The Brink of Economic Crisis

this post is actually an essay i'm doing for an international relations course, it's due in a couple days and im wondering if anyone would like to put in input? i technically still have to do a conclusion and a bit of wrapping up at the end but its a pretty good read i hope you all like it, feel free to help me edit it and come up with an ending,

its pretty filled with some classic conspiracy quotes and events

“Serial killers do on a small scale of what governments do on a large one. They are the product of the times, and these are bloodthirsty times.” (Jedi Mind Tricks, 2011) It is not the structure of governments themselves which cause domestic and international horrors but the psychopaths that are often found within governments or behind the scenes orchestrating global events. The topic of this essay will focus on the unfolding concern that the global economy is on the brink of its second economic crisis in three years.

These events will be displayed as being connected from the engineering of global finance and central bankers by analyzing international actors and interactions among various levels of global entities and how these interactions have affected states, people, regions and the global community as a whole. The objective of the study of international relations is to evolve a better informed public awareness of international conduct, improve theoretical and historic understandings of global politics and advance knowledge on the manners of the twenty-first century.

This essay will focus on the international finance institutions and actors that govern international-political-economy in order to illustrate that the world is following a pattern towards increased interdependence, being led towards an agenda of global domination by elite central bankers. A historic context to the current financial system will be analyzed to provide reference for the setting that a new world order is now manifesting. The process of globalization will then be presented to illustrate the effects that one country’s domestic policy and decision making reciprocally affects the global community.

An in depth examination on the power, influence and role that global financial markets and international financial institutions possess over global affairs will be described to display the leverage these entities have over nations and global politics. The two-thousand-eight economic crisis will then be investigated, followed by an examination of the current economic climate, bringing to light the underlying connections between the two events. New and traditional theories of international relations will be advanced to explain the international political economy and recurrence of economic crisis.
The intention of this essay is to clarify the negative role and influence that international entities have played in making the world interdependently connected through a faulty financial engineered to repeated economic crises through detriment to the confidence of the economies, leading to the America crisis in two-thousand-eight and now the European Union



The current state of the world is not one that could have been imagined by previous generations. No one predicted the fall of the Soviet Union in the manner it collapsed through openness and reform from the installment of glasnost and perestroika. Since the fall of the Soviet Union the world is becoming characterized by the hegemonic unipolar supremacy of the United States, western ideologies, and global free market capitalism. In order to understand the context to which the present has arisen, history must be inspected for foundations that have led to present circumstances.

Since the age of colonialism and the discovery of the new world the earths nations have been becoming increasingly interconnected. During the twentieth century global politics would frequently change and set the stage for the future of the world. The Federal Reserve private bank was created in 1907 under the Federal Reserve Act (Board of Governors of the Federal Reserve System. 2005.), with the purpose of conducting the nations monetary policy, supervise and regulate banking institutions, and maintain the stability of the financial system.

Thomas Jefferson warned nearly a century earlier that, “banking institutions are more dangerous to our liberties than standing armies,”(1816) believing that if America had a private central bank controlling their currency, the banks and corporations would deprive the people of all their property until their children would wake-up homeless on the continent that their fathers conquered. The Federal Reserve was created by immensely rich corporate elite, including Rockefeller, J.P. Morgan, and Paul Warburg. it was written by the ninth district of the Federal Reserve that Warburg was “one of the System's architects and staunchest proponents.” (Michael A. Whitehouse 1989)

Frighteningly enough Paul Warburg’s cousin, Max Warburg helped to fund the Communist revolution in Russia, a letter sent to Trotsky states, “The office of the Banking House M. Warburg has opened in accordance with telegram from president of Rheinish-Westphalian Syndicate an account for the undertaking of Comrade Trotsky. The attorney (agent) purchased arms and has organized their transportation and delivery up to Luleo & Varde.”(1917) The Warburg’s, within the same decade, had helped to found both the Federal Reserve in America and the emergence of communism in Russia, highlighting the harmful influence of individual bankers over global politics.




Woodrow Wilson would later refer to the Federal Reserve creation ruining the country, stating in his book, “We have restricted credit, we have restricted opportunity, we have controlled development, and we have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world—no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.” (1916)

In the same book Wilson also states that an entity exists in which “Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.” (1916) He was referring to the psychopathic Central Bankers and their agenda of global domination.

President Kennedy would make an effort to remove the influence of the Federal Reserve by returning the federal government the ability to issue currency without the federal reserve by ordering the Treasury to issue silver certificates backed by silver in american treasury vaults through Executive Order 11110 (1963). More than four billion dollars in United States notes were introduced into circulation and was a viable alternative to federal reserve notes. This is most likely why Kennedy was shot in the head, similar to Lincoln who introduced the american Greenback during the civil war. Kennedy’s presidential successor would remove executive order 11110 as one of his first actions as president.

Skipping ahead in history to another great foundation to the current international financial system, from the conclusion of World War Two, the Bretton Woods System was created in order to promote global economic cooperation. The system was created at the United Nations Monetary and Financial Conference in New Hampshire with representatives from forty-five states.

three key agreements were signed at the conference, the International Monetary Fund, International bank of reconstruction which would later become the World Bank, and the General Agreement on Trades and Tariffs which would lead to the creation of the World Trade Organization. These institutions created rules for financial relations and have facilitated the integration, globalization and interdependence of global economies, causing developing countries to become shackled in debt and to sacrifice their sovereignty to agreements with international institutions.

With current economic crises even larger developed countries could be well on their way to lending money from the last resort, the International Monetary Fund. Typically a country will have to do this when they are in spiraling debt with no alternative method to gain capital, exhausted domestic capital, tax and trade revenues and no alternative lending source. Because the gold standard has been dropped and the American dollar has become the international reserve currency, the Federal Reserve has attained a monopoly over global financing by being the sole issuer of global reserves.




Flourishing economic growth was seen in most nations following the second world war, one of the greatest growth periods in history. Financial bubbles began to pop in the seventies however, the extended period of growth following Wold War Two would come to a halt. High trade deficits led to the american abandonment of the gold standard in nineteen-seventy-one, replacing the gold backed greenback with a floating currency system based on supply and demand.

The abandonment of the gold standard is strongly linked to the current economic and financial chaos and unemployment seen in developed countries in recent years. Now, just over forty years since the abandonment of the gold standard, “in seventy-one price per ounce has risen from below forty dollars to an astonishing seventeen-thousand-fourteen dollars,”(Edmund Conway, 2011) representing the inflation of the global economy from the abandonment of the gold standard.

A run on the dollar in the late sixties caused by high trade deficits and a lack of confidence led Nixon to end the gold standard; he could have devalued the dollar however in effect he chose to default on the promise of redeeming gold for dollars, making the dollar a fiat currency. A clear illustration on the effect of abandoning the gold standard is given by Bill Haynes, stating “In the 34 years before Nixon closed the gold window, the money supply in the U.S. grew less than two fold. In the 34 years after Nixon’s action, the money supply expanded 13 fold. The Fed’s massive inflation of the 1990s resulted in the greatest advance in stock market history.

Continued inflation is now pushing housing prices to record levels. Automobiles now cost more than houses did only thirty years ago.” (2005) Without a backing of gold to keep currency sound, central banks would be enabled to decide monetary policy without restriction or need of legitimate reserve. This freed America from the restraint of the Bretton Woods System of financial regulation by being able to create credit in a fiat currency system, able to print more reserve in order to pay international accounts, instead of requiring reserve ratios to lend money.

This allowed central banks to invest in whatever they wanted where ever they wanted for any price, enthralling a seductive picture of a globalized world able to maneuver around territorial boarders through unrestrained credit to direct foreign investment.(Hugo Price 2010) This unlimited credit would make a seductive influence for states that would lead to the majority of states becoming integrated and interdependent with each other through the fiat currency system, supply and demand and credit. Credit is seen by bankers as a good thing because it means means greater profits for the central bankers lending out the credit.

The eighties led the the orchestration by seductive influence of virtually unrestrained credit for international communities to remove Keynesian Economic policies, involving government intervention in the economy, to be replaced by neo-liberalist visions of removing state involvement in governments in business. This meant that production, allocation and distribution of market products would be guided by the elite corporations and central bankers with very little involvement from public institutions.

Countries who would take out major loans however would have to agree to sacrifice their sovereignty through Structural Adjustment Programs, integrating them with global financial institutions. From the combination of these neo-liberal policies, the elimination of the gold standard and interest on large loans, the last three decades of the global financing system has amassed an immense debt which cannot be payed.

In the first decade of the twenty-first century still managed to encompass economic growth as seen in the nineties, uninterrupted by serious issues until the economic crisis of two-thousand-eight, when confidence in loans were lost, which would signify the end to the world of the past three decades of neo-liberal expansion in the economy (David Mcnally, 2011, 2).  




Due to the habit of highly leveraged, risky investments two-thousand-eight became known for the housing market bubble busting, causing a global economic crisis. Many of the worlds largest firms were brought to their knees, some of the largest multinational corporations, Merrill Lynch, the Lehman Brothers, the American International Group, Fannie Mae and Freddie Mac were humbled by bad mortgage financing and real estate investments all having billions of dollars in losses. It is not obvious how these corporations are all connected, but the firms were tied together through links to risky real estate ventures with inadequate capital assets. (Andrew Sorkin, 2008)




America has still not fully recovered from the two-thousand-eight crises and the sound of financial bubbles popping is again being heard in Europe. The Dow fell 634.76 on August eighth two-thousand-eleven, the sixth biggest crash in history and the worst since two-thousand-eighth. (wall street journal historic index data) The eyes of the world are currently watching Europe expecting a financial collapse of epic proportions caused by economic downturn within PIIGS states (Portugal Italy Ireland and Greece).

Greece has been the epicenter, spiraling further and further into debt, causing shockwaves to global markets and continuously being bailed out by actors within the European Union. Significant evidence of integration and interdependence is illustrated through these shockwaves from the Italian parliament expected to pass urgent budget reforms becoming sucked into the epicenter of the euro debt crisis. (Barry Moody and James Mackenzie 20111)

Italy has a 1.6 trillion dollar debt and the largest bond market in the Eurozone however, Yields on 10 year bonds in Italy have recently past 6% and Carl Weinberg, chief economist at High Frequency Econoics, said, “If it has to pay those yields to finance itself, Italy is dead, and the sovereign crisis just blew up,” (2011) similarly Mark Chandler who heads RBC capital markets fixed income and security research reported that, “Europe can’t afford to have serious default risk expressed in Italian bonds.

It simply doesn’t have the wherewithal to protect against that or ringfence it.” (2011) Similar to the corporations that failed in two-thousand-eight, even tho Italy or other PIGGS states might not seem linked to the crisis in Greece, they are all connected by a lack of regulation to their financial investments that have lead to spiraling debt. further illustration is presented in the fact that, “U.S. banks have written about $400 billion in CDS contracts on European sovereign debt, according to the Bank for International Settlements. Those payouts would be triggered if Greece or Italy defaults. Because financial institutions are not required to report their CDS holdings, little is known about which banks or investment firms are on the hook, and for how much,” (John Schoen, 2011) this investment would cause severe repercussions in America if a default was triggered.




Sir Mervyn King outlined in the Inflation Report press conference in august, “2008 was only one stage in a far bigger crisis of confidence in the way we have structured the world economy.” (Edmund Conway, 2011) The economic crises in two-thousand-eight was substantially different than the unfolding current economic crisis, just as the dot com bubble bust was substantially different than the housing market collapse. In two-thousand eight the crises arose from integration of global markets being overly invested in faulty american private housing market firms. In contrast the current lurking financial crisis is over sovereign bonds in European states

and lacking of confidence in the European Union as a whole. Though these two events seem fundamentally different they are linked through the the designed nature of the financial system to continually expand the total amount of debt. In both situations, entities within both issues have succumb to bailouts of increased loans and debts to international banks.

and thats pretty much where i hit a roadblock at 6am last, i wrote a couple following paragraphs but not too found of them... maybe its the lack of sleep now but i was gonna continue with one of the following...

The world has been hijacked by global banking elite that have set in place international organizations to implement a global domination agenda. The historic record is unmistakable, the aristocratic bourgeoisie central bank elitists have consolidated a monopoly over the international finance systems and state central banks by controlling their reserve , and consequently through

Capitalism works in principle however the central banking institutions have hijacked the global economy through creating a faulty finance system based on the international reserve of floating American dollar. As debt increases and countries are forced to lend money from the International Monetary Fund, with impediments made to sovereignty within their boarders, central bankers will make more money and exploiting the resources of nations as they continually fall into debt.

ince the creation of the Federal Reserve and the abandonment of the gold standard in place of floating currency based on United States dollars the structure of the world economy has been based on a false monetary system leading to inflation and escalating debt and credit which has infiltrated nearly every economy in the world.

if anyone has an idea on how to flow the end of the essay please offer your opinions, i only really need a paragraph or two more and the conclusion, ill post what i come up with in the next couple days but feel free to offer suggestions and other critiques

reply to post by trust_no_one


I have 1 piece of advise, please break this up into a readable format. Insert spacing between every 4-6 lines/ end of closest sentence. I got to about 20 lines and after highlighting lines of text gave up and realised I have to put into word to make this legible. Now I will do that, cause I liked what I read so far, BUT many here will not, and your thread will be brushed off.

So don't let people be discouraged to read this because of poor formatting. A quick edit will make it more legible and attractive for people to read.

reply to post by TortoiseKweek


duly noted ill work on that now, thanks for the advice

First comment, historically speaking, these are not bloodthirsty times, just the opposite. The Iraq and Afghanistan conflicts produce far fewer casualties than Vietnam or Korea, and especially far fewer than either world war. Just a few centuries ago, there were essentially continuous ongoing wars around the globe, and relatively speaking, there were far more casualties, and the wars fought were far more brutal.

Mainly you seem to be talking about the actions of the banks, so you might want to compare serial killers to psychopaths who seek out power in large institutions.

reply to post by poet1b


i get what your saying however i i didnt want to change the quote from the song and i wanted to start with a big impact later in the essay i show how the governments are run by the same psychopaths that run the banks too so im thinking it fits

you might be right that Iraq and Afghanistan wars have far fewer casualties that other historic conflicts though i could argue all times are bloodthirsty at the very least the current times sure are unprecedented for the supremecy of the corporate vampires over the lower levels of society

reply to post by trust_no_one


Enjoyed the read, Thanks

Paragraphs, a few more commas? Some non capitals after full stops (period) so proof read once done lol.

Dont expect to get any good marks for it though lol, im sure that's not in the course content Textbooks.

Where you hit roadblock is because you have completed the opener, middle and are pacing current times, so the next bit is the most likely outcome(s) in your opinion, based on past history as you pointed, out the great depression and how things were in the 6 months before hand would be a good place to dig imho.

I also would explore the now interrelated demonstrations have become global, which has never happened so widespread before, in most capital cities in the world AT the moment people are camped out, demonstrating about this, you can use this as part of the work, and also to maybe show that what you present isnt so far from the now changing broad populations understanding of, and paradigm around the banking subject that has gone mainstream recently, personally when I talked about this stuff decades ago, people looked at me like I should be in Mental Ward, they bring me tea and cakes now when making the point lol and say " Oh I know...." lol.

WE ARE living through a big shift in awareness on this for the first time in history, the very subject you talk on is actually on shifting grounds itself beyond any "collapse" or "depression" so its not an mute point imho.

Some of the worlds best work has been done at silly o clock in the morning so dont worry bout that :-)

Kind Regards,

Elf

Originally posted by poet1b
First comment, historically speaking, these are not bloodthirsty times, just the opposite. The Iraq and Afghanistan conflicts produce far fewer casualties than Vietnam or Korea, and especially far fewer than either world war. Just a few centuries ago, there were essentially continuous ongoing wars around the globe, and relatively speaking, there were far more casualties, and the wars fought were far more brutal.

Mainly you seem to be talking about the actions of the banks, so you might want to compare serial killers to psychopaths who seek out power in large institutions.

I see where you coming from, but when I look back at people like Prescott Bush, who helped finance the Nazi's - I see both psychopath and serial killer. So how do we draw the line, and where do we draw it? I'm not sure how. As for this not being bloodthirsty times, I disagree.

Technology has enabled the US to be far superior than it's enemies, hence less casualties for the US. How many people in Iraq and Afghanistan have lost their lives due to the war?? You see where I'm coming from. Oh, and let's not forget embedded journalism. But I digress, and I'm not going to derail this thread.

OP, I liked your essay and I applaud you for your effort. If I can help you with this essay, just U2U me and I will assist where I can. (PS - But I won't do your homework for you... LOL! )

reply to post by MischeviousElf


You see, this is why I don't like reading your posts..... you make so many good points that I can't find the STAR multiplier button here! LOL!

So true in what you are saying - there is a mass awaking, and the world hasn't seen this before. It says that people are becoming aware of what is happening. My only concern is that this doesn't turn into absolute chaos and mayhem. Sadly, it seems that I may be wrong. I can only hope for a peaceful resolution.

reply to post by MischeviousElf


well like i said it is for international relations, i shoulda mentioned the actual topic is
'The global economy is on the brink of its second economic crisis in the past three years. Should these events be viewed as separate or connected? Comment on the similarities and differences between the two events. Center your discussion on what this global economic crisis might mean to issues such as interdependence and globalization?'

i mean heck it might get a little off topic from the coarse still but i couldnt help myself from going conspiracy on a topic like that, the bretton woods system, IMF globalism, gold standard abandonment, and rise of neo-liberalism in the 80's are covered in the class i just had to connect them all to central banks and the fed (which of course arnt taught in any classes ) my classmate told me he just realized this year the FED was private in his 3rd year poli sci anyhow i was thinking of adding in OWS and possible depression/collapse i technically have just over a page of room left before 10pages but i might need to say something about either a realist structuralist o4 marxist approach to international economies, tho maybe OWS revolts could add along to that just in a peaceful style than communist revolt