World Financial Crisis Part 5

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On Contact: Coming Unrest With David North

"David North, Chairman of the World Socialist Web Site's International Editorial Board, discusses the capitalist crisis in the US."

Mr. Magoo Mr. Magoo's picture

The usual stuff you can read on WSWS in three minutes, but now you get to watch it for 27 minutes.


I am short on time, we headed for a bad time indeed.  Can I tell when I no idea, but I tell when the unmasking of our debt global situation occurs?  There some extremely powerful people that believe the business cycle is no longer with us.  The business cycle is the boom and bust cycle in capitalism, for me this is primarily law of capitalism.  A recession is coming it be big one, the reason the world is not hard recession is the world central bags injecting money/debt into the global system. When that support from US,Japan,Europe, China ends will go into recession.  

I have be somewhere in 45 minutes, but when I get back I will talk mechanics of recession as I see them.


I remember as a young man after university bouncing around 2 to 3 years working at certain factories.  Let describe I saw.  

Year 1- My friends and most were buying new cars some were buying homes this a younger crowder and new people to factroy environment.  I noticed older generation somewhat less likely spend like younger crowd.  They saw the strikes and layoff, they rode the business cycle multiple times for the most.  They were less likely spend but after of goods times, wages raises, etc caution was naturally curtailed.

Year 2.   Press reports were talking about credit was getting harder to abtain, interest rate were going up.  At that point I had no idea what bond market was.  And the significance of bond rates going up.  But I feeling the economy was slowing.  I felt that is was a good time to go back to school and able to get federal government retraining program in hand.  But I know those people I said goodbye to, those with low seniority would gone in 8 months to 18 months will be on layoff.  For many they would face hardship and debt collecters will be calling.  This the end of the of that business cycle and cycle will start again.

A recession would come.  For me to mechanics of cycle can be described as the action of a rubber band.  Need sleep. More later.


The Collapse of the ETF market this week (95%!!!).....this is the derivative trade based on volatility in the stock markets....Not only is this is the defining factor heralding the collapse of the global financial bubble....
I recall people wondering when my sold called imminent collapse theory would be realized...well it´s now happened...and as the collapse of the subprime mortgage derivative trade in 2007 ushered in the economic chaos of 2008 requiring over 23 trillion to stabilize the system, this time the effect will be short and without the reserves of the global banking system to stabilize. The Central Banks tried to adjust their rates for such a scenario as this...but they´ve run out of time! The fix is now in....maybe a few months to a year to percolate through the economic system...

Now is the time to prepare...politically!!!


Even a dead clock is right twice a day. Stock markets go up, stock markets go down. Comparatively speaking life is a piece of cake in North America, and those complaining about it here, need to spend some time living elsewhere, to realize how good we have it here. 


NorthReport wrote:

Even a dead clock is right twice a day. Stock markets go up, stock markets go down. Comparatively speaking life is a piece of cake in North America, and those complaining about it here, need to spend some time living elsewhere, to realize how good we have it here. 

I heard similar from you NR about clock/watch, after searching I found my rebuttal.   Oldie but a goody.

Wed, 2017-05-24 03:04

(Reply to #10)




NorthReport wrote:


And how many years have we been hearing this now?

After all even a stopped watch tells the correct time twice a day!



That is certainly good question, but I will split your question to into 2 parts.  Its dependent on your economic belief.

1.Do you question the existence of capitalist business cycle(recession and boom).  This is standard fare for even capitalist economists.  Look up the business cycle in a google search.

a.  I believe in the business cycle  >>>>>  Jump question 2.

b.  I don't beleive in the business cycle.  A recession can be kept at bay for a indefinite time.  History seems to agrue agaisnt this point of view.  Refer to article below.

The chart in article is very powerful exhibit for existence of the business cycle.  When article was written the US was in the 84th month economic expansion.  That means the US in the 94th month expanison today.  3rd longest expansion in the history of the US, in 2019 the US would break the record of 120 months expansion.  Can the US set a record, I not idea.  But that is not the important question, the fact is a recession is coming.  Be it 6 months from now or 6 years from it will happen.

Question 2.  How bad will the recession be.  This debateable.  My personal thoughts on the matter are buttrested by 2 factors.

a.  Debt-  Generally speaking during during a recession debt is destroyed. For example a business or individual go thru bankrupcty, you as indivudual or business which effectively nullify claims ago you.  This of course does happen to everyone but most people buckle down and spend less and try to pay debt off.  If people are losing there jobs and business are closing it makes one naturally wary of spending.  The interesting thing is once you go thru belt tightening and/or bankrucpty you are ready to spend ago and partcipate in the business cycle.  Claims are agaisnt are gone and you get a free start as a cog again it the capitilist cycle.  From the capitalist point of view you have capacity to borrow again and spend again.  Much better than weighted downed by debt which curtails spending.  If things get out of hand a depression is possible.  And the cycle repeats itself. Leverage up and Leverage down followed by Leverage up.

I went thru narrative that is clinical in nature, but process on human beings is one of struggle and pain. 

b.  Government response-  Generally speaking modern governments want to stay in power so they try temper the effect of the cycle above.  Monteray response means that the central back will intervene agaisnt the cycle but lowering rates and print money.  To jumpstart the economy.

In the old days there fiscal reponse(Kenyism), direct spending or tax cuts into the economy by the government.  This still used by the governments but oppossed by conservative thinkers.  And off course buffers like EI and varoius welfare schemes saidly these ideas have been effectively demonized by the right as useless spending.  But in a captialist system they used to provide 1) A buffer to the magnatude of develaging and 2) A scheme of social control to keep the status quo going, desperate people in a democracy can hinder the smooth operation of the capitalist system.  Keep those nasty thoughts of class and where you begin in the economic order in check.

3.  I have talked about the American economy why is this revelant for Canada.   While the US effectively can resist a recession in Canada can not resist a American recession.  The US economy is still largely indepentent of the effects of the world on it.  Last time I checked the US imported 15 of its GDP and exported 10 of its GDP.  Canada has a much more globalized economy with 33 to 36 of the tied to GDP with exports and imports.  With 75 of the exports going to the US.  Its getting really late, so the US buys arounds 25% of other yearly prodcution(GDP).  The important thing is a US recession will drag canada into the mess.


Even a dead clock is right twice a day. Stock markets go up, stock markets go down. Comparatively speaking life is a piece of cake in North America, and those complaining about it here, need to spend some time living elsewhere, to realize how good we have it here. ...

...this is kind of amusing, as I do live outside Canada in a so called thrird world country...and I can assure you that the people I work with in the tens of thousands are well prepared for the financial implosion to come......

of course you missed the point...I was not talking re markets so much as the collapse of the derivative trade holding up the system!



Swan Song Of The Central Bankers, Part 1: Last Week Wasn't A Mistake

Profile picture for user Tyler Durden

by Tyler Durden

Tue, 02/13/2018 - 10:21




Authored by David Stockman via Contra Corner blog,

Last week's twin 1,000 point plunges on the Dow were not errors. Instead, these close-coupled massacres, which wiped out $4 trillion of global market cap in two days, marked the beginning of a bear market that will be generational, not a temporary cyclical downleg.

What hit the casino wasn't an air pocket; it was a fundamental change of direction, signaling that the three decade long central bank experiment with Bubble Finance has now run its course.


Financial Times; Higher bond yields fail to arrest an ever-weakening dollar

...this means an inflationary trend in the States, what with their deindustrialization/ globalization, import export deficit with China...forcing continued higher bond and treasury rates, mortgage rates and increasing corporate`s called checkmate for the financial system


January Pending Home Sales Crash Most Since 2010 by Tyler Durden Wed, 02/28/2018 - 10:09

After New- and Existing-Home-Sales have already disappointed, Pending Home-Sales just collapsed too (to the lowest since Oct 2014) to confirm January was a bloodbath for the real estate market.

Pending Home Sales plunged 4.7% in January (massively below the 0.5% expected rise in sales) - this is the biggest drop since May 2010.......

.....what with increasing mortgage rates, central bank rates (US) due to inflationary pressures, (waiting for the trade wars with China and massive inflationary effects!)...this is just a taste!

The collapsing real estate market will blow up the economic system!


So the answer to this oligarchial problem is war. Preparations, especially a massive pre-war propaganda/ demonization campaign are well underway. Many  'progressives'  that should be opposing are enthusiastically  onboard or 'keeping their heads down', (a particular speciality of the Canadian contingent). As billions more in precious public resources are allocated towards this war-effort, expect the awful reak of collaboration and complicity to only grow. 


So with the trade wars beginning, (meaning increasing inflationary effects throughout the economics, meaning increasing rates everywhere, increasing bankruptcies everywhere!), the VIX indicator way up...(meaning the ETF derivative index based on gambles on volatility etc.), the Japanese Central bank preparing to end its Quantitive Easing, expect further cataclysm in the markets today and going forward...we are sleepwalking to disaster here! Surely someone up there is aware?


Of course they are... That's why the Bank of Canada sold off all of its gold reserves recently. 'Stupid is as stupid does.' 

Trump Launches Trade War

"US President Donald Trump has taken a major step toward launching an international trade war by slapping a 25 percent tariff on steel imports and 10 percent on aluminum..."

Colonizing The Western Mind

"On the left, the ruling ideology might be described as neoliberalism, a particularly vicious form of imperial capitalism that, as would be expected, is camouflaged in the lineaments of humanitarian aid and succour." 

Mr. Magoo Mr. Magoo's picture

That's why the Bank of Canada sold off all of its gold reserves recently.

Yes, prior to this they held 100 million in gold reserves, or approximately 3.5 days of Toronto's budget alone.

That's right.  Enough gold to run Toronto for four days and three nights.


Yes, they went from sweet f**k -all  to nothing. As previously stated. Stupid. 

And Then There Was None: Canada Sells Its Gold

"Canada, bucking an international trend that has seen central banks become net buyers of gold since 2010, has sold off all its official gold holdings. This is unprecedented. Canada now stands as the only G7 nation that does not hold at least 100 tonnes of gold in its official reserves." ( In 1965 it had over 1,000 tonnes. At $1,685.00 per ounce, you figure it out.)

Mr. Magoo Mr. Magoo's picture

That must be a terrible setback for all those monetary-reform k00Ks who lost their minds when governments shifted from gold currency to fiat currency.

Me, I'm just glad they didn't opt for "tulip currency".  Gold was mentioned in the Bible, so it must be special.  And, it can be used for plating the connectors on an HDMI cable!  Then you can charge double for that cable, and stimulate our economy!


Where Will It Stop?": Libor Spread Blows Out Beyond Eurocrisis Highs, Central Banks Intervention AwaitedThis morning's 3M USD Libofixing jumped higher for the 27th consecutive session, rising to 2.2018% the highest since December 2008. 

Compalceny abounds! Let´s Total Financial and Non finacial debt now at 500% of GDP in the States...a rise of rates to 5% would mean that 1 of every $4 GDP must be paid in debt...will it go up to 100% before people pay attention?

100% means of course no income neither for corporates, nor people...maybe people can learn to eat their credit notices?


Don't worry, we are assured by US media that Trump's new economic advisor Larry 'Kuddles' Kudlow, who replaced the Goldman Sach guy before him, and admitted to a $100,000 a month coke habit in his past and who considers Trudeau 'a leftwing crazy guy', has a plan and will fix all...When it all falls it'll go fast and it looks like that time is close.

Global Capitalism: Cut Taxes, Deport Immigrants, Impose Tariffs

Richard Wolff, Prof of Economics