Listen to Alex Jones
  • Midas Resources

    Listen to Alex Jones

    Listen to Alex Jones

    • Prison Planet.tv
    • Pre-Order The Obama Deception
  • In Trying to Stop the Inevitable Deleveraging Process, the Government is Only Making It Worse

    George Washington Blog
    Tuesday, October 28, 2008

    The financial system is undergoing a period of deleveraging that cannot be stopped. For example:

    • Barrons is running an editorial entitled “The Crash Must Come: Intervention can’t stop the business cycle”.
    • The Economist writes, “Once started, the process [of deleveraging] is hard to stop.”
    • The Financial Times quotes the Bank of Tokyo-Mitsubishi in saying, “There seems little what the authorities can do to reverse the process of deleveraging that is taking place with financial institutions all contracting their balance sheets at the same time”.

    Ultimately, “all the king’s horses and king’s men” cannot prevent the de-leveraging of the financial system under way.

    ***

    Like a giant forest fire the de-leveraging process cannot be extinguished. Thoughtful actions can create firebreaks that limit preventable damage to the economy and the international financial system until the fire burns itself out.

    The process of deleveraging cannot be stopped, but the government is trying to stop it anyway. Instead of allowing an orderly deleveraging process, the government is actually trying to prop up the leverage.

    (ARTICLE CONTINUES BELOW)

    In Trying to Stop the Inevitable Deleveraging Process, the Government is Only Making It Worse 161008pptv3 

    For example, instead of requiring banks to deleverage, the government is reducing their cash reserve requirements so they can increase their leverage to loan money they don’t have through fractional reserve banking. See also this.

    And – even after Greenspan confessed that derivatives were dangerous (and see this) – the government refuses to rescind them or take any other real actions to contain the nuclear fallout from such “weapons of mass destruction“. Instead, the government is trying to prop up the derivatives market by various means.

    By trying to put out the raging deleveraging forest fire, the government is actually fanning its flames and making it more dangerous. And even in those areas where the government appeared to put out the fire, there are hot coals just beneath the surface that are already erupting back into flame (as just one example, inter-bank lending rates are back up).

    As with other aspects of the government’s actions, the attempt to stop the inevitable deleveraging process is only making matters worse.

    Prison Planet.tv Members Can Watch Fall Of The Republic Right Now Online - Don't Miss Out! Get Your Subscription Today!

    Survive

    CANCER CONSPIRACY? Are "they" suppressing the cure? Will YOU be the next victim? Learn the Secret Truth! - READ FULL STORY

     

    • Social bookmarks
    • Social bookmarks
    • Email this article
    • Email this article
    • Print
    • Print this page
    Comment Terms Of Use

    Comments are closed.