Reading between the lines, and thinking outside the box . . .
The Federal Security Service of the Russian Federation is reporting in the Kremlin today that the Bank of England has received from the US Federal Reserve Bank a 'notice' that President Bush is preparing to declare an 'Economic Emergency' during the week of October 5th and will further announce that the American Presidential election due to be held on November 4th will be 'indefinitely suspended'.
Russian Military Analysts commenting on these reports state that though it is unlikely that the President can suspend US elections solely on the basis of an Economic Emergency alone, it is entirely probable that he could do so should their Nation suffer another 9/11 type attack, and which they 'cryptically' observe could be as early as September 22nd as American Military Forces begin to conduct their World-Wide tests of their new nuclear alert system as they conduct another test of their so-called Star Wars Missile Defense System.
So here we are on the morning of D-Day. The world's major couterparties on the $455 trillion derivatives market go into technical default and no one is sure what is going to happen.
The current financial market crisis is not yet over and will have an impact on the real economy, German Finance Minister Peer Steinbrueck told parliament today. "We're currently seeing the biggest financial crisis of all time in the United States."
The US banking crisis wiped billions off the value of European stock markets on Monday, with the European Central Bank and EU institutions trying to calm nerves as traders fear more bad news.
Princeton economist Paul Krugman has accused the US Treasury and the Fed of playing "Russian roulette" with the financial system, warning that the shadow banking network could disintegrate within days.
The killer virus is striking deep into a whole new sector of the financial system.
"This is a potentially very dangerous situation," said Professor Tim Congdon from the London School of Economics. "Banking system capital is being wiped out. The risk is that this could lead to a contraction of credit and set off a self-reinforcing downward spiral, leading to the sort of debt-deflation we saw in the 1930s."
As the bankruptcies mount, the state will have an obligation to step in to preserve social stability. If that means the temporary nationalisation of large chunks of the Western economy, so be it. This is too grave a crisis for ideological preening and free market infantilism.
Insurer American International Group Inc struggled for survival a day after a financial tsunami swept away investment bank Lehman Brothers and forced the sale of rival Merrill Lynch in the biggest financial industry shake-up since the Great Depression.
Americans are justified to be worried, says Nouriel Roubini, of NYU's Stern School and RGE Monitor, who notes there is already a "slow-motion run on retail banks" occurring nationwide. That "run" could accelerate as people realize the FDIC fund has about $50 billion to "insure" about $1 trillion in assets at the nation's financial institutions.
The end of Lehman Brothers and Merrill Lynch, 2 of the largest Wall Street investment banks, 1 week after the government takeover of the mortgage finance giants Fannie Mae and Freddie Mac, marks a new stage in the convulsive crisis of American capitalism.
A sea change is unfolding in the US and world economy that portends a catastrophe of dimensions not seen since the Great Depression of the 1930s.
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