photo credit: h.koppdelaney

Shock Doctrine of Bankers Bailout

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Show Notes - 24/9/2008

Karl & Andrew cover the US financial woes amidst the shock of proposed US electoral roll reforms in Michigan, where voters will be struck off if their house is foreclosed!

The property boom-bust cycle is explained with a prominent local example, also Earth Overshoot Day, Speed Renting & upcoming Economics for Activists course. All this and more can be seen in our show notes, which we promise will improve on the permalinks front:

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Right now, with every single penny you spend, the community already pays its ground rent, straight into the well-lined pockets of the select band who, quite simply, are charging you the entrance fee to life on planet earth.

Wars used to be fought for land, now they buy & sell it according to tax breaks their lobbyists garner for them.

Don’t ever invite the Fed governor, Ben Bernanke, to play Monopoly against you, he knows the rules better than anyone:

“The Bank never goes broke™. If the Bank runs out of money
it may issue as much more as may be needed by merely writing
on any ordinary paper.”

From the˜Rules of Monopoly’™, by Parker Brothers.

photo credit: Ryan McD

It seems like American’s have finally cottoned onto this Administration. Michael West sums …

With oil surging $15 overnight to record levels for a single day’s trading, one wonders if economic theory is understood by Paulson’s panickers. With US$247 billion pumped into the global banking system over the last week by the world’s central banks to assist liquidity in the short term money market, one wonders why the US Fed now jumps to the beat of Wall St rather than considering the wider ramifications for the rest of the economy?

All this new money has to find somewhere to live. Speculators see such pumping within the economic framework as inflationary. Commodities are typically a safe haven when inflationary expectations rise as consumers will always need that certain commodity - be it oil, barley or wheat. Listen to Phil Anderson on the Renegade Economists to hear this explained.

Thus commodity investors were very excited by Paulson’s panick. But what will happen in the long run?

The high money supply will push interest rates down, reducing stresses on new borrowings and perhaps encouraging new business investment. But there is a proviso.

That proviso is that investment will only occur if stability is maintained. However, with nearly 1 million US sub-prime borrowers about to switch over to higher rates under their Adjustable Rate Mortgages, we’ve only just entered the sub-prime meltdown.

But the lower interest rates will also hinder the necessary correction in the land market. This will drag the US economy through a long recession rather than a shorter sharper one if market forces were left to correct behaviour. Did Ben Bernanke learn anything from his time in Japan? (*Please note, land prices are not measured as part of inflation’s ‘basket of goods’ in either Australia or the US.)

Michael Hudson on the highly respected Democracy Now, telling the inside story on the bankers bailouts. Hudson was recently interviewed on the Renegade Economists, giving insights on the banking system …

Short Course - 4 x Tuesdays starting Oct 14th*
6.15 - 8pm
Following last year’s highly successful Economics for Activists series, Karl Fitzgerald (3CR - Renegade Economists) returns to provide these gold coin sessions.

Investigate universal economic laws and how they influence our …