This article was posted to me to-day by colleague !
it is an excellent explanation of the current state of affairs in the international financial markets and does NOT excuse the current Government of their handling of the unique problems within Ireland.
In an attempt to comprehend the current “credit crisis” I decided to try to investigate its underlying causes. To my dismay I discovered that the situation did not come about by accident but was actually conceived and planned by the International Banking Fraternity in Basel, Switzerland, in 1998.
The tsunami of credit that burst onto the scene after this “Basel Accord” tried to save America from a recession, enabled it to fund a war, sleep walked Europeans, politically, into the Euro Zone, and attempted to nurse-maid the virgin state called the European Union. This crisis is no accident it was premeditated and internationally agreed.
If you don’t believe the pre-meditation involved please read the quote below from the Wall Street Journal, Nov. 27th. 2007:
“In 1998 the Basel Accord created the opportunity for regulatory arbitrage whereby banks could shift loans off their balance sheets. A new capital discipline that was designed to “improve” risk management led to a PARALLEL BANKING SYSTEM whose lack of transparency explains how the market started to seize up.
The “originate-to-distribute” model REDUCED THE INCENTIVE for banks to monitor the CREDIT QUALITY of the loans they pumped into collateralized-
loan-obligations and other structured vehicles, the rules failed to highlight contingent credit risk……”
American history has shown that many of its great leaders saw the danger in granting banking institutions too much power over the destiny of a nation. The Basel I Accord indicates just how fundamentally the International Banking Groups have lost their moral compass and altered old standard banking rules. Through sleight of hand i.e. “off balance sheet accounting” they allowed the financial structure of the world to become totally unstable and risk prone. National based central banks participated in this fraud by failing to “beef up” local regulatory supervision. If one was cynical one would actually come to believe that in 1998 future failure was built into the matrix; failure which only the strongest and the most astute institutions could survive.
The end result will be systematic institutional deflation on a worldwide basis. Even though cash is being pumped into the major banks the multiples of “off balance sheet” credit are now historic, thus the corporate inflation has already occurred. What we will now experience going forward is dept collapse and with it falling mortgage issuance and restrictive commercial funding. Here in Ireland business activity has almost come to a standstill and everybody is holding their breath wondering what the next crisis will be. The only saving grace is that things are not much better in Italy, Germany, France or Spain and is actually much worse in Scotland, (where the bank of Scotland failed) England and Greece. This crisis is truly global.
As institutional deflation (due to collapsing systematic credit) and social inflation (due to the panic demand and circulation of currency) spreads around the globe those who are left holding excess negotiable resources will be in a very powerful position to soak up value assets for pennies on the dollar. Regular folk will not be able to participate in this bonanza because for them the banking credit system will be closed with nothing to offer but foreclosure and frustration. The majority will in a defensive survival mode while the privileged few will be in full scale acquisitive attack. Such was the case in the last depression. How history is repeating itself. Those who instigated the “off balance sheet” travesty knew exactly what they were doing. My advice is if you cannot beat them join them. Friends go to cash and the physical money metals as soon as you can. Contract your business and life-style expenses. Network and co-operate within a real community for the exchange of goods and services that sustain authentic life. Before things get really bad become educated and aware. Form city and town based money circles based on the teachings of E.C. Riegel and learn how to issue community based, bearer-negotiable, split-barter, exchange–instruments of agreed value; otherwise known as money. (Most people do not fully understand that money, in essence, is a social contract based on human trust and mutual benefit). This “crisis event” is going to get much worse before it gets better folks. There will be short periods of reprieve but the reality of the problem is so serious and fundamental that it will take years, maybe decades (as in Japan), to work through, even with a “nationalization” type solution. But perhaps it is true that “every cloud has a silver lining” and that “every problem bears within it the seeds of a greater opportunity”. Maybe finally after ninety five years the good people of the United States and the world will awake from their media induced trance and realise that too much power was usurped by an elite on the 22nd. December 1913 when the Federal Reserve was set up. Maybe it is time the international central bank, the International Bank for Settlements in Basel, was abolished and regular citizens took back their financial destiny.
Peaceful, proactive and constructive community must reassert its primacy over immoral, selfish and destructive internationalism. For patriotic Irish men and Irish women it appears that the time has come once again when they must save their country for the greater good. The selfish, the vainglorious and the criminally incompetent must be stood down.
Published Web Essay September 2008:
Financial Sense Online: USA
Market Oracle. Co: UK