Cleaning up the mess that Mr Greenspan left behind was never going to be easy. Banks and brokers around the world face more than half-trillion dollars in write-offs as a consequence of the US sub-prime mortgage crisis, which is spreading from the US property market and roiling global stock markets. It’s toppled the US economy into a recession and the tremors are also rattling Asian stock markets.

Roughly $7 trillion has been wiped from world stock markets since the beginning of the year amid fears of a severe US economic recession and financial institutions reporting more mega losses. “The market crisis will preoccupy us well into 2008,” he said German Finance Minister Peer Steinbrueck on Feb 15th. “The financial risks securitized by banks contained packaged explosives,” and he accused rating agencies of having a conflict of interest in the role they played in the process.

So far, the Bernanke Federal Reserve has pumped more than half-a-trillion dollars into the markets with open market operations and special emergency lending schemes, to help cushion the blow to the US economy and stock markets. However, there’s evidence that the Fed’s prescription for dealing with the sub-prime debt crisis, is actually making matters much worse, and leading to “Stagflation.”

As the Fed’s rate cuts and massive money injections filter through the financial system, it weighs heavily on the US dollar, and in turn, a weaker dollar inflates huge bubbles in the global commodities markets. Fund managers have already poured an estimated $200 billion into commodities across the board, as a hedge against the explosive growth of the world’s money supply, competitive currency devaluations, and the negative interest rates engineered by central banks.

The price of crude oil was trading near $70 a barrel as recently as last August, when the Fed suddenly jolted the markets, by lowering its discount rate to 5.75% on Aug 17th, timed to squeeze short sellers in the stock market, on options expiration day. The Fed’s abrupt shift towards easy money fueled a 1,500-point rally for the Dow Jones Industrials over the next two months to a record high of 14,100.

But the stock market’s “irrational exuberance” didn’t last long, once the unintended consequences of the Fed’s rate cuts, a - Global “Oil Shock” – began to settle in. In trying to rescue the Dow Jones Industrials from the claws of a grizzly bear market, the Fed has sacrificed the US dollar, and in turn, ignited a powerful surge in the price of crude oil to $110 /barrel. And most US recessions in the post-World War II era were preceded by sudden spikes in oil prices.

On Feb 15th, Fed chief Ben Bernanke played down the threat of spiraling energy and food prices, saying “inflation expectations remain reasonably well anchored,” then signaled another rate cut in March, as an “insurance policy to head off an economic recession.” Since then, the price of crude oil has surged $17 /barrel, and is wrecking havoc on Wall Street and other major stock markets around the globe.

Read more
Saved version here

Wes Penre is a researcher, journalist, the owner of the domains Illuminati News and Zionist Watch and is the publisher of the same. He has been researching Globalization and the New World Order and exposed the big players behind the scenes for more than a decade now. He has published his research on the Internet at the above domains, which are currently updated to keep people informed what is going on. You can also find his articles linked up, discussed and republished all over the Internet.

In addition, he has done spiritual research to present a solution to the problems of this world. His MySpace website address is: http://www.myspace.com/wespenre.

Click on the pic to order!

Source:  http://www.321energy.com/editorials/dorsch/dorsch031408.html
 

This page may contain copyrighted material, the use of which has not always been specifically authorized by the copyright owner. I am making such material available in my efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. I believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.