Five years ago, I ran the cultural section at Komsomolskaya Pravda. Publishing houses used to send me their new releases now and again for review. One day, after digging through the latest shipment of such literature, I stumbled upon a book titled, “Sunset of the Dollar Empire and the End of the Pax Americana.”
I remember reading the title over to myself several times in disbelief. Way back when, Soviet Americanologists loved to debate the collapse of the U.S. financial empire. But this book was published in 2003.
I flipped through the pages, skimming over the text. The conclusions of the author — an economist named Mikhail Khazin — seemed convincing enough. So I gave the book to our economics columnist at KP Jenya Anisimov, who wrote a review and interviewed the author later at our editorial offices.
All these years, I kept Khazin in the back of my mind, and followed his career as he spoke at various conferences throughout Russia. He seemed certain the U.S. was teetering on the verge of an economic collapse, while other analysts were quick to refute his theory. Now, as his once unfathomable prognosis begins to come true, KP contacted Khazin for an interview.
(Article continues below)
Fired from the Kremlin!
KP: Mikhail Leonidovich, how did you end up predicting the current financial crisis?
Khazin: In the spring of 1997, the Kremlin established the Presidential Economic Department. I was made the deputy head of the unit. Our first task was to prepare a report for [former President Boris] Yeltsin about the economic situation. We realized an economic crisis was pending in Russia and would take place in the late summer or early fall of 1998 if the country’’s economic policies weren’t changed.
KP: What view did the higher echelons take of your report?
Khazin: They didn’t really take any view at all. No one read the text except for the deputy head of the administration and Yeltsin himself. In the summer of 1998, we were fired from the presidential administration for trying to stop a business project titled, “State Treasury Bills— Exchange Rate Corridor.” This was the biggest financial scheme of the post-Soviet era. Just as we had predicted, an economic crisis gave way that August. Together with my colleagues, I continued researching the reasons behind the crisis.
After becoming seriously consumed in our studies of the U.S. financial system, we found an unprecedented parallel. Just as our T-bill market had sucked all the juices out of the Russian economy, the U.S. financial market was sucking the resources out of the entire planet. We realized a similar fate awaited the U.S. financial system. Our article was published in the summer of 2000 in the “Ekspert” magazine, titled, “Is the U.S. Digging for an Apocalypse.” We concluded that it was just as impossible to avoid an economic crisis in the U.S. as the financial collapse in Russia.
Playing the idiot
KP: The U.S. obviously didn’t listen to the song written by [the renowned Russian rock group] LUBE during perestroika, “Don’t Play the Fool, America!” Seriously, though, what’s the real reason for the economic collapse? Let’s try to do this without any heavy duty financial terms…
Khazin: I’ll try! The economic model that led to the collapse was the result of a crisis in the 1970s. This was a terrible financial crisis that was the result of surplus capital. Even the 19th-Century classics in economics literature concluded that capital grows faster than labor provides compensation. As a result, there is a lack of demand. In traditional capitalism, this problem is solved on account of crises in excess production. And in an imperialistic system, the problem is solved on account of capital outflow. But by the 1970s, these solutions had run their course. However, the internatinoal situation demanded the U.S. either make a great scientific and technological leap forward or lose the Cold War to the USSR. The administration of [President Jimmy] Carter and the head of the Financial Reserve System Paul Walker developed a very tricky concept. For the first time in the history of capitalism, capitalists began helping others, issuing new currency in an effort to stimulate aggregate demand .
KP: They decided to switch on the printing press?
Khazin: Exactly. In the early 1980s, they started to stimulate demand through state support. For example, they launched the “Star Wars” program. As of 1983, they placed an emphasis on the household economies.
KP: You mean, they relied on the average citizens?
Khazin: Yes. For an entire quarter century, households received funds as a result of issuing new currency in larger and larger quantities.
KP: In other words, credit?
Khazin: Yes. The U.S. was able to make the next step in technological progress as a result of this excess demand. They accomplished the collapse of the USSR and numerous other significant fears. But… The boom took place thanks to resources that were supposed to provide for future growth. The country ate its own resources two generations ahead of time. The U.S. built up tremendous debt. This is clearly seen if we compare the growth of debt in U.S. households with the entire U.S. debt and GDP. The economy is growing at an annual rate of 2-3, or at a maximum 4 percent. But debt is increasing at a rate of 8-10 percent.
KP: Well, let the debt keep growing… The U.S. lived fine up until now without a problem… Better than we did!
Khazin: Yes, the U.S. did create a very high standard of living by stimulating consumer demand. Generations lived without having to experience poverty. But it’s impossible to live forever in debt. Household debt has now surpassed the national economy — more than $14 trillion. Now it’s time to pay up. Of course, Wall Street tried to postpone this collapse. I won’t go into detail about derivatives and other such financial assets, but this was just a gasp for air before an inevitable death.
Another problem in the U.S. is that powerful industries were built around this growing demand. Whatever decision Wall Street takes right now, the demand is going to fall. What will happen to these industries? In 2000, we estimated that 25 percent of the U.S. economy would disappear. Today, we think the number is closest to one-third — if not more.
KP: That’s a lot!
Khazin: That’s an incredible amount! But what exactly does this mean — the destruction of one-fourth of the U.S. economy? It means an uncontrollable increase in unemployment, a horrible depression, a sharp increase in the effect of social services on the budget… Now, the U.S. is jumping all over the place doing everything its can to rescue this fraction of the economy. The government is stimulating banks and manufacturing… But regardless, in 2-3 years, the U.S. will face a crisis similar to the Great Depression.
Who is Who
Mikhail Leonidovich Khazin was born in 1962. He studied mathematics at the Yaroslavl University and Moscow State University. In 1984-1991, he worked at the Soviet Academy of Sciences. In 1993-1994, he worked at the State Working Center of Economic Reforms. In 1995-1997, he was the head of the Credit Policy Department at the Economics Ministry. In 1997-1998, he was the deputy head of the Presidential Economics Department. In June 1998, he left state service. At the moment, he is president of the consulting firm, Neokon.
November 9th, 2008 at 7:34 am
If you want to dance you have to pay the fiddler. Now we’re paying up!!
November 9th, 2008 at 8:07 am
Scary stuff, but the fact is, nobody knows what will happen.
Mankind wont “stand still” while the world falls apart. Governments will pull out all the stops to try and fix the problem. I am not saying they will be successful, but people have been “predicting” the end is nigh for hundreds of years and it always pulls through.
Hell, 50 years ago, most people predicted that the world would have been blown up ages ago.
November 9th, 2008 at 8:11 am
i am screwed whos bailing me out, i am few months behind on the jeep payment, when i got fired i had a problem getting my last check and everything bounced as i was a tenured employee with 3 yrs on the job when the said opps we are bankrupt. So i have to figure it out asap, do i pay for this stuff, ie, car, really the only deby besides 3000 in cc debt, and student loans, my bank account needs to be closed as to automatic payments set up that i cant cover but cant pay all the fees from shit bouncing…AAAAHHHHH, i am geting a gun, i have alternative modes of transportation but shit, what do the infowarriors think? Its is getting bad, i broke up with my girl cause she has a kid from another relationship and i am scared of being responsible for them when it hits the fan i encourage her constantly to movin back to mommy and daddie as she has been out on her own about a year…. Mostly i feel so sad for the kids, the highscoolers that think its just a bump in the road, or their parents that think i am a nut job cause lincoln freed the slaves to supports the war to end the fed, its that simple but i am the crack job, i am loosing it, i swear my ex got (namonia) not sure how to spell but right after i told about the epa warning smokers, she has been out for a week now adding to my misery, my new job, ha funny, they bought a townhouse a few years ago, used the “equity” to purchase another, used that equity to start a business and meet payroll, and guess what, they are now talking bout sleeping in the store before they loose it…. come on guys advice is very welcome… and i think inside we all want to speakup, help out, and prosper.
I am black and thing obama will destroy us, i think the hype round him will cause “volunteers” to join the military, and civil servant brigade also feel he is an ass, and rahm emanuel was the one who forced NAFTA through squashing Mrs. clintons universal health care in the ninties, it will be so bad, i try so hard to tell my self its all just cooky CONSPIRACY stuff, all made up, but its true, emanuel also sat on the board of directors for freedie or fannie, sorry to manny scams to keep up with anymore, not to mention his other advisors, ranging from all walks of life, funny how who he appoints to the office could lead to philabuster house…
November 9th, 2008 at 8:19 am
When the music stops we’ll still be paying…as will our grandchildren.
November 9th, 2008 at 8:30 am
Kim…so, you are going to have bad credit if you can’t figure out what to do! Yeah, you and 310 million other folks. Don’t worry about it, your health is more important than paying back some F…… bank. Relax. If they come for the jeep, you’ll get more sleep. Do what you can and leave the rest to ‘whatever happens’, don’t hurt yourself over money. Bad times are coming and they aren’t here yet. Volunteer your extra time and help others, it will take your mind off your troubles and you’ll ease someone else’s problems…you will also make new contacts that might bring some new (job) something into your life.
November 9th, 2008 at 8:53 am
All money is created as a debt, and it is physically impossible to consume more than you produce.
The financial system acts as a drag on the productive system, because of the fact that costs rise faster than incomes when regarded as a flow. This fact forces societies to get further and further into debt in order to consume the goods and services that they have already produced.
It is nonsense to say that we shouldn’t be able to consume what we produce, and that it is “necessary” to have a recession because “we consumed too much at a prior point in time”. The whole purpose of production is consumption, and improvements in technology since the industrial revolution has put man in a position of economic abundance and potential economic security.
However; an outdated financial system, with respect to income and prices, and the methods by which people are able to buy back what they produce is archaic. The fact that we must continually go into ever increasing debt in order to consume what we produce is evidence of this outdated method. Income needs to be given directly to consumers in the form of a price rebate and a dividend created with new monies which have not come from the productive system. Then, and only then, will mankind escape this debt monster and the inevitable consequences of it.
November 9th, 2008 at 9:35 am
Kim– It sucks to be awake, doesn’t it?! At times I envy the kool-aid people partying like everything’s coming up roses now that we have Obama for president. Make no mistake, though, their rude awakening will come… I’m sorry to hear about your troubles. I’m in a bit of a jam myself. My husband of 24 years told me late one September night that he was feeling like he was living a lie and the next day he came home from work, changed clothes and never came home to sleep again. He’s acting like a divorced dad popping in when he wants to do something with the kids, but it’s clear he’s soon out the door. Thankfully he’s still footing all the bills, but I know it won’t last. So, here I am, the mother of 4. For 20 years I’ve held part-time jobs to pitch in and now I’m supposed to be ready to support myself and the kids. We bought a house 9 months ago, have 4 credit cards maxxed out and the kids’ college years looms in the immediate future. All I can say is it’s gonna take a lot of faith and prayers and the family pulling together to get through everything. I thought my life was set, but my husband’s chosen another. Just goes to show you life is not fair and we all are going to have some tough times ahead.
November 9th, 2008 at 9:43 am
More doom and gloom. I guess this website WANTS the US and the rest of the world to fail.
Few points:
1. Russians have been predicting the death of the United States and the west for almost 100 years now. It has not happened and will not happen.
2. All these “end of the world” people fail to take into consideration the impact of man. Governments, business and people around the world are not going to sit on their hands while everything collapses.
ie- we do not live in a static world that waits for analysts to write up reports.
The simple fact is that we are not headed to the end of civilization and the beginning of a new dawn of cavemen.
Now that being said, I do agree with him on the fact that a new “depression” environment MAY be ahead of us, however that doesn’t mean it has to resemble the 1930’s or lead to a new great war or last 30 or 40 years or whatever.
What I think is the likely result here is the following:
The United States will become more like some of the poorer European countries are now (think Greece).
If you speak to a Greek, they don’t consider themselves to be poor, but going by our American standards, you certainly would consider it.
Americans are not headed for African Third World Status, but the age of McMansions, 3 SUV’s, a cell phone for your dog and a 50″ LCD in front of your toilet are probably coming to an end.
November 9th, 2008 at 10:00 am
1. To buy a country like the U.S. you need to destroy it’s monetry system (economy) once thats done some powerful tycoon (banks or corporation) come in and by off all the depts, depts like companies.
November 9th, 2008 at 10:03 am
Mithan: the people of the world don’t always pull through. A quick glance at history reveals failures such as Rome, the Inca, the Aztecs, Native Americans, european jews and gypsies in the 30’s-40’s, and innumerable others who never even made the history books. More than 99% of all species no longer exist and 100% of all creatures are guaranteed to perish. It is likely that some will pull through, and even more likely that most won’t.
November 9th, 2008 at 10:33 am
You don’t need a Russian to tell people what is already in the process of occurring. Either we are going to pull together as a society and face this crisis in a civil fashion or we’re going to destroy ourselves. Just be prepared for both to occur.
November 9th, 2008 at 10:34 am
Ron Paul has been saying the same things for years and years.
November 9th, 2008 at 11:08 am
http://revolutionmarch.blogspo.....rally.html
November 22, 2008: End the Fed!Rallies for Sound Money Will Highlight Unconstitutional Monetary System
If you can support this march be there and get the word out, regardless!
November 9th, 2008 at 11:22 am
Yes we need to live in shacks and “pay up” as our great russian “prophet” khazin has said, “Now it’s time to pay up”. Everyone should read GULAG ARCHIPELAGO, the author is russian and foretales something much different that happened in Russia that got him kicked out. We as american’s don’t need to pay for bankers printed debt that they used to live in luxury!!!!!!!!!
HEY SHOVE IT you russian peice of SCUM. The BANKERS did this on purpose in order to BANKRUPT people out of their homes and create chaos to offer a SOLUTION. Do you know what that solution is? HUH!!! A NWO!!! WHERE YOU OWN NOTHING AND ARE A SLAVE!!
Why does he not want to go into details the derivitaves market(created from housing market) that is leveraged in the 100’s of TRILLIONS oops don’t want SUCKER AMERICA to think about how much the BANKERS ARE SCREWGING them over.
THEY want the INDIVIDUAL to be the enemy NOT THE SYSTEM.
You have an infiltraitor working at your site ALEX JONES!!!
November 9th, 2008 at 11:40 am
@Kim
Well, your car may be repo’d–the best advice I can give is, don’t bother with maintenance on it, make sure that you get the things you want to keep out of it, and don’t fill up the tank…just spend just enough on gas to get you by. Why pay $50 to fill it up and lose all that money when it’s taken?
Prioritize.
November 9th, 2008 at 12:50 pm
George W. Bush’s father said “New World Order”, back in 1991, be ready for, Project Blue Beam, brought to you by, NASA, not only will we have an economic depression, but a world of concentration camps and oppresion and the NWO will be our saviors/slavemasters, remember George Orwell’s 1984, War is Peace, Freedom Is Slavery…
November 9th, 2008 at 1:19 pm
This “economist” predicted the U.S. Economic Collapse for all the WRONG reasons. He appears to be full of shit, in my opinion. What lead to the coming collapse began with the Federal Reserve ACT, obviously but that was not what happened this time. The source was not this nonsense about Carter and Volcker, though Volcker pummelled the entire economy like a wrecking ball. This started, in 1971 when the Bretton Woods system collapsed because of Nixon and Henry Kissinger asserting that the dollar would be backed by foreign oil rather than gold, enabling them to expand the Vietnam war and print more currency. Had the Gold Standard not been revoked we would NEVER have been in this situation. The Gold Standard was the neccasery check on the Federal Reserve Bank to prevent corruption and the Baby Boomers, or as i like to call them, the spoiled jackasses, allowed all this corruption to occur with no complaints, as long as they could live the way they wanted. Another major point this idiotic economist misses is Alan Greenspans hyper-Leveraging of Silicon Valley, and then the Housing Market. He misses the point completely, and i am not suprised beacuse the Russians have no idea how Economics work. That is why their country collapses every few decades. I even recall seeing a Russian news article recently with Medvedev slamming the Bretton Woods system, even though bretton woods collapsed in 1971. They are about 37+ years behind on their homework as usual.
November 9th, 2008 at 1:32 pm
the depression is just the tip of the iceberg that the tiny, cowardly, slithering fallen angel/not elite/illuminati aliens have in store for us. You have no where to hide in this trib. creeps. We are on to you and your agenda and actions are pitifully boring once on to your trail. speaking of trails, ooooops, it was chemtrails that led right to ya. next is yawn, martial law, fema camp the north american union and amero. can i please have a shot of bird flu, mycoplasma and a splash of morgellons. yippee here come the weatherwars and nibiru. we shall be waiting patiently for the day………….pentecost 2012 you freaks. i always hated snakes. the sheered sheep and remnant love to all others
November 9th, 2008 at 1:50 pm
Another drunk Russian fool who has no clue what he is talking about. These bandits really need to lay off the Stoli!
November 9th, 2008 at 2:45 pm
Will you survive the NWO?
Get the gear you need:
http://www.ezsurvivalgear.com/
November 9th, 2008 at 3:35 pm
This could be the depopulation smoking gun evidence we’ve been watching for
http://ca.youtube.com/view_pla.....BF6686E7A4
November 9th, 2008 at 3:41 pm
Couple of critical points missing.
1) It is a WORLDWIDE systemic breakdown crisis.
2) The term “credit” is obviously, confused. If you BORROW money from your friend (or enemy), you DON’T have credit, you have DEBT. If you lend money (that is NOT borrowed) to someone, you are lending credit, and this money will be repaid with interest, and depending on how much interest, you will most likely make money.
3) The US hasn’t built any real infrastructure in 40-50 years.
4) The US can create credit from thin air. In other words, they don’t have to borrow money from a pig, they can simply create it from thin air the same way the Fed pigs create it from thin air. The difference is, the taxpayer gets a SURPLUS rather than a debt to pigs. Ask Benjamin Franklin how that works.
5) If the credit from thin air is used SOLELY for the purpose of technological and infrastructure investment, then the productive capacity of the country will be increased and there would be a surplus to use for more infrastructure investment.
6) All the claptrap economic theory in the world means NOTHING, if infrastructure and technology are not developed. Without infrastructure and technological development, NO economic theory will work. In other words, no matter how nice the car, its a useless hunk of crap if its sitting in traffic all day.
We don’t have to “dump” the Fed per se, we can simply start generating credit and simply NOT borrow from them anymore. If we do that, the Fed will soon be overgrown with vines and it will disappear into the toilet bowl of history where it belongs.
This economy was doomed the moment Paul Volker (not Walker), George Shultz and Nixon put the dollar on a speculative, floating exchange, fairy tale, toon town extravaganza.
The nuclear age created a situation where you could not simply defeat an adversary with an army (ie, China, Russia). Instead, they decided that in order to fight “communism” they would take the world currency on a speculative roller coaster ride and tie it into a gigantic fictional framework of derivatives and other instruments. When the bubble collapses EVERYBODY gets leveled. From here, they enforce their fascist austerity measures.
So far, some countries are going along with it (asking for bailout IMF money), others are not, and won’t.
They couldn’t do it with guns, so they did it with butter.
The most prominent and powerful of these guys are basically fascist pigs, but there are a lot of people who fight hard for them and go along with it because they have been fooled into believing that this is about fighting the evil communists, and/or turning the world Christian (neo-cons). They made a deal with the devil in order to fight “evil”, very strange, and even MORE, scary.
Jesse Jackson will soon realize that he was shedding tears of agony, when he learns that Obama has surrounded himself with the “free” trade crowd from the very beginning.
However, recent talk has been around an Obama assassination, so they might be a little bit scared that Obama might actually turn on them and fight for his constituents, and turn a cold cheek to the free trade crowd who has surrounded him for so long.
Because when things truly go to Hell, they need someone who is a truly, TRULY stupid puppet, like Biden, or even Bush.
They might be afraid that Obama could go Pinocchio on their ass, when he sees a world facing massive starvation, unemployment and anger.
http://larouchepac.com/
November 9th, 2008 at 4:05 pm
you don’t have to be a “renouned economist” to prophecy a 2nd great depression, only it’s going to be a lot worse than the 29-30 crisis !!!!!!!!!
http://www.youtube.com/watch?v=uSpoGBk51Qg
goldieshouse.piczo.com
November 9th, 2008 at 4:18 pm
The globalists aim to have the depression hit globally. One of their tools is called a “currency swapline”. The Federal Reserve Bank has set these agreements up with other central banks including New Zealand, Australia, the EU, and Switzerland. The exact terms of the agreement have been kept secret although from what I know the following quote rings true:
“The Americans are trying to buy the world with their lousy dollar” Hugo Chavez.
Don’t let your country go for free!
November 9th, 2008 at 9:14 pm
American standard of living comes from INNOVATION – NOT DEBT.
Debt has been created to finance massive government spendings on unjust wars, spying (NSA), ever growing pork projects.
The money lenders are in charge of the government and they run up the tab on the American people. The reality is, that the FREE MARKET is the reason for the abundance in America. The money lenders – our government, are here as a parasite living off the labour of us, we the people!
Remember, the FREE MARKET is what has brought the world a great standard of living. The destruction of the free market is what all this debt is from and where this ‘great depression’ is coming from – it is coming from the enemies of the free market – the money lenders, the banking elite who own the media, the weapons manufacturing companies and certainly the governments of most Western countries, including of course the beloved Obama.
November 9th, 2008 at 9:23 pm
Click on the link and scroll down
” read the article in Russian. I very good one!!! Congratulations!!!
Then I read the english version. The translater omitted the core of author’s point. A very bad interpreting job!!! Find someone who can really translate, so the Americans know what the artocle is about. I think the objectivity by translating is the most important thing!!!!
You can do a much better job, gentlemen!!!!”
Wonder what was left out of the english version?
there are a couple of people saying the same thing.
November 9th, 2008 at 10:27 pm
70 Billion Dollar Bailout…..
Simple math question……
300 million people in the U.S.
right?
OK, lets just create some random number that represents the average debt
each person might have………lets say……$50000.
00
How much would it cost the U.S.
to bail all of us out?
Around 15 billion dollars? Right?
Hmmmmm……..?
What if the average person had twice that in debt?
Like………$100000.
00?
The government would have to fork out around 30 Billion dollars……
So how unfair is this?
Ask yourself why we the people who have made lesser mistakes than that of
the companies in question, don’t deserve a “Bailout”?
November 9th, 2008 at 10:39 pm
Obama Forces Launch ‘Furious’ Assault Against Bush-Clinton-CIA Nazi Coup Plotters:
http://www.cherada.com/articul.....p-plotters
November 10th, 2008 at 9:11 am
I like the name of this guys firm, “Neokon.” Kind of ironic, no?
November 10th, 2008 at 9:24 am
MYSTIC SHADOW: CLICKED ON THAT SITE IT COMES UP THAT THE PLAYLIST ID IS INCORRECT. ARE YOU THE PERSON WHO POSTED THE YOUTUBE CHEMTRAIL HAARP VIDEO? I WATCHED IT ONCE AND HAVE BEEN LOOKING FOR IT EVER SINCE. IT DEPICTED SATAN PLAYING A HARP BUT WAS SPELLED HAARP.
November 10th, 2008 at 9:33 am
Excuse me? This article does not forebode the end of the world. It’s talking about a 25% drop in the U.S. economy. That is certainly not a doomsday prediction. Nations throughout history have repeatedly dealt with massive economic woes. Duh. This article merely talks about America approaching an economic crisis.
What’s with the all you people inferring differently? This article is not fear-mongering. It is simply an economist making an observation – an observation that many other people are making. Sheesh. Kindly go away if you do not like the information on this site. Quit making baseless accusations.
November 10th, 2008 at 9:38 am
#30 where did you go to school???
to give 200,000,000 (200 million) U.S. tax paying citizens $10,000 each.
it would cost the government.
$2,000,000,000,000 (2 trillion)
want to give them $100,000 each add an extra 0 to the number above. (20 trillion)
and the bailout is $700 billion not 70 as you stated.
$700 billion would give 200 Million taxpayers $3,500 each…
November 10th, 2008 at 10:12 am
I found another great web site that has some very godd isight on the current situation. Check it out
http://truegritamerica.blogspo.....d-you.html
November 10th, 2008 at 10:47 am
I can’t believe nobody noticed that he’s the president of a company called Neokon! haha.
November 10th, 2008 at 10:51 am
It still amazes me that people act so surprised to these events…. others have warned of this mafia takeover of the world long ago……..
Adam Smith gave you markers when?
Joseph Schumpeter did….
Frederic Bastiat did…..
F.A. Hayek… Carl menger… Wilhelm Ropke….Murray Rothbard…. Ludwig Von Mises did…..
Milton Friedman did…
My personal giant Ayn Rand did…..
As well as many many others. But people STILL ran with the give me give me Keynesian zombie mobs. I know all about the private international bankers….. but NO-ONE forced you to take a bite of the apple…….. you did it willingly and WITHOUT QUESTION. Sheep…. nutless, whiny, anti-minded, altruist little sheep………
November 10th, 2008 at 10:55 am
It’s a world wide depression, and worse than the 29 crash, people do not realize the magnitude of this crash in full yet it seems. It’s going to dwarf the great depression…
It’s time to learn about the American System of Economics again, and have a revolution
go to http://www.larouchepac.com http://www.larouchepub.com and learn all that you can about the Hamiltonian syetem which came to be known as the American System.
November 10th, 2008 at 11:23 am
#3 Kim; You may want to consider filing for bankruptcy if you have no other alternative like making lower payments.
November 10th, 2008 at 11:50 am
just prepare ,prepare and trust in JESUS CHRIST—–THATS NOT OBAMA,SOME PEOPLE THINK THAT YOU NOW……..
November 10th, 2008 at 12:24 pm
Please go vegetarian and stimulate the renewable energy sector. This will create a surplus of cheaper energy, stimulate the economy, help save the environment, and also save peoples health, which puts a massive strain on social security and health care. Check out http://suprememastertv.com/ for more info.
November 10th, 2008 at 2:36 pm
Pretty good assessment, after Xmas the collapse is going to be like a stone falling. The economy might be saved with a total pull out of the Armed Forces overseas. Total end to the military funding budgets, with money diverted to public works projects. Total ban on all Derivatives, and strips. Only trading on whole assets, or loaning out money backed by real assets. This is not going to happen, so we are in the S–T now. We need to bail out the Big Three, and any other manufacture that is in trouble. Look, it is near the end game, and their going to make 2012 into a real hell on earth. So, stay strong, help one another out, and keep your humanity.
November 10th, 2008 at 4:53 pm
Hello America, Israhell ain’t DONE with you YET !
November 10th, 2008 at 6:19 pm
Accept, know, follow, obey King Jesus. He will SAVE you from the destruction of this world.
Time is running out, visit http://yoursforlife.net God loves us all. . .but the only way to get to Heaven is through His son Jesus.
November 10th, 2008 at 6:48 pm
Jesus Christ! Buddha, say something. God damn! Anyone have more religious input? Joseph Smith? I predict that the Xmas shopping season will be the worst in our history. Lots of pre season clearance. Allah be praised.
November 11th, 2008 at 2:12 am
True history and some good solutions are presented in this video. Do your part and pass the
info along. Thanks.
http://video.google.com/videop.....ey+masters
November 11th, 2008 at 9:30 am
I just want to ask one thing….where has all the wealth disappeared to? As far as I can see, it is all still right here. All those homes did not all of a sudden disappear, they are all still here, all the stores are still here, they are just closed. I am sorry, I just find it very hard to understand it when they say all this “wealth” is lost. The stuff that was lost on the stock market was simply paper profits, and you only lost what you truly invested, whatever “real” money you put in to the stock market.
The only thing I do understand is how big business financially raped America. They picked up entire factories and simply moved to a place in the world where slave labor still exists. They have no loyalty to this country at all, the country that made them to begin with. They were greedy and did not want to pay American workers a living wage. Now they are gone, but we may have the last laugh yet. Because so many of these companies are gone, many Americans no longer have a job, or simply, can no longer afford what these big businesses are selling. Once the American consumer goes down the tubes, these companies will go down the tubes with them, and they deserve it, and they should not be bailed out by anyone.
November 11th, 2008 at 10:25 am
To Post 41 Colin Teners
I thought the bankruptcy laws have been changed. Are you sure you could keep all that stuff? If you can get away with it, more power to you. Everyone gets bailed out but the little guy. Even so, if you do go bankrupt you may find it very hard to get credit for things you really need like a car. Sure you can always pay cash for a car, but what happens if you just can’t save up that much and your other vehicles are dead?
I would just like to tell people one other thing about debts. All states have what they call “statute of limitations”. That means if you have a credit card debt or a bill for health care or many other kinds of debts, after a certain amount of time, they can no longer come after you to pay up. In many states the statute of limitations on credit card debt is 6 years. That means that if you do not make a payment or use the card for 6 years, the debt is then canceled. However if you make just one payment, or just one purchase, the time is re-started. That’s why many credit card compaines will try to get any kind of a payment out of you so that the statute of limitations does not run out.
Please go and google “statute of limitations +your state” and find out for yourself as each state has different rules and I am certainly not a lawyer and this should not be taken as legal advice, heck I am not even sure I spelled “statute” right.
Also, if you have a lot of debts and are sick of all the calls, if you write them a letter and tell them they have to stop calling you…they have to stop, that’s the law.
Personally, I had a lot of unpaid credit card debts after I suffered a serious back injury. These people were really mean and annoying, and if I did not get the mean buzzards, I got someone from India I could not understand. I turned the tables on these asses. I never swore or anything, but I would tell them I would send a payment the next day, and of course I never did, and then when they would call and get nasty over that, I told them I forgot all about what I told them…the old Alzheimer’s routine. I tired to drive them nuts, and enjoyed it. I figured if I kept them occupied, they would leave others alone. The people who try to collect these debts are mentally deranged to begin with, I have no respect for them at all.
I feel credit cards are a big ripoff, and I simply refuse to pay. I do not have a job where they can garnish wages, and I have health problems, so ….so far they have not tried to sue me for unpaid debts, of course my credit report is really bad. 30 per cent interest, is that even legal? how can they do that? Then, they charge late fees, on the late fees! And and what about over the limit fees? A guy I knew failed to pay a 100.00 on a credit card, he moved and forgot all about that stupid card. A year later he got a letter from the credit card company, and he owed over a 1000.00 dollars!! All over the limit and and late fees on the 100.00 and the same fees on those fees over and over again!! total horse shit, no wonder our economy is in shambles, and THESE are the people who are getting a bail out from the government! I am seeing RED!
I think credit reports should be abolished, they are an invasion of privacy and contain all kinds of false info, which never gets changed either, even when you tell them about it. Consumers simply have no rights. We need to ban together and simply refuse to pay credit card debt, it should all be declared illegal. And…many many people lost their homes, because of the credit card debt they exchanged for a 2nd mortgage on their homes, don’t tell me that this was not by design.
ALEX, YOU NEED TO DO A MOVIE ABOUT CREDIT CARD DEBT AND HOW IT IS BY DESIGN TO BRING US DOWN. The people who do not believe the 911 conspiracy will certainly believe the credit card conspiracy, because they are suffering from it.
Stay away from the places that say they will reduce your credit card ddebts and get your out of the red. These places are backed by the credit card companies, and in the end they are just another big rip off, but now they have access to your checking account. They are CROOKS! they belong in jail. When will the American consumer get a break, we are VICTIMS of a very well planned financial take over.
November 11th, 2008 at 11:25 am
To Cal (30):
Your math is a little off. If 300,000,000 people each had an average of $50,000 in debt, it would take $1,500,000,000,000 for the U.S. government to “bail everyone out.” That is 1.5 trillion dollars, not $15 billion. Or, one-thousand and five-hundred billion. You’re off by a factor of 100, a pretty large error at this level.
The Federal Reserve has increased its balance sheet by over $1.2 trillion, and that number is likely to swell. The derivatives that are acknowledged are in the $60 trillion range, and most of these seem to be blowing up, so there will be more and more “credit” created by the Fed and the U.S. Treasury to deal with these problems.
As several writers have pointed out, the burdgening financial fiasco is well beyond U.S. consumers simply having overspent. This is not to excuse anyone who irresponsibly spent more than they could afford, but consumer excess alone does not account for the collapse of the world financial system as we know it. Even if the government stepped in and bought out $1 tirllion or even $2 trillion in subprime and other mortgages at face value, th crisis would still be with us.
The synthetic instruments created by Wall Street geniuses (and many were, from a strict IQ point of view) resulted in a Ponzi scheme in which trillions of dollars of paper obligations were created with only a tiny fraction of real assets to back them up. As these dominos begin to fall, tens or trillions of paper “wealth” will vanish, and all the houses in America will not be sufficient collateral to replace these losses. Unwitting investors (including some of the most sophisticated pension plans in the world) bought or sold insurance on claims on insurance on claims on bonds or other assets, with many of these instruments representing ten to twenty times the value of the original asset or debt being insured. In many cases, no one even knows who ultimately owns the underlying asset or debt. It is chaos.
This never should have happened. Many elements play into this:
1) A Congress which abrogated its responsiblities under the Constitution (power to create money) and authorized the creation of the oxymoronic Federal Reserve.
Incestuous relationships between the big money interests on Wall Street and the government. Let’s see: Hank Paulson leaves Goldman Sachs to become Secretary of the Treasury, and with a little known law, is allowed to sell over $500,000,000 (that’s a half of a billoin dollars) with no federal tax obligation (nice perk – saved him about $100 million). Then AIG gets in trouble, and the Treasury (Paulson) tells Congress that we (the lead to the slaughter taxpayers) need to lend AIG $85 billion or it will sink. Coincidentally, AIG owes GS $20 billion, which it repays to GS after it taps the taxpayer loan. OF the five big investement banking firms that were allowed to increase their leverage by the SEC (see #4 above), only two survived, one of which is Goldman Sachs (Bear Stearns and Lehman Borthers went bankrupt, Merrill Lynch is being bought by Bank of America). JP Morgan (which essentially got Bear Stearns’ assets for nothing) is still standing, and it has the biggest book of derivatives out there. Oh, it also is one of the owners of the Federal Reserve, and it too was allowed to become a bank holding company.
2) The Federal Reserve for inflating various asset bubles with easy credit and artificially low interest rates, and its ridiculous advice to Congress against regulating the derivatives market. This last position by Alan Greenspan alone was a horrible disservice to America and the world.
3) The speical interest groups representing big money interests who lobbied Congress for laws (or lack of laws and regulation) that allowed these big money interests to plunder the countries wealth and truly “redistribute” wealth into their hands.
4) The SEC, for being lax when it could have been enforcing better regulation, and for giving in to the big investment banking houses and allowing them to go from 12:1 leverage to as much as 40:1 leverage (leverage which would not have worked without the low interest rate policies of the Fed and/or the essentially free money from Japan).
5) The rating agencies who violated common sense and their fiduciary duty by agreeing to rate pools of subprime debt as “AAA” or other non-junk ratings. True, they used historical default rates on mortgages when coming up with ratings for various tranches of debt in these pools, but used historical data which even a non-economist would know was not applicable. E.G., historical default rates on mortages that were issued with real down payments and based on fixed rates and real incomes could not be used to predict the default rates of no-money down, teaser rate mortages with re-sets based on no documentation.
6) Fannie Mae and Freddie Mac, who cooked their books and were allowed to continue operating while their executives took home huge bonuses and luxurious perks.
7) The Wall Street investment bankers who cooked up these exotic instruments that even many of them cannot explain today. These were elaborate speculations, and not investments. Goldman Sachs created and sold many of these, sold them to investors who are now facing massive losses, and at the same time GS bet that these same derivative products they sold others would blow up. GS made a fortune while others were losing their shirts (but hey, it was different parts of the firm that sold while others bet against what they sold, so they are not culpable, right?), and as soon as the unravling got so big that even GS was getting into trouble, it cried “help” and the Treasury/Fed allowed it to become a bank holding company so that it could borrow at low rates from the Fed.
9) Government agencies that collaborated in misleading the public by issuing artificially constructed statistics, understating inflation (keep COLA down), understating unemployment, and overstating GDP. Investement and savings decisions based on this purposely false data were bound to be misjudged.
10) Corporations that strove to maximize short term share performance to enhance top executives bonuses, with little regard for building asset configurations of long term value. This was exacerbated by compensation schemes that paid ridiculously large bonuses in the (real or artificial) “good times’ while rarely penalizing these executives in the bad times. Greed ruled the day, and we now rue the day that greed has created. We are the only so called “democratic” country where CEOs earn 350 times the salary of the average worker in their companies. Thirty years ago it was more like 35 times (and is closer to that in most European countris and Japan). We, as a society, have made “rock stars” out of many CEOs, and allow them to be compensated as such. As much as I would love to earn a base salar of $20 million or ever $2 million a year, no one needs that much money to live a comfortable life.
11) The mortage lending companies who came into exisitence and crated the exotic mortages that got us into this housing mess: no money down, 125% financing, 2% teaser rates for two years, interest only loans, “pay what you want loans” with ever increasing principal, etc. In the old days, the banks loan money for mortgages only to people who were judged to be good credit risks: down payments of 20%, stable employment history, mortage payments not exceeding 30% of income, etc. The banks held the mortgages, so they wanted to make certain the lons were good. The Wall Street genius, looking at what Fannie Mae and Freddie Mac were doing, got the idea that they could package pools of mortgages into mortgage backed bonds, and sell these mortgages to investors, earning fees from doing so. Suddenly, there was a demand for pools of mortages that could be packaged and sold by the investment bankers. Along some the mortgage lending companies to meet the demand. They were not banks: they borrowed money (often from investment banks, who were borrowing cheaply from Japan or elsewhere), used this money to fund mortgages, then sold packages of these mortgages to the investment banks who would package them into bonds and sell these to investors (other government, pension funds, mutual funds, etc.). The mortgage lending companies did not make their money from holding mortgages (as the banks once did), but from loan generation fees: the more mortgages they issued, the more money they made. The incenitive was not to lend to sound borrowers, but to lend as much (or other people’s money) as possible to as many as possible. Ergo the exotic mortgages they created to get more people into the housing (read: mortgage) market. This then lead to unscrupulous practices, including “liar loans” and fraudulent documentation by brokers. One problem, though” many of these mortgage lenders agreed to buy back some of these mortages if they went bad: oops. Now, the guys running these big mortage lenders (like Countrywide) couldn’t be so stupid that they didn’t see that this was a musical chairs game. What they counted on was having a chair when the music stopped. While they waited, however, they got as much as hundreds of millions in bonuses and from stock salse, selling stock before their companies collapsed when the music stopped. Guess what? None of them have been forced to give back the personal wealth they got from this wonderful game they palyed: only their other stockholders and the American public are getting screwes as a result of their questionable management.
12) A certain percentage of American consumers. While this may be a relatively small contributor to the problems we face today, many Americans have lost their sense of personal rsponsibility and are quick to blame others for their excesses. If we all lived within our means, saved before we made major purchases, and only bought homes with down payments and fixed payments we could meet with our current incomes, the economy would be a lot smaller but we wouldn’t be in as bad a mess as we’re in. Too many people were willing to consume today with the belief that they could pay for it tomorrow. Too many people viewed their houses as “ATMs,” taking money out to spend whenever they could. Two generations ago people looked forward to “mortgage burning parties” when they had fully paid off the debt on their homes. The goal was to have a debt free place to live in retirement. That concept is so alien today that it is painful to look at how bereft of common sense (and sensible spending habits) we’ve become as a nation. The great prosperity of the last twenty or so years was an illusion built on a foundation of debt: take away home equity loans and credit card debt and most people would have lead lives with far fewer material possessions (and much less stess).
Fascism is defined as the merging of large corporate interests with the government. America has become a fascist state. Anyone who believes that “the people” actually have a say in how the country is run is being naive. There are only a few real voices who stand on principle in Congress, and they have the ability to influence almost nothing. (Yes, I agree with others that Rep. Ron Paul is among these.)
I do think that the U.S. and the world is facing a financial castrophe that will lead to severely reduced standards of living. largely at the expense of the lower and middle classes. The suepr rich will end up richer as they pick up assets at depressed prices. The fe big banking interests left standing will own more and more of the world’s assets.
I do believe will come through is, poore and ideally, a bit wiser. I am concerned that as these problems unfold fully, there may be social unrest and even the imposition of martial law, stripping away the illusion of being a free society.
Despite all of the above, I believe that the U.S. is an incredibly resilient country, and our genius as a people has been our ability to innovate and to suck it up and tough it out when we must. We are soon to be at that point.
I wish I had answers to this crisis, but I don’t. I believe that we need to go through it, endure it, and learn from it. We need to return to the thinking of our grandparents, and realize that we are responsible for ourselves, and consequently must adjust our saving and spending habits accordingly. We must get back to believing that debt is to be avoided whenever possible, whether as individuals or as a nation. We must learn to live with what we need, and not what we want. We must vote out every member of Congress who fails to protect the interests of the average American, and keep doing this until the message is finally driven home to our elected officials. Last, we must remember that we are all in this togther, and help each other out whenever we can.
My sincere best wishes to everyone on this forum. As long as we can continue to speak freely and share ideas, all is not lost.
November 11th, 2008 at 1:27 pm
Khazin’s lucky. Still giving interviews…
Others were sent to Siberia….
November 11th, 2008 at 6:28 pm
Actually, you’re right. Especially about not knowing the answers. No one does.
The key to all this is, as you say, that we can continue (?) to speak freely and share ideas. My feeling is that this freedom will not continue forever. That could be a problem in the foreseeable future. We’ll just have to see what transpires. Whatever, the comments by Michail Khazin are probably correct
November 11th, 2008 at 7:23 pm
This is a translation roughly of one haft of the text. I am surprised that this trancated version made aby discussion. Here it looks like a couple of unsupported forcasts of what is more-or-less clear now. But maybe it even better like this… in particular, in the omotted part Khazin claimed that 9/11 was organized by US as a measure to postpone the crisis.
November 12th, 2008 at 4:47 am
The 70’s were sure a catalyst for change as evidenced, yet again. The use of derivatives in “absorbing shock” became quite prevelant. This is all on the backdrop of the demise of Bretton Woods and the closing of the gold window, but before the “paper lions” get their balls all in a knot, let me say that Bretton Woods had to go ! Didn’t work, but contrary to popular belief, it was not the gold that created the problem !!! It was the fixed peg. Gold , as a currency, will not serve the system of global finance if it pegged and unreflective of real time fundamentals.
Now that gold can be “split” using real time valuations of weight vs currency valuations, allocated gold title can be distributed from A to B in an instant, anywhere, even if you only want to buy a stick of gum.
Store of value with instant seamless liquidity ! SWEET !
Will it be top-down ? Don’t count on it. The script isn’t written that way. Demand must assert its rightful power in the balancing act between supply and demand. We’ve been supply driven long enough, going right back to when the “apple was shoved in our faces”.
The end of an age and the beginning of a new one. Rejoice in that !
November 12th, 2008 at 7:26 am
Long time this disaster was forseen. My old uncle said we (US Government) can’t just keep spending and making things go up forever and now it’s the Day of Reconning (oops sp) Anyway the chickens come home to roost. The enemy is the Fed and the tool of its power is unrestrained printing press, electronic money. Corruption and dislocations, social erosion is all part of the result of going off the Gold standard. Vietnam was financed by inflation and the story still goes on, now its Iraq and tomorrow Iran but who knows. Make enemies then you have a reason to make war, it’s for the money. Almost half of the Federal Budget is just to pay the interest on Uncle Sam’s Debt. Hmmm… How life could have been if they kept the controls in place….