Obama's New World Order

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By Stephen Lendman (about the author) Page 3 of 6 page(s)

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No matter. Predator banks want to prolong the game as long as possible, grab all the wealth they can, force debtor nations to sell state enterprises at distress prices, then get new business by lending to investors who buy them on the cheap. Will it work? Only if targeted countries go along. In the case of Iceland, its very future is at stake.

Sound v. Imprudent Banking

For centuries, banks created credit responsibly - loaning money for sound investments to debtors able to repay with interest. No one imagined a world like today's with massive defaults occurring globally. In America, one-third of home mortgages are in "Negative Equity;" that is, "the mortgage exceeds the (property's) market price pledged as collateral."

US national debt tripled in one year, from $5 - $15 trillion, and according to some economists like John Williams, it's much higher under GAAP accounting - including unfunded liabilities around $65.5 trillion, an amount exceeding world GDP through FY 2008, meaning America is bankrupt. Williams also puts unemployment at 19.8% by reengineering it to include discouraged and involuntary part-time workers and excluding fictitious birth-death rate ratio inclusions.

Blunt Truths about the "Dismantling of Industrial Capitalism"

Instead of extending credit to construct and grow them, financial oligarchs turned indebted nations into "casinos (through) debt-leveraged gambles," redistributing wealth upward and creating "debt peonage for most citizens." Even in America, nearly half the population has no net worth, and the gulf between richest and the rest is unprecedented.

"This is the unfair system that the world's top creditors would export to Iceland - if they can convince its voters (and leaders) to accept neoliberal debt pyramiding as a way to get rich." It's not working throughout post-Soviet states that see it as the road to hell, if public riots are a gauge.

"Better alternatives (are) the only defense" as it's impossible for "astronomically indebted economies to 'work their way out of debt.' " Trying will "collapse the currency's exchange rate," divert huge amounts of revenue and property to creditors, and produce "a new kind of post-capitalist (unjust, unsustainable) non-production/consumpton economy" too gruesome to imagine or tolerate.

Iceland's financial crisis is the result of lawless predation, an "international (austerity demanding) Ponzi scheme" under rigged market rules imposing public and private "asset stripping" to pay debt. A simple scheme transfers wealth.

Economies and populations are trapped on a "debt treadmill from which there is no escape. (Lenders) pile on credit and let debts grow (through) the 'magic of compound interest,' knowing that loans cannot be repaid - except by asset sell-offs." They're strip-mined through unending debt service so the parasite keeps feeding on its food source. The idea is to get it all, leaving empty hulks behind, then on to the new victims. It's "euphemistically dubbed post-industrial wealth creation," the kind that's collapsing economies globally and destroying people. Obama is commander-in-chief of the process.

America as Lead Predator

It's a viciously ugly scheme that's "trapped other countries into a nightmarish system in which (they're practically forced) to recycle their excess balance-of-payment dollar inflows back to the US," mainly as loans to the Treasury.

"When foreign central banks receive dollars for their exports (or asset sales)," their choices are limited. "Congress won't let them buy important domestic companies or resources," or get paid with US gold reserves. The alternative is buy Treasuries and mortgage-backed securities like Fannie and Freddie debt.

Icelanders and other nations must remember that America is the world's largest debtor, and as Adam Smith explained in The Wealth of Nations - "no nation ever repaid its debt," and he never envisioned one large as America's. We grow it by issuing paper for real assets and services. Until other countries demand more than confetti, this "Madoff-Ponzi scheme" will persist - for tiny states like Iceland (population 319,000 as of January 2009) until nothing is left to hand over.

Today's road to riches isn't through capital investment. It's by "foreclos(ing) at pennies on the dollar and mak(ing) 'capital gains' by flipping property onto (central bank-inflated) world financial markets." In a word, socializing risks, privatizing profits, preying on the weak, and getting "a free lunch" at public expense.

It's a zero-sum game. One side's gain is another's loss, and when it matches America against Iceland, it's easy exerting pressure, but no certainty it'll prevail. As a sovereign state, Iceland can choose. More on that below.

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I am a 72 year old, retired, progressive small businessman concerned about all the major national and world issues, committed to speak out and write about them.

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