From: Michael Eldred (artefact@T-ONLINE.DE)
Date: Thu Sep 11 2003 - 04:48:43 EDT
Cologne 11-Sep-2003 second annoreturning of eleven-sep-oh-one Sounds like the catastrophile yearnings of those who (feel that they) have been hard done by -- the resentment-structure of Nietzsche's "Zukurzgekommenen". Under the mask of "objective analysis", of course. _-_-_-_-_-_-_- artefact text and translation _-_-_-_-_-_-_-_-_-_ _-_-_-_-_-_-_-_-_-_-_-_- made by art _-_-_-_-_-_-_-_-_-_-_-_-_-_ http://www.webcom.com/artefact/ _-_-_-_-artefact@t-online.de _-_ _-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_ Dr Michael Eldred -_-_- _-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_ glevy@PRATT.EDU schrieb Tue, 9 Sep 2003 09:02:23 -0400: > > http://www.neweconomics.org/gen/ > IMMINENT FIRST WORLD DEBT CRISIS WORSE THAN 'THIRD WORLD' > > ECONOMY REACHING 'TIPPING POINT' - MIDDLE CLASS CONSUMERS > WILL CARRY THE CAN FOR FINANCIAL COLLAPSE > > A new annual report on the global economy published by nef > today, Monday September 1st, predicts that a giant credit bubble, > created > by globalisation's decades of 'easy money', has now reached > a "tipping point" - a point that has historically triggered financial > crises. > > Ground-breaking new analysis in the report - titled Real World > Economic > Outlook - shows that Japan's financial crisis was triggered in 1990 > when > the total stock of financial assets began to outstrip GDP by nine > times. > > Two of the world's richest countries, the US and UK have followed > Japan's > example, inflating the credit bubble and the accumulation of financial > > assets through de-regulation and reckless lending and borrowing. This > bubble has been fuelled further by the decisions of Central Bank > governors > and their boards to lower interest rates to historically low levels. > > Jubilee research at nef, the team that spearheaded global awareness of > a > third world debt crisis, are releasing provocative new research into > the > first world's huge debts. This shows that credit and other paper > 'promises > to pay' now exceed levels of real income (GDP) by ten times. > > Recent stock market falls, drastic though they have been, have barely > dented the credit superstructure. When this credit bubble bursts, the > report concludes, it will be middle class consumers in both the US and > UK > that will bear the brunt of the financial crash. > > Ann Pettifor, editor of the annual report, the Real World Economic > Outlook, said: > > "Gullible consumers, acting as heroically as Atlas once did, are > holding > up the US and UK economies by dutifully borrowing and spending. But > take-home pay is falling in the UK, and unemployment is up in the US, > so > consumers will soon buckle under the strain of single- handedly > propping up > these economies. As we live in a deflationary era, the burden of debt > will > be much more painful than it was say, during the aftermath of the > Lawson > boom." > > "When tipping point is reached, consumers buckle and the credit bubble > > bursts, it is the middle-class debtors who will bear the full brunt of > a > debt-deflationary financial crisis. Sadly, they will suffer much more > pain > than a minority who have resisted the siren calls of lenders and > instead > watched as their assets have been inflated by the actions of central > bankers - enriching the already rich." > > The report notes that the decades since 1970s have been characterized > by a > near-total abrogation by central bankers and politicians of any > control > over the growth of credit. As a result the total stock of financial > assets has mushroomed. At the same time, these central bankers and > politicians have clamped down on wages and consumer price > inflation. > > Ms Pettifor added: "Central bankers and finance ministers have > engineered > the Anglo-American economies so that we now have a combination of > consumer > price deflation and asset price inflation . The rich can't believe > their > luck. This is their dream economy as labour and commodity costs fall, > but > property, stocks and bond assets rise. But for farmers, manufacturers, > > retailers and employees, these economies are turning into a > nightmare". > > Romilly Greenhill, senior economist at nef added: "While Japan has > managed > to keep interest rates very low through a financial crisis - the same > will > not be possible here and in the US. The British and American > governments > are building up substantial foreign and domestic debts - and in order > to > continue attracting finance to fund these debts, will have to raise > interest rates. There are already signs in the US bond markets of this > > happening.. .A rise in interest rates would, in our view, tip the > credit > bubble over the edge and cause it to burst." > > The report warns that in a deflationary environment the real value of > debts rise, and against a backdrop of rising unemployment in the US > and > falling real wages in the UK, will fast become unpayable for many. > While > house prices remain artificially high both in the US and UK, there are > > ominous signs that these assets too could fall in value. Falling asset > > prices combined with spiralling debts would impact most severely on > middle > class borrowers in the UK where total household debt is now 120 per > cent > of disposable income > > When the "tipping point" comes, likely to be triggered by higher > interest > rates in the UK and US - then it will be those same obliging middle > income borrowers and spenders that will be made to bear the burden of > the > ensuing debt crisis. > > "Debtors tend to forget that assets do not pay off debts. Debts are > paid > off out of take-home pay, and in the UK take-home pay is falling in > real > terms", said Ms Pettifor. > > Steve Diamond > School of Law > Santa Clara University > > Office: 408-554-4813 > steved@s... > sdiamond@s... > > > --- End forwarded message ---
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