Sunday, October 23, 2011
Still Waiting for the Crash
For months now, we have been watching ever-shifting news headlines regarding Europe's debt crisis. France and Germany report an agreement; next day some finance minister warns that it's inadequate. Merkel and Sarkozy are probably spending more quality time together than with their spouses. Greek bonds fall below junk status, then European banks are told they may be required to eat them. The Greek government puts the required austerity screws to the populace, while protesters set the streets ablaze.
Meanwhile, back on this side of the big pond, I have noticed a number of mainstream pundits predicting that the European rescue attempts will ultimately fail in spectacular fashion. Their expectation seems to be that this will cause major collapse of American markets, put serious pressure on banks and send the economy over the edge. Interesting to note that prior to September, that sort of dire prediction was limited to "conspiracy theorist" types and the usual perennially bearish analysts. Now it seems commonly accepted wisdom.
A replay of the October 2008 crash would be an ugly event to behold. Given the current political climate, a repeat of the bankster bailouts would be unthinkable - Both Tea Partiers and OWS activists would link arms on that. Sans bailouts, "too big to fail" institutions will fail with huge impact. The nightmarish corn maze of interlocking derivative contracts has never been resolved following the 08 crash. Trillions in bailout liquidity have concealed the threat thus far, but what will happen when the spigot is turned off?
The spectacle of several large banks failing coupled with a stock market meltdown would likely propel the already frail economy into an even steeper decline. Having totally shot the wad on the previous stimulus, what fiscal tools does the government have left? Borrow trillions more from the banksters who own the Federal Reserve? Not likely. The endgame - whatever it is - appears to be in sight.
One caveat must be offered - we have heard predictions of economic Armageddon for quite some time. The world has continued to turn and life goes on. There was talk of an exceptional window for collapse last week, but the Dow still stands within 200 points of 12,000. Warmongering has escalated against Iran, with an apparent false-flag pretext (assassination attempt on Saudi ambassador) conveniently coinciding. Still no attack, no market crash, and Sarkozy & Merkel still spending quality time together. Reality is rapidly shifting, and it's difficult to get a pulse on what's really happening. Maybe when 11-11-11 dawns in a couple of weeks, we will all receive satorial visions of understanding. Stay tuned.