By beginning of this week the financial world trembled when the American stock-exchanges were closed for holiday.
What a coincidence!
While Wall Street was celebrating Martin Luther King Jr. Day on Monday January 21, 2008 - in Mumbai investors had lost already about $300 Billions and London's exchange reported losses about £80 Billions on a single day.
All over the world - especially in Asia - the stock exchanges were racing downwards, causing incredible losses for investors.
Blowing accumulated wealth out through the chimney.
On Tuesday morning the FED reacted like anticipated, by "responding to fears of a U.S. recession", cutting its discount rate on direct loans to commercial banks by a 0.75 percentage point to 3.5 - the biggest slash since the quater of a century.
Thanks to that and thanks to additional "interventions" of Paulson's Plunge Protection Team (PPT), created by Ronald Reagan to prevent a repeat of the Wall Street meltdown in October 1987, not much damage happened to American investors.
What happened really and what had triggered the "Bears" out of their caves all at sudden on this long weekend?
I simply don't know. And others pretended that they "didn't know", as well. But by recognizing the "fruits" of this ralley - additional time was bought for the survival of the US$ and it was bought mainly on foreign expenses in Asia.
Another factor was that - against all odds - the European Central Bank (ECB) didn't cut their interest rates officially similar to the FED and didn't flood more liquidity but only "promised to watch the markets thoroughly" and intervene "when necessary"(?). For as we know that any injection of additional money would fasten inflation even more.
The ECB didn't intervene - so they seem to have been prepared - or they are at least good Poker players.
When announcing those "strong words" the head of the ECB, Jean-Claude Trichet, caused a remarkable slip of the tongue: Trichet who was reading from a prepared manuscript stated that "there would be enough liquidity available from the public" - causing an irritated look from the gentleman to his left. As he recognized what he had just said he immediately corrected his words to a more neutral formulation... (as seen on CNN at about 09:15 MEZ on Wednesday but I don't have any video available)
Sire, we do know well that central banks have nothing in common with "states" as they are more or less privately held corporations - sucking off their wealth "from the public", so why hiding it even further?
And this leads to the further assumption that an ongoing tug of war is waging between those worldwide central banks and "their own" governments as you might conclude from the excellent timing of this latest "shoot in front of the bow" of the mainly Asian economy that holds plenty of US securities to keep the US from going under and to maintain their "own" economy's flourishing business.
And now we might know why certain companies are so protected against clear usury and fraud: They are crucical for the various players to maintain their financial war in which a nation is nothing than a pawn on the chess board.
Moreover, Trichet encourages European banks to buy "cheaper" US$ loans and granting so the further survival of the green bucks while even pumping more $s in the markets. That again raises the - already tumbeling - Derivate carousels that have jumped by 27% to a record $681 Trillion in the third quarter, the biggest increase in three years, as the Switzerland-based Bank for International Settlements (BIS) stated in its last review.
Interest-rate futures, contracts designed to speculate on or hedge against moves in borrowing rates, led the increase with a 31 percent increase to $594 trillion during the three months ending Sept. 30, 2007.
Trading had surged already as investors had bet on losses connected with record US mortgage foreclosures and policy changes by the FED and the ECB to offset the credit slump.
And in the shadow of the "Worldwide-wannabe-crisis" the hit against Europe's economy itself was following on its heels:
Yesterday, on 23 January 2008, the European Commission proposed a major package of measures to achieve what the EU's commissars call "ambitious targets" for reducing greenhouse gas emissions and "increasing renewable energy".
Public costs - as estimated by EU's "main commissar", José Manuel Barroso - would be about 60 Billions Euro until the year 2020...
Sounds almost like a bargain, or?
Speaking about burning wealth...
War on 'error, Part 1122: "Global Burning by Money-Flu"
Far Sight 3
Serving Freedom
and Liberty
