The Engineered Economic Collapse

Global Financial Crisis

December 11, 2010

globalissues.org - Following a period of economic boom, a financial bubble—global in scope—has now burst. The extent of this problem has been so severe that some of the world’s largest financial institutions have collapsed. Others have been bought out by their competition at low prices and, in other cases, the governments of the wealthiest nations in the world have resorted to extensive bail-out and rescue packages for the remaining large banks and financial institutions.

Some of the bail-outs have also led to charges of hypocrisy due to the apparent socializing of the costs while privatizing the profits. Furthermore, the institutions being rescued are typically the ones got the world into this trouble in the first place.

For smaller businesses and poorer people, such options for bailout and rescue are rarely available when they find themselves in crisis. There is the argument that when the larger banks show signs of crisis, it is not just the wealthy that will suffer, but potentially everyone because of the ripple effect that problems at the top could have throughout the entire economy.

Plummeting stock markets have wiped out 33% of the value of companies, $14.5 trillion. Taxpayers will be bailing out their banks and financial institutions with large amounts of money. US taxpayers alone will spend some $9.7 trillion in bailout packages and plans. The UK and other European countries have also spent some $2 trillion on rescues and bailout packages. More is expected. Much more.

Such numbers, made quickly available, are enough to wipe many individual’s mortgages, or clear out third world debt many times over. Even the high military spending figures are dwarfed by the bailout plans to date.

This problem could have been averted (in theory) as people had been pointing to these issues for decades. However, during boom, very few want to hear such pessimism. Does this crisis spell an end to the careless forms of banking and finance and will it herald a better economic age, or are we just doomed to keep forgetting history and repeat these mistakes in the future? Signs are not encouraging as rich nations are resisting meaningful reform…

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Bernard Madoff Says Banks Knew of Ponzi Scheme

February 16, 2011

BBC News - Convicted fraudster Bernard Madoff has blamed others for being "complicit" in his scheme, which fleeced investors of billions of dollars.

Madoff is serving 150 years in jail in the US for a $65bn (£40bn) fraud which deprived thousands of investors of their savings.

Now he has told the New York Times a variety of banks and hedge funds "had to know" about his Ponzi scheme.

Such schemes pay out using new investor money rather than from any profits.

Madoff claimed banks and hedge funds who had dealings with his investment advisory firm showed a "willful blindness" toward his activities.

He also alleged they failed to examine discrepancies between his regulatory filings and other information.

"But the attitude was sort of, 'If you're doing something wrong, we don't want to know'," he said.

However, he did not assert that any specific bank or hedge fund knew about or was an accomplice in his Ponzi scheme.

His scheme had been running since the early 1990s.

It unravelled when Madoff's investors, hit by the economic downturn, tried to withdraw about $7bn, but he could not produce the money.

Madoff also told the New York Times that his family knew nothing about