflicts in the future after the Cold War period and the fall of the Berlin Wall. He predicted that the society will achieve the highest perfection after embracing the ideals of free market and liberal democracy based on individualism. Before we make any judgements about this intellectual, let me also point out that Mr. Fukuyama is one among the forty co-signors of William Kristol's September 20, 2001 letter to President George W. Bush after the infamous 9/11 attacks that sugested the U.S to 'capture or kill Osama and to destroy his network of associates'. But after witnessing the gravity of the sacrilege committed by USA, he began shying away from the arena of Neoconservatism, his forte. And later on, he flipped sides and voted for Barack Obama during the 2008 Presidental elections. He's an intellectual indeed!!
Here are the reality bites... "Individual-centric liberal democracy and free market capitalism are eroding the civilisational and cultural assets and unbalancing the society." The validity and legitimacy of Fukuyama's theory underwent the acid test during the last couple of years and now the time has come to declare the result. Let us assess the performance of the Capitalist market from various points of view. It all started with the passing of the Federal Reserve Act on December 23 1913, which paved the way for private bankers to gain control over America's money. The then President of America, Woodrow Wilson repented deeply mind you, for having signed the act to come into full force. Therefore it is no accident that America is an empty shell of the great economic power it once had. Bled dry by debt imposed by those whose sole intent was to profit, the US is now bankrupt at a time it desperately needs the resources it no longer has. The Federal Reserve Bank is controlled by a small group of dominant men-private bankers who through their control of the Federal Reserve now control America . This group comprises of the Rothschilds of London and Berlin; Lazard Brothers of Paris; Israel Moses Seif of Italy; Kuhn, Loeb and Warburg of Germany; and the Lehman Brothers, Goldman, Sachs and the Rockefeller families of New York. The Federal Reserve is so sinister in its existence! I'm not able to log into any of their official websites! FED is the only-for-profit corporation in America that is exempt from both federal and state taxes.The FED takes in about one trillion dollars per year tax free! The banking families listed above get all that money.Their practices are equally sinister as it is the only banking system in the world which creates "money from nothing". How is that?
This is achieved by a form of banking called "fractional banking". The money created is then lent to the concerned party and an interest is levied on that sum. This practice existed before the birth of banks. Goldsmiths rented out space in their vaults to individuals and merchants for storage of their gold or silver. The goldsmiths gave these "depositors" a certificate that showed the amount of gold stored. These certificates were then used to conduct business.
In time the goldsmiths noticed that the gold in their vaults was rarely withdrawn. Small amounts would move in and out but the large majority never moved. Sensing a profit opportunity, the goldsmiths issued double receipts for the gold, in effect creating money (certificates) from nothing and then lending those certificates (creating debt) to depositors and charging them interest as well. Since the certificates represented more gold than actually existed, the certificates were "fractionally" backed by gold. Eventually some of these vault operations were transformed into banks and the practice of fractional banking continued. Hence the concept evolved. The first bank of the United States, BUS practiced fractional lending at a 10:1 rate i.e ten dollars of loans for each dollar they had on deposit. This abuse was eventually discovered and the BUS was forced to stop operation. The current functioning of FED is just equivalent to "an old wine in a new bottle". For further details on debt monetization, refer to this link http://economistsview.typepad.com/economistsview/2005/09/what_is_debt_mo.html. The plight of the faithful citizens of USA is woeful. Many of them are not aware of the exact functioning of the FED, which thrives in its complex functioning matrix. The people of USA are waking up to the impending doom that may befall their homeland gifted to them by their mighty forefathers in 1776. Thomas Jefferson, though envisioned this 150 years ago. And this is just reason #1. The second cause for the fall of the US economy will be discussed in the next post. Dear readers, i kindly request you to understand every point of this blog. Your self-awareness will be your only trustworthy armor in times of trouble.
(References: Excerpts from S.Gurumurthy's coillection of speeches, The World Beyond Marx and Market by S.Gurumurthy, wikipedia.org, petitiononline.com,economistsview.typepad.com,www.marketoracle.co.uk/Article7920.html,fdrs.org)
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