Remember when the U.S. was the world’s greatest industrial democracy? Barely thirty years ago the output of our producing economy and the skills of our workforce led the world.
What happened? Here’s how I would put it: our economy is on an artificial life-support system, a barely-breathing hostage in a lunatic asylum. That asylum is the U.S. and world financial systems which are on the verge of collapse. The inmates are the world’s central bankers, along with most of the financial magnates big and small. The fact is that the economy of much of the world is in a decisive downward slide which the financiers cannot stop because the systems they operate are the primary cause. As often happens, the inmates rule the asylum.
Warnings are even coming from high-flying institutional players like the Bank of International Settlements and the International Monetary Fund.
Within the U.S., foreign investors, above all Communist China, have been propping up our massive trade and fiscal deficits with their capital. To keep them happy, interest rates—after six years of “cheap credit”—must now be kept relatively high. Otherwise the Chinese, et al., might bail-out, leaving us to fend for ourselves with our hollowed-out shell of an economy. Even so, these investors are increasingly uneasy with their dollar holdings and are bailing out anyway. Foreign purchase of U.S. securities has plummeted.
Today the rank-and-file of our population must increasingly turn to borrowing in order to survive. Only the banks and the credit card companies are the beneficiaries. The total societal debt for individuals, businesses, and government is over $45 trillion and climbing. This is happening even while the real value of wages and salaries is decreasing.
The main growth factors for federal spending are Middle East war expenditures and interest on the national debt.
[Excerpt of an article by Richard C. Cook, Global Research]
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