Global Economic Crisis

A characteristic of the global financial and economic crisis that erupted in 2008 is that central banks have usurped the role of policy maker in sovereign states from the politicians. In the absence of coherent economic and fiscal policies in the United States, Japan, the Eurozone and United Kingdom, central bankers have employed their power over the printing press with unprecedented vigor, unleashing a tidal wave of liquidity in a desperate effort to stave off a global economic depression. With the manipulative aplomb of a snake charmer, they have sought to push down interest rates to a point where short term rates in most advanced economies are at virtually zero, while arousing confidence from investors and consumers who would have otherwise have little to cheer about.

The central bankers, in the minds of many, are the heroes of the economic crisis, supposedly saving the global economy from credit atrophy and demand destruction while the feckless politicians stood by helplessly. In case you would otherwise be unaware of the supposedly epic achievement performed by the central bankers, they have engaged themselves in a massive public relations drive during the crisis, paralleling their mega-liquidity dumps, seeking to persuade the public that central banks have become the new temples of salvation in an otherwise bleak economic and fiscal dystopia.

There has now emerged a strong voice that seems be throwing a wet blanket over the self-adulation that has become a by-product of central banks. Jaime Caruana is a name largely unknown to the public at large, but intimately familiar to every central banker. He is the general manager of the Bank for International Settlements; the BIS serves as a global clearing house for central banks.  Here is what Caruana had to say at the recently-concluded annual meeting of the BIS:

“Extending monetary stimulus is taking the pressure off those who need to act. Ultra-low interest rates encourage the build-up of even more debt. In fact, despite some household deleveraging in some countries, total debt private and public, has generally increased as a share of GDP since 2007. For the advanced and emerging market economies , it has risen by about 20 percentage points of GDP, or by $33 trillion — and rising government debt has been the main driver. This is clearly not sustainable. Low rates have allowed the public sector to postpone consolidation at the risk of a further deterioration in sovereign credit quality and damage to longer-term growth. There is plenty of evidence that as public debt surpasses about 80 percent  of GDP, it becomes a drag on growth, because it raises debt servicing costs and uncertainty about the future tax burden; it increases sovereign risk premia; and it reduces the room available for counter-cyclical policy.”

In effect, the general manager of the Bank for International Settlements is warning that the radical steps undertaken by central banks during the global crisis can do no more than buy time for the politicians to get their act together and craft sound economic and fiscal policies that are the underpinnings of sustained growth. To believe that central banks can or should continue their artificial pump priming indefinitely as a substitute for true economic reforms is to evade understanding of the scope and limits of what central banks are capable of.

Caruana offered the following summation:

“Borrowed time should be used to restore the foundations of solid long-term growth. This includes ending the dependence ondebt; improving economic flexibility to strengthen productivity growth; completing regulatory reform; and recognizing the limits of what central banks can and should do.”

Regrettably, none of the steps outlined by the BIS general manager have been implemented in any major advanced economy impacted by the global economic and financial crisis. It is likely that the limits of what central banks can accomplish will only be realized when the next major financial crisis arises.

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

YouTube

Hillary Clinton Nude

Hillary Clinton Nude

YouTube

HILLARY CLINTON NUDE

WALL STREET KILLS--A CHILLING NOVEL ABOUT WALL STREET GREED GONE MAD

To view the official trailer YouTube video for “Wall Street Kills,” click image below:

Wall Street Kills-Official Trailer

In a world dominated by high finance, how far would Wall Streetgo in search of profits? In Sheldon Filger’s terrifying novel about money, sex and murder, Wall Street has no limits. “Wall Street Kills” is the ultimate thriller about greed gone mad. Read “Wall Street Kills” and blow your mind.

In the year 680 AD, a military engagement  occurred in the town of Karbala, in present-day Iraq. The forces of Hussein ibn Ali, grandson of Islam’s prophet, were defeated by the army of the ruling Umayyad caliph. Hussein was beheaded, and approximately 150 men on both sides died. Based strictly on military casualties,  the Battle of Karbala would be viewed by historians as a mere skirmish. However, the importance of a battle cannot be measured strictly by an accountant’s ledger of losses inflicted and incurred. In terms of its long-term  strategic significance, the Battle for Karbala  must be ranked as one of the most consequential in recorded history, for it created the seismic divide in the Islamic world between Shia and Sunni Muslims, and the for the past 13 centuries the internecine struggle persists as to the correct and legitimate line of succession beginning with the Prophet Muhammad.

The followers who mourn Hussein, his bother Hasan  and father Ali as the first Imams, and martyrs of the true path of succession in Islam, have come to be known as the Shia, a large minority branch in the Islamic world that has been in perpetual theological conflict with the majority within the Muslim world, the Sunnis.  This internal strife within Islam that has endured for more than a millennium sets the context for the fearsome bloodletting occurring in Syria.

In a uniquely insightful column published in Lebanon’s English language newspaper, The Daily Star, entitled “Qusair Portends Great Danger Ahead,” Beirut-based Palestinian-American journalist Rami Khouri  points out that the victory in that devastated Syrian town for President Assad is in a larger sense a defeat, for it was only with the massive intervention of the Iranian backed and controlled Shiite militia based in Lebanon , Hezbollah, that a triumph could be claimed over heaps of rubble in a once predominantly Sunni populated city.

In response to the destruction of Qusair, prominent Sunni theologians throughout the Arab and broader Muslim world are calling on their faithful to flock to Syria to fight a new Jihad, not against the Western world or Israel, but in opposition to what is being described as a Iranian Shiite plot to dominate the Middle East. Those sentiments are being echoed by renewed sectarian violence in Iraq, and continuing Sunni-Shiite conflict in Pakistan.

Khouri writes with prescient eloquence, “The Hezbollah-Syria-Lebanon dynamic now also feeds into the newest regional problem arena: deteriorating Sunni-Shiite relations across the Middle East, including increasing incidents of outright ethnic cleansing, bombings, and intense provocations that started after President George W. Bush and Prime MinisterTony BlairinvadedIraqand turned it into the first modern Arab battleground of Sunni-Shiite mutual demonization and death. “

Now, a decade after the beginning of the first modern Sunni-Shiite civil war  that resulted from the American invasion of Iraq in 2003, Syria has become the center of gravity in a regional sectarian bloodbath  that displays every indication that it will get far more bloody, with no end in sight to the carnage, as the rest of the world lulls itself into believing that it can be mere spectators to frightful instability that will  likely not confine its ruinous impact to the Middle East.

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

YouTube

Hillary Clinton Nude

Hillary Clinton Nude

YouTube

HILLARY CLINTON NUDE

WALL STREET KILLS--A CHILLING NOVEL ABOUT WALL STREET GREED GONE MAD

To view the official trailer YouTube video for “Wall Street Kills,” click image below:

Wall Street Kills-Official Trailer

In a world dominated by high finance, how far would Wall Streetgo in search of profits? In Sheldon Filger’s terrifying novel about money, sex and murder, Wall Street has no limits. “Wall Street Kills” is the ultimate thriller about greed gone mad. Read “Wall Street Kills” and blow your mind.

According to Eurostat, the agency compiling data for the 17-member  European Monetary Union,  unemployment throughout the Eurozone continued to rise, reaching 12.2 percent in April. In the worst afflicted Eurozone economies, the overall unemployment rate is well above 20 percent, with youth unemployment in some cases exceeding 40 percent, such as in Italy.

Even if the Eurozone were to magically transition to high rates of economic growth, it would take years to reduce the level of joblessness to levels that existed prior to the onset of the global economic crisis. However, such a miracle is not in the works. All the leading prognosticators, including the IMF, project tepid  growth at best, with several major economies in the Eurozone remaining in recession. While pressure grows on the ECB (European Central Bank) to engage in more quantitative  easing, the politicians remain impotent in the face of continued economic malaise and stagnation.

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

YouTube

Hillary Clinton Nude

Hillary Clinton Nude

YouTube

HILLARY CLINTON NUDE

WALL STREET KILLS--A CHILLING NOVEL ABOUT WALL STREET GREED GONE MAD

To view the official trailer YouTube video for “Wall Street Kills,” click image below:

Wall Street Kills-Official Trailer

In a world dominated by high finance, how far would Wall Streetgo in search of profits? In Sheldon Filger’s terrifying novel about money, sex and murder, Wall Street has no limits. “Wall Street Kills” is the ultimate thriller about greed gone mad. Read “Wall Street Kills” and blow your mind.