An Economic Crisis - Bank Failures
Corporate Greed caused the Recession and new Stock Market Crash
Nov 5, 2008
It began in 1979 when a group formed a silver monopoly to buy all the world’s silver. In a short period of time they had amassed more than 200 million ounces of silver, equivalent to half the world's supply. When this started silver was $1.95/ounce. It soon peaked at $54/ounce before it plummeted (FOFOA, The Story of the Hunt Brothers, September 2, 2008.)
It began with the outrageous demands of unions, to the point that many corporations had to downsize and impose mass layoffs. It began with the outrageous salaries of sports figures. It began with the increase in doctor fees, dentist fees, and even the fees of plumbers and auto mechanics (one auto repair shop charged the standard four-hour “book” repair rate, but was actually clocked as spending only one-half hour working on the car.) It began with the absurd salary levels of CEOs, and the golden parachute packages. It began with lawyers doing ambulance chasing, filing frivolous lawsuits, or charging overly exorbitant amounts for work.
It began in the nineties with a stock market scheme to make money called “day trading.” Thousands speculated to gamble for quick one day profits. Thousands lost everything.
It began in the nineties when banks began giving loose credit through credit cards - even numerous cards - to those without jobs or good credit ratings. They charged exorbitant interest. Many defaulted.
It began in 1993 when the North American Free Trade Agreement (NAFTA) was signed. Since then, about one million U.S. jobs were displaced. With further corporate “restructuring” many millions more have moved overseas (Economic Policy Institute, Economic Snapshots, December 10, 2003.)
Why Bank Failures and Corporate Meltdown
Construction companies routinely go bankrupt, but reopen under new names. Numerous corporations ignore their debts and fail to pay their taxes (in fact 66 percent of America’s corporations pay no income tax.) Lenders now charge up to 24 percent for credit, but pay only 0.5 percent on savings accounts. Companies now buy out competitors to close them down and eliminate the competition.
Mobil and Exxon somehow circumvented monopoly regulation. They joined for outrageous profits. Together, they made a net profit of $11.68 billion just in the second quarter of 2008, or a profit margin of $1,485.55 per second, even when gas consumption was falling (CNNMoney.com, July 31,2008.)
The newest scam is the Credit Default Swap (CDS). This was a pseudo-insurance scheme that provided coverage to the banks in the event that the sub-prime mortgages went into default. But there really were no assets available to cover that insurance. Up to 60 trillion dollars of coverage was “lost” (Credit Default Swaps - the Next Crisis, F. William Engdahl, June 6, 2008.)
Why the Stock Market Crash
The economic collapse was bound to happen as corporate America became more and more greedy. “Greed is good” claimed Gorden Gekko (Michael Douglas) in the 1987 memorable movie Wallstreet. What people failed to realize is that the fantasy of corporate America as portrayed in that movie including the mergers and acquisitions, stock manipulation, and insider trading, has become reality. In greed, corporations developed unstable and opportunistic schemes which - although not illegal, were certainly unethical, illegitimate and perhaps even immoral.
This economic meltdown of the 21st century was bound to happen as people became progressively greedy. America suffered through one great depression and now this. Karl Marx was wrong in his views about capitalism, but he was correct when he said, “History repeats itself, first as tragedy, second as farce.”
