Governments Cannot Contain the Crisis Until Fundamental Changes Are Made By: Curtis Ophoven 5/20/2010 - 10 Comments The markets crashed 3+ percent today, as investors sold everything but Treasuries. Your Ad Here The global debt crisis cannot be contains by central banks because there is not enough savings anywhere in the world to cover the debt ridden nations of the world.  And saving are the only source of real wealth. The only solution seems to be the liquidation of assets – the deflationary process of purging the markets of the over-leveraged debts of the world.   The global experience with social welfare is coming to an end. Injecting more paper money into the market, as Europe did last week, does not solve the fundamental problem with welfare economics.  There needs to a drastic change in social and economic structure. The second part of the solution is to face the recession, dismantle welfare economics and turn to fiscal conservatism.   The solution is forcing politicians around the world to acknowledge that welfare economics are a sham a paper tiger a phony system of instability.  It’s very simple; if you want to eat - you need to work, period.  No more handouts, bailouts or social programs that steal money from one group of people and give it to another group of people.  The politicians that peddled this lie for decades on end are responsible for the looming global disaster.  And the public needs to wake up and realize they have been sold a bag of rocks in exchange for their life’s savings. Related Articles Liberalism and Its Welfare Economics Must Die If the Global Economy Is Going to Survive Obama’s Student Loan Reform is a Marxist Idea that Will Push the Economy Further into the Abyss Free Market Principles Provide the Cultural Mandate for a Peaceful and Stable Economy Seven Primary Causes of Tyranny and Why They Are Gaining Support: Part 1 Government Stimulus Continues to Paralyze the Economy   Subscribe via RSS Copyright © 2010 PennyJobs.com. All rights reserved. << FREE >> Weekly Newsletter... Signup today and start receiving our free weekly newsletter! Reader Comments Comment 1 Jen Says: on Tuesday, May 25, 2010 12:41:38 PM Calif. Democrats Propose Nearly $5 Billion in New Taxes http://www.cnbc.com//id/37329776 "Democrats in the state Senate on Monday countered Gov. Arnold Schwarzenegger's proposed budget cuts with a plan to raise taxes by nearly $5 billion, largely by extending temporary taxes and delaying corporate tax breaks for two years." Comment 2 Chen Says: on Thursday, June 03, 2010 7:43:18 PM China's Treasury Bill will be overtaking the US' t-bills with their higher interst rates. http://english.peopledaily.com.cn/90001/90778/90859/6986357.html http://www.businessweek.com/news/2010-03-12/china-bonds-may-return-6-on-banks-buying-fund-says-update1-.html http://www.chinastakes.com/2008/12/panda-bonds-could-help-china-avoid-the-risks-of-us-treasury-bonds.html Comment 3 Lei Says: on Thursday, June 03, 2010 7:45:46 PM http://neithercorp.us/npress/?p=512 "China has had trillions of dollars in currency reserves which help create the trade deficit that allows their industrial based export economy to thrive. Why would they want to issue bonds in their own currency, increasing the value of the Yuan and ending their trade advantage? Because China’s goal is to convert its billion citizen society into an import and consumption hub while making the RMB, or the Yuan, a reserve currency to rival the Euro and the Dollar. Indeed, these bonds are meant to strengthen the Yuan, increase its prominence as a reserve currency, and eventually allow China to break from U.S. treasuries entirely. It is also possible that the valuation of the Yuan could make it eligible for inclusion in the IMF’s Special Drawing Rights basket currency, a goal China has openly expressed: http://www.reuters.com/article/idUSTRE6250LC20100306 China has strengthened ties with Indian markets, African markets, and formed the ASEAN trading block. ASEAN is now attempting to “unite” with the European Union in order to “combat” the global financial crisis: http://english.peopledaily.com.cn/90001/90777/90856/7001488.html Every single action by China in the past two years indicates that they are not only preparing to break with the U.S., but that they are ready to do so today if they preferred. The bottom line is this: China wants reserve status for the Yuan, and China wants the Greenback replaced as the world reserve currency. When China de-pegs the Yuan from the Dollar, they will begin dumping whatever U.S. treasuries they still hold, allowing the Yuan to strengthen and the Dollar to fall. This will be a disaster for the U.S. economy, and it could conceivably happen before the end of this year." Comment 4 Mo Says: on Thursday, June 03, 2010 8:06:44 PM http://spectator.org/archives/2010/06/02/the-coming-resignation-of-bara The Coming Resignation of Barack Obama By Peter Ferrara on 6.2.10 @ 6:09AM Months ago, I predicted in this column that President Obama would so discredit himself in office that he wouldn't even be on the ballot in 2012, let alone have a prayer of being reelected. Like President Johnson in 1968, who had won a much bigger victory four years previously than Obama did in 2008, President Obama will be so politically defunct by 2012 that he won't even try to run for reelection. I am now ready to predict that President Obama will not even make it that far. I predict that he will resign in discredited disgrace before the fall of 2012. Like my previous prediction, that is based not just on where we are now, but where we are going under his misleadership. Is the President Above the Law? Comment 5 Lauren Says: on Thursday, June 03, 2010 8:14:18 PM Most stock mutual funds have own shares of BP so your IRA or 401K retirement fund is sinking. BP's oil spill isn't just an ecological disaster - it's a catastrophe for Britain...and you Read more: http://www.dailymail.co.uk/debate/article-1282987/BPs-oil-spill-isnt-just-ecological-disaster--catastrophe-Britain--you.html?ito=feeds-newsxml#ixzz0pqn3AdGV "Last year, BP was among the British nation's biggest taxpayers - contributing £5billion to the coffers in 2009 and a magnificent £10billion a year earlier, when oil prices were higher. As BP counts the cost of its accident, a shortfall of income for the Government could thus be devastating, far outweighing the savings made by the £6billion of spending cuts promised a week ago. For household budgets, too, the effects could be far-reaching. The six-month moratorium that has now been introduced on oil production in the Gulf of Mexico - one of the most fecund new sources of oil anywhere on earth - could lead to global shortages. This, in turn, could drive up the price of petrol at the pump and add to the nation's already nasty inflation rate. In other words, the spill is not only the greatest ecological disaster America has faced, it is potentially an arrow pointed at Britain's national recovery and prosperity. At stake is the very survival of BP itself. So how has it come to this? At first blush, the impact of BP's crisis might not seem so catastrophic. After all, so far the exercise in capping and cleaning up the Gulf - including the hiring of hundreds of boats, helicopters and submersibles - has cost a relatively modest $1billion or £640million. That may seem a huge sum for any company to lose, but not when set in the context of BP's vast profits. In 2009 the company made £16.2billion - and that was a poor year. But the truth is, the repair and clean-up operation are just the start of the liabilities it will face in the years ahead. Even if BP is eventually successful in stemming the waste, the mounting costs could be devastating. In particular, the potential for legal pay-outs will be immense. In an attempt to salvage its reputation in those U.S. states worst affected by the spill - Louisiana, Texas and Florida - BP has promised that everyone damaged will be properly compensated and has signed thousands of agreements with local shrimpers and municipalities to this effect. What BP cannot control, however, are the vicissitudes of the American courts, especially in the Southern states where judges (often elected) put a very high value on independence. You have only to reach back to 1987 and the takeover battle between Texaco and Pennzoil (the oil giant founded by George Bush Snr) to understand how badly things can go wrong." Comment 6 Lawrence Says: on Thursday, June 03, 2010 8:17:00 PM Intrusive National biometric ID cards will be back. http://news.bbc.co.uk/2/hi/uk_news/politics/8707355.stm "The Labour scheme was aimed at tackling fraud, illegal immigration and identity theft - but it was criticised for being too expensive and an infringement of civil liberties. The cards were designed to hold personal biometric data on an encrypted chip, including name, a photograph and fingerprints. The supporting National Identity Register was designed to hold up to 50 pieces of information." Comment 7 Audit the Fed Says: on Thursday, June 03, 2010 8:27:15 PM http://www.infowars.com/ron-paul-inside-sources-told-me-fed-is-panicking-at-mass-awakening/ "Host Jones made reference to a recent Council on Foreign Relations speech by Trilateral Commission and regular Bilderberg attendee Zbigniew Brzezinski in which he warned that a “global political awakening,” in combination with infighting amongst the elite, was threatening to derail the move towards a one world government." Comment 8 Sally Says: on Wednesday, November 14, 2007 3:07:48 AM Doomsday cometh http://www.americanthinker.com/blog/2010/05/one_financial_doomsday_scenari.html It is likely that Greece represents the prototype for early US responses. Political denial and cowardice will defer hard decisions. Eventually external forces will force action. The US government will become the same Pavlovian dog conditioned to respond to riots and violence. California is likely to be the first "trainer." If the US government resists bailing out CA, then the streets of CA will be the learning center for the US Pavlovian dog. When (and I believe they will) the US government bails out CA, there is no end to the beggars that will show up. Eventually we run out of money, at least money that can be raised in financial markets. (We may be at this point already.) My guess, and it is only that, is that the US government will do everything it can to avoid the necessary cuts and the resulting violence in the streets. That implies massive monetization to fund commitments. Ultimately that will destroy the currency and result in an hyperinflationary depression that will cause markets to cease to function other than on a barter system. Savings and fixed income pensions will be destroyed. While printing money might buy some time, it will worsen outcomes, including worse violence. A hyperinflationary depression will destroy the country and perhaps our mode of government. Welcome to the advanced version of "The New Normal." Monty Pelerin at www.economicnoise.com Write a Comment Please keep comments civil and on-topic. Abusive or inappropriate comments will be removed without warning.  Name (required)     Email Address (required)     Website URL  Comment

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