It feels like the summer of 1931. The world's two biggest financial institutions have had a heart attack. The global currency system is breaking down. The policy doctrines that got us into this mess are bankrupt. No world leader seems able to discern the problem, let alone forge a solution.
The International Monetary Fund has abdicated into schizophrenia. It has upgraded its 2008 world forecast from 3.7pc to 4.1pc growth, whilst warning of a "chance of a global recession". Plainly, the IMF cannot or will not offer any useful insights.
Its "mean-reversion" model misses the entire point of this crisis, which is that central banks have pushed debt to fatal levels by holding interest too low for a generation, and now the chickens have come home to roost. True "mean-reversion" would imply debt deflation on such a scale that would, if abrupt, threaten democracy.
The risk is that these same central banks will commit a fresh error, this time overreacting to the oil spike. The European Central Bank has raised rates, warning of a 1970s wage-price spiral. Fixated on the rear-view mirror, it is not looking through the windscreen.
what to do... what to do? tried the game show giveaway twice and the results speak for themselves. maybe someone will call in the fixers?
If there's something weird in the financial world, who you gonna call? Goldman Sachs.
The US government, involved in a firefight against the conflagration in the credit markets, is calling in another crisis-buster from the illustrious investment bank, this time Goldman's most senior banker to finance industry clients, Ken Wilson.
And so with this appointment, the Goldman Sachs diaspora grows a little bit more influential. It is an old-boy network that has created a revolving door between the firm and public office, greased by the mountains of money the company is generating even today, as its peers buckle and fall.
Almost whatever the country, you can find Goldman Sachs veterans in positions of pivotal power.
wouldn't hold my breath on that one, as there are far too many that, continually ignoring the most crippling effectuate in the form of two illegal nation-building occupations and the accompanying sabre rattling for more of the same, have no realistic idea of who threatens them the most.
Nukes or no nukes, Iran threatens me less than the Fed, Congress, the US media or the president.
When the history of the late, great nation known as America is written, our own homegrown jackals will be rightly blamed for the destruction. Forgotten will be the nineteen G-string jihadists with their Korans and boxcutters. If the history books are honest and the historians adroit, the blame will lie less with the Taliban and more with the Ivy League educated in their tailored suits and power ties.
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