It was September 26, 2008 and the world was nervy. The subprime crisis had accelerated into a global meltdown as the world quaked from its worst financial seizure since the Great Depression.
In the United States, Hank Paulson, then US Treasury Secretary, had gone down on bended knee to Nancy Pelosi, then Speaker of the House, begging her to support the proposal for the bail out of the too-big-to-fail banks. By September 28, the Bailout Bill had failed in its first reading in the House, and the stock market crumbled.
“This was confirmation to us of what we already knew,” said economic analyst George Meredith.
”Consumer and business confidence around the world would plummet, and the global economy was going to take its worst hit for decades.”
Then Barack Obama became United States president, stirring much hype and hope among star-struck gazers across the globe. “Not even John F Kennedy inspired as much hope and devotion in his followers, nor was his following universal,” observes Richard K Moore, a frequent contributor to Global Research.
The day after Obama was elected, Larry Younger knelt in front of the congregants at a church in Atlanta and offered a prayer of thanks. “Lord, we have come to you in prayer, and you have heard our cries from heaven, and you have sent us a man called Barack to heal our land.”
It was graphically symbolic. Within the first six weeks of office, Obama proposed spending programmes “that exceeded total government spending of the United States since it’s founding to Obama’s inauguration”, according to Obama’s critics.
On February 29, 2009 the New York Times reported that a deal had been reached in Congress on a $789 billion Stimulus Plan. The package allocated the $789 billion for recovery, some for programmes, some for tax reductions. Timothy Geithner, the Treasury Secretary, announced that an additional $2.5 billion would be allocated to insolvent banks. “That means we are taking on an additional national debt of $3.2 billion, with over 75 percent of that going directly to the banks,” analysts warned.
In Europe, the bailout of banks had begun in 2008, with Germany and France leading a European Union bailout of 1 trillion Euros. World markets initially soared as Europe’s governments pumped billions into crippled banks.
The American bailouts even went to European banks, with reports in March 2009 that “European banks declined to discuss a report that they were beneficiaries of the $173 billion bail-out of insurer AIG. Goldman Sachs, Morgan Stanley and a host of other US and European banks had been paid about $50 billion since the Federal Reserve first extended aid to AIG.
So, as the US engineered the biggest bail-out in history, the world was presumably saved. But as hardcore analysts pore at the figures and mull over the future effects of these bail-outs on the world Obama-mania has gradually given way to a touch of disillusionment and outright skepticism. Some analysts, especially the so-called fringe groups, call the bail-out “an enslavement-by-debt-programme” that will have dire consequences for the US initially, and the rest of the world eventually.
Some hard questions are being asked. What does it mean for the US Treasury to go into an additional $3.2 trillion debt? The US already had a large national debt, the largest in the world, and that it was already running high budget deficits and high trade deficits, all of this before the collapse, the bailout, or the recession. “One does not need to be an economist, or have a crystal ball, to see that by piling on more debt, America will soon be on its knees financially,” say critics.
Gerald Celente, head of the Trends Research Institute, one the world’s leading trend-forecasting agencies, wrote in May 2009 of the “bailout bubble”. Celente released a trend alert, reporting that, “The biggest financial bubble in history is being inflated in plain sight… This is the Mother of All Bubbles, and when it explodes… it will signal the end of the boom/bust cycle that has characterized economic activity throughout the developed world.”
Celente’s forecast was frightening. “This is much bigger than the Dot-com and Real Estate bubbles which hit speculators, investors and financiers the hardest. However destructive the effects of these busts in employment, savings and productivity, the Free Market Capitalist framework was left intact. But when ‘Bailout Bubble’ explodes, the system goes with it.”
Celente’s warnings have alarmed fringe analysts, given that his previous predictions were spot on. Unerringly, he foretold the 1987 stock market crash, the fall of the Soviet Union, the 1998 Russian economic collapse, the 1997 East Asian economic crisis, the 2000 Dot-com bubble burst, the 2001 recession, the start of recession in 2007 and the housing market collapse of 2008.
“Phantom dollars, printed out of thin air, backed by nothing… and producing next to nothing… defines the ‘Bailout Bubble’. Just as with other bubbles, so too this one will burst. But unlike the Dot-com and Real Estate, when the ‘Bailout Bubble’ pops, neither the President nor the Federal Reserve will have the fiscal fixes or monetary policies available to inflate another.
He adds a postscript: “Given the pattern of governments to parlay shocking failures into mega-failures, the classic trend they follow, when all else fails, it is to take their nation to war. While we cannot pinpoint precisely when the ‘Bailout Bubble’ will burst, we are certain it will. When it does it should be understood that a major war could follow.”
Many of these fringe analysts agree that the proper response to the financial collapse would have been to place all the big financial institutions under national receivership. “They created the crisis through fraudulent practices, and baling them out should be the furthest thing from our minds. The nations of the world could figure out who legitimately owes who what, figure out some way to settle up, and establish new sounder bases for currencies. That’s what the G-20 could have been doing, which they didn’t.”
The bail-out has brought fringe analysts to the fore with their notion that the world is moving toward a new order. “Instead of a rational response, based on bringing the financial institutions under control, we have a capitulation to banking interests, symbolized by the installation of Henry Paulson as US Economic Czar, the same Paulson who helped engineer the subprime virus while at Goldman Sachs. The bailout, which has become a global phenomenon, is a crime against humanity, a betrayal of whatever democratic principles remained in our societies,” noted one analyst.
The power of a small group of international bankers is colossal today, according to Harvard and Princeton professor emeritus Carol Quigley, in a book titled Tragedy and Hope. He says they are finding it difficult to hide their true nature. “Their aim is nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. The system was to be controlled in feudalistic fashion by the central banks of the world acting in concert, by secret agreements, arrived at in frequent private meetings and conferences.”
According to fringe analysts ÔÇô accused as holding a conspiracy theory ÔÇô the current scenario is very much like that preceding the establishment of the Federal Reserve in 1913. The ‘problem’ then, as now, is a scary, engineered ‘collapse’. The ‘solution’, then as now, is the greater centralization of banking in private hands, now some kind of IMF cum Central Bank on a global scale. In both cases the promise is to avoid future collapses, while the reality is increased enslavement to banking elites.
“It is well the people for the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow.” That is a statement made by Henry Ford which those who are accused of peddling a conspiracy theory love to quote.
