Central Bankers Overwhelmed by Crisis
I received this email from a friend... Very Interesting.
Debt in itself is not a problem. When all new "money" injected in an economy comes in as debt without creating any additional "new money" for the interest, well there is obviously a shortfall/problem. Now do this over and over and over for years and years and years ....
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I find this article very interesting. Do bear in mind that without the consumer, corporations are dead, however, cheap credit is not good enough, recognition of who the real creditor/creator is, is. No doubt the problem with credit is the fact that the interest portion does not exist. I tell you people that we are on the brink of major change and that we can help to steer it. Be a part of it. Get involved. The heck with tv shows and ballgames. The heck with going to the casino or the movie house. The heck with that what will not elivate us. I was told that as a result of the no money down deal for housing, that in california the buble burst, meaning as the value of the mortgaged properties fell below the amount of the mortgage, (margin call) people abandon the homes but were told by the banks to move back in because the banks cannot care for all those properties. Are you getting this. I have no idea of the facts in california but the point is that without the people, what is the point of it all. Let us all walk from all we beleive we own and see what the corporations do. Will they not beg you to come back since it is thier survival at stake? As we wake up that becomes more apparent. People are not names, not numbers and not birth certificates. People are not persons !!! Persons are legal identities created by governments. Gotchya,,,,,,,,,,,,,,,Let us keep the momentum in our favor going.....
LaRouche - Central Bankers
Overwhelmed By Crisis
$155 Billion Global Bailout In One Day
8-10-7
(LPAC) -- Over the past two days, European and U.S. central bankers have opened the floodgates of cheap credit for imperilled banks, contradicting their own "do-nothing" policies announced as recently as this past Tuesday, August 7. In doing so, they have shown that they consider a systemic crisis of the banking system to be an imminent threat.
Lyndon LaRouche said this morning, "This is the crisis I was speaking of in my /news/2007/07/31/larouche-financial-system-has-already-collapsed.html
statement of last week. That has not changed. What has happened is that this crisis has become so much worse in just a few days that the central bankers have had to reverse their stand. The crisis is overwhelming them."
On the U.S. side, Bloomberg reports that the Federal Reserve injected $24 billion in temporary reserves into the U.S. banking system today.
Earlier this morning in Europe, as all interbank transactions were suspended for two to three hours, the European Central Bank convened an emergency meeting on the acute crisis in the credit markets, and decided to provide an extra overnight facility for the 49 banks which had asked for it, totalling just under 95 billion euros ($130 billion). A senior French banking source said the ECB's hand was forced by "intense demand [for money to cover losses] from the U.S." As in the case of the U.S. Federal Reserve, this was a spectacular reversal of their previous policy that nothing should be done against the worsening liquidity "crunch" worldwide.
The Swiss National Bank had already reversed policy last night, in providing Swiss banks with extra money, according to financial news wires.
Increasingly widespread reports, though denied by Goldman Sachs, said that that bank's $9 billion Global Alpha fund was being liquidated. Other sell-off rumors pointed to the huge D.E. Shaw hedge fund, "worth" $19 billion in assets.
Already on Tuesday, the ECB had given the go-ahead for a "regular" overnight facility in the range of 292.5 billion euros. Together with available facilities before Tuesday, there are now an estimated 440 billion euros in ECB injection money pumped into the banking system.
Nomura International's head of European rate strategy, Charles Diebel, responded to today's action by the ECB by writing, "No one really knows how big the current credit problems are. This is undermining confidence in the system as a whole, and hence the reaction this morning," Bloomberg reports. Ina Steinke, a money-market trader at NordLB in Hannover, said "Every bank is suspect now, so no one is willing to lend money to anyone."
High Frequency Economics writes, "if it turns out that banks are chronically nervous about lending to each other -- this is the dark scenario -- imagine how they will feel about lending to you or me, or to companies with anything but impeccable credit ratings ... or to hedge funds. Pay attention here. This is either a false alarm or a pivotal moment in history"--as reported by the Wall Street Journal.
