Like a Skunk at a Picnic: World Economies Angry at Wall Street and Washington


The condemnation of the United States is beginning, in earnest, from Europe to Asia, the world is beginning to weigh in on the greed and stupidity of our stewardship of the worlds reserve currency; and our dominance of the global economy. Such an outcry was inevitable, and deserved, because our national conduct and financial stewardship of the planets strongest economy was very poor indeed.  Unfortunately the crisis is far from over and when the law of unintended consequences has time to truly work its magic with the hastily conceived bailout we may look back at last week as a fairly tame week. Consider the following from the LA Times:,0,7535469.story


LA Times 9/20/08

By Sebastian Rotella and Janet Stobart, Los Angeles Times Staff Writers
September 20, 2008

LONDON — It’s a rare day when finance officials, leftist intellectuals and ordinary salespeople can agree on something. But the economic meltdown that wrought its wrath from Rome to Madrid to Berlin this week brought Europeans together in a harsh chorus of condemnation of the excess and disarray on Wall Street.

“Greenspan was considered a master,” Tremonti declared. “Now we must ask ourselves whether he is not, after [Osama] bin Laden, the man who hurt America the most. . . . It is clear that what is happening is a disease. It is not the failure of a bank, but the failure of a system. Until a few days ago, very few were willing to realize the intensity and the dramatic nature of the crisis.”

But fear accompanied gloating. The crisis threatens to worsen woes — inflation, unemployment, weak growth — of regional powerhouses including Britain, Spain and Italy. Joaquin Almunia, an ideologically moderate Spanish Socialist who is the European Union’s economic commissioner, offered a simple analysis.“It has been a problem of greed,” he told El Pais newspaper. “In Europe it can’t be said that we did nothing, European banks bought toxic products. . . . Nobody knows when this will end.”



            It’s by no means the Americans who are terrified at the size and scope of this thing it’s the financially literate of every country across the planet.  The big question is will the bailouts and rescue efforts succeed in saving the financial system from ruin and from launching us into another Great Depression?  I personally have my doubts based on some of what the Chinese are saying in their newspapers.  Here is some astonishing criticism of the United States and its economic conduct coming from the last great communist power on earth.  When you realize its coming from communist, totalitarian, Red China, it makes your skin crawl to realize this is what the leading buyer of our debt is thinking right now.  This was from a story done by Reuters:


BEIJING (Reuters) – Threatened by a “financial tsunami,” the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday.

“The eruption of the U.S. sub-prime crisis has exposed massive loopholes in the United States’ financial oversight and supervision,” writes the commentator, Shi Jianxun.

“The world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States.”

“The Chinese government is well aware of the fact that the United States, which is the world’s largest developed country, and China, which is the world’s largest developing country, should have constructive and cooperative economic and trade relations,” he said.

China is a major buyer of U.S. Treasury bonds, and through its sovereign wealth fund it has taken stakes in two large U.S. financial institutions.

(Emphasis added by me)

What does it tell you about the future of the American economy if the largest buyer of our debt, China, tells the world that we need a financial system that’s not dependant on the USA?  What does it tell you when the cry for a diversified currency and financial system that’s fair and just and doesn’t depend on the USA is coming not from Europe: but from Communist China? The Europeans have been spouting the New World Order stuff forever but to hear agreement from communist China is astounding to say the least.  I just wonder if the magic bullet that unites Russia, Communist China, Europe, the Third World and the USA in the need for a global currency, with global regulation and oversight, is the current economic crisis we’re now experiencing.    

Given the management élan and moral rectitude that the United Nations has displayed in managing its money, the prospect of such a global system being less corrupt than Wall Street gives me pause.  When it comes to corruption the UN makes Wall Street look like primary school children. What does it tell you about the future of the American Economy if the people of the world would rather have a new global currency, which is in no way dependant on the United States, rather than continue to fund our debt, our rampant consumerism, and our “overuse” of the world’s recourses?

            Investment banking as we knew it was destroyed last week and the remaining investment banks, Morgan Stanley and Goldman have officially become, this very day, plain old ordinary mortal banks whose use of leverage has been harshly curtailed. Flawed as they may be they gave propellant to our economy for many years and developed many companies and products.  They have become extinct in a week and while that may give some a sigh of relief and a grim moment of satisfaction it’s possible that we will miss them as our economy slows down. I suspect that’s going to be the prime outcome after a period of unimaginable economic upheaval, our economy will never emerge as the engine of growth it once was. One wonders if they had been properly regulated if they might have played a critical role in a dynamic twenty first century economy after all.  Have we driven a steak of Holly through the very heart of Capitalism and did we have enough information and moral conviction to have legitimately made such a decision? Have we cut off our nose to spite our face based on the emotions of the moment? 

            It’s not just the American Economy and financial system that’s changing it’s the global economy and financial system that seems to be emerging from the ashes of our system.  I don’t think you can stop this swing to globalization and if that’s true the world must take the position that our system must be made ashes if a global system is to have dominance.  Given what we’ve been through in the last week and the prospect of what’s to coming our way in the immediate future its looking like the global economy will be rejecting American financial leadership soon.  Last week marks the end of the American Era and from here on out we’ll be managing the fallout, perhaps for years.

This thing isn’t over yet, not by a long shot, it may take a couple of years but in a few years try to remember what it was like a few weeks ago and look around at what confronts you now.  We’re headed for hard times and its already begun so take a breath, stay close to your family and friends, think about all the mistakes we’ve made in the last thirty years and pray we get a chance to correct it all.  Either way its going to be a long and bumpy road through a likely economic depression and a possible currency failure in which the world will come to truly despise us, this time with good reason.  This is looking more and more like the incident that removes the United States from world leadership and transfers it to Europe as the Bible predicted thousands of years ago.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s