President Bush hosted the G-7 summit and held private talks with French President Sarkozy in and attempt to get a handle on the Global Financial Crisis. His attempts to restore confidence in the markets by speaking to the American public have fallen on deaf ears. Actually, no one is listening. Not only is the President a lame duck, he is now without any influence in the USA whatsoever. Therefore, he has turned to the European Union and is moving toward a mentality of globalization.
That is eyeopening for anyone paying attention. Take the time to read below, then keep your eyes open for a special 'guru' to service, one who will initiate a cure for the world's financial ills. I suggest you keep and I out on Mr. Sarkozy.
Rescue the Old World Financial Order or Build a New One
DEBKAfile Special Analysis
October 11, 2008
This weekend sees make-or-break efforts by Western finance ministers and international financial institutions to produce a plan that will drag their economies back into equilibrium before the world’s markets open Monday, Oct. 13. They are working to the dread drumbeats of turmoil, panicky investors and looming recession, which some economists predict will be more disastrous than the 1930s slump which led to World War II.
Two major rescue plans for the banking and financial systems by the US and UK have fallen short of luring fleeing investors back to the markets. In seven black days, crashing global indexes led by Wall Street - which tumbled 18 percent and London by 21 percent - followed by Asia, wiped $4.5 trillion off share values world wide. In the UK, it was calculated that one person goes bankrupt every five minutes. Iceland’s entire economy is bankrupt.
The plan on the G7’s table is essentially to partially nationalize almost half of the Western banking system by buying up stakes in troubled banks or shoring up the banking system as a whole.
In their statement Saturday, the G7 said that they were working on a rescue package tailored for each country within a common framework that would include recapitalizing banks, ensuring strong deposit insurance to protect savers and restarting frozen credit and mortgage markets.
Many leading Western economists strongly doubt that these measures will do the trick. DEBKAfile’s sources note that what the Americans and British have been aiming for until now is to restore investor confidence in the existing financial system by increasing credit, the lifeblood of economies based on the free market.
But matters have gone too far for what is essentially a patching up job. The upheavals of the last two weeks have demonstrated that the entire system is discredited. Trust has been suspended not only in the financial system but in the ability of political leaders to come up with solutions to protect the individual investor and taxpayer.
The partial nationalization of banks in the US and Europe breaks with the rules of the free market, of which the United States is the global epitome - a major factor in its superpower status. While Asia has prospered by embracing free-market practices, resentment is deepening over its shortcomings for which the US is blamed.
The Columbia University Nobel-prize winning economist, Prof. Joseph Stiglitz told the Washington Post : “People around the world once admired us for our economy and we told them if you want to be like us, here’s what you have to do – hand over power to the market. The point now is that no one has respect for that kind of model anymore given this crisis."
And of course it raises questions about our credibility. Everyone feels they are suffering because of us.”
The only Western leader to address this problem head-on was Italian prime minister Silvio Berlusconi. At a government session in Rome, Oct. 10, he revealed: “The idea of suspending the markets for the time it takes to rewrite new rules is being discussed.” Berlusconi added: “They can’t just be for one country, or even just for Europe, but global.”
This remark was quickly retracted after a phone call from the White House in Washington, according to our sources, because it opens up the even more problematic question of who is competent to lead the rewriting of the rules. However, the IMF, high priest of the gospel that the market knows best, has already turned around and is calling for more international regulation and oversight on global finance, a further retreat from its basic tenets.
The looming leadership vacuum is fueling financial fears. The US president George W. Bush’s presidency ends in January, Canada faces an election next week, Japan is on its third prime minister in a year; Britain’s Gordon Brown is fighting sliding opinion polls.
Who will therefore lead the transition to a different, or even amended, world financial order? And how credible would a G7 or EU consensus be, given that so many major economic powers including China, Russia, India and Brazil, were excluded from their counsels?
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