Monday, October 06, 2008

Behind the Economic Crisis 1

It's not the first time we've seen big money bailouts in our economic history, of course. Financial crises have been with us since the stock market was invented. But let's not forget that everytime the market struggles, there's a ton of money pumped in to shore it up. Public money. But this time, there's a lot of resistance to it. Could it be we're finally waking up?

Today on Thinking with Somebody Else's Head, the first in a series of what's going on Behind the Economic Crisis.

First of all, apologies for not posting here for awhile. I was very busy preparing for our 1st World Conference of Analytical Trilogy, which wrapped up last weekend in San Diego. It was a great event actually, that a number of loyal Thinking with Somebody Else's Head listeners attended - and I was very gratified to see that. Mike McVay joined us from Houston, Mark Carlson and Jane Reading were in from Sedona, Rozann Wellman and her mother flew in from Utah. And my fellow Canadians were there in some force, including Dennis Hilton from Vancouver, Will LaJeunesse and his father from Edmonton, and Jason Coombs, late of Windsor but now living and working with us in São Paulo.

We had 3 1/2 days of very fascinating lectures and workshops that really highlighted the expansiveness and depth of Norberto Keppe's comprehensive science of Analytical Trilogy. We also had a chance to feature the revolutionary Keppe Motor at the event, and at a couple of press conferences in L.A. and San Diego. And now, awareness of this revolutionary technological achievement has spread significatnly all over the world. Our Keppe Motor site provides more information for you, and so does our blog. If you're really interested, set your Google Alerts to Keppe Motor and Analytical Trilogy to stay up to speed.

We were, of course, in the U.S. during the historic Senate and Congressional discussions of the $700B bailout package proposed by Bush and Treasury Secretary Paulson. That was wild stuff to watch. Coincidentally, perhaps, we were leaving the U.S. during the dramatic no vote to the package last Monday.

This was not the first time Keppe's work had been introduced to the country. Keppe and Claudia Pacheco were invited there personally back in the early '80s to spread their innovative and solutions-based work there. After years of admiring the American society, Keppe was shocked at the decay he discovered in America. He wrote a series of books aimed at conscientizing Americans of the wrong path they were heading down with the poorly conceived Reaganomic policies of the time. Liberation of the People, The Decay of the American People (and the U.S.), and Work and Capital laid it all out clearly - the decay, the pathology of power, the inversion of placing capital above work, the destruction of the ideals of the Founding Fathers and the Constitution, the solutions Keppe's work proposed.

Although the American people loved his work (and still do), the power structures didn't, and it all culminated in Keppe and Pacheco fleeing the persecution in 1988. They lost everything, but re-established in Europe and finally found it safe enough to head back to Brazil. Their work flourishes here today, and our World Conference was another attempt to have Keppe's work sprout in the country that is so lost and so in need of real solutions.

We're going to explore the problems behind this current crisis in the next few podcasts. First thing to say is that this is not a new crisis at all. As Keppe noted in the '80s, the economic orientation towards speculation was creating a disastrous situation in the country. Money policy should be linked to production, to work - not to encouraging us to make money with money, as Reaganomics was doing. All the production of virtually everything has been moved offshore - to China and Mexico and India and Taiwan - and this is a disaster for the U.S. If there's no production anymore, what generates the cash? Speculation. Complex and abstract investment instruments called derivatives and hedge funds that generate huge profits - or losses - based on small movements in the prices of commodities or assets. Nothing tangible provided, just numbers in a computer somewhere.

So the crisis today is the result of decades of problems that were never addressed - a decay in all areas of American society, in ethics, and manufacturing and education and farming. And this is what is imploding now.

Keppe tried to alert the U.S. society about this, but it fell ultimately on deaf ears. Now, we're trying again.

I just want to say a little more because it's important to see that th eeconomy has been in trouble for awhile now. It's been made to appear that it's an unprecedented thing, but the signs have been around for a long time. Just a recent analysis of the situation reveals that huge amounts of dough have been poured into shoring up jittery markets.

In the International Herald Tribune of August 2007, they reported that the Fed pumped in $43B to maintain interest rates. At the same time, the other 2 parts of the Trilateral Commission, the European Central Bank and the Bank of Japan were also injecting billions. 250B pounds were injected by the Bank of England and the European Central bank as well.

And then, there our current scenario - $70B to protect Lehman Brothers, $85B for AIG, $180B on Sept. 18 by the U.S. Fed along with the European Central Bank, the Bank of Canada, the Bank of England, the Bank of Japan, the Swiss National Bank to shore up the financial system.

Now, $700B. And I'm just scratching the surface. Where's all this money gone?

Combine that with former Secretary of Defense, Donald Rumsfeld's admission back in 2001 that they couldn't account for $2.3T in transactions they'd made. "We've got no idea," he said.

Something's fishy, don't you think?

Something's also wrong when a homeowner can't pay his mortgage and gets thrown out on the street while the banking system that's overextended in mortgages gets bailed out with billions.

Le'ts start the process of analyzing this disaster and proposing solutions. Dr. Claudia Pacheco, vice-president of Keppe's International Society of Analytical Trilogy joins me today to do just that.

Click here to listen to this episode.

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