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Chapter 7: What can be saved?This is a puzzling and perplexing question. The one thing that most of the leading edge financial newsletter writers agree on, is that the 'market' cannot be saved by any means. They differ only in their response to this perception. One writer suggests that the stockmarket will collapse in stages with minor rallies in between, that cause people to be hesitant in getting out, or which will drive them to reinvest too soon. Others see a rapid collapse. One writer sees the stockmarket opening one morning with the Dow 1200 points below the day's closing, which is sure to cause a 'carnage' that cannot be stopped by artificial stimulation. Another of the writers suggests that the Dow will drop 5000 points, before that dust settles. Most of the newsletter writers tell their subscribers that there is a fortune to be made in this collapse, by shorting the market, as many already do. Advisory services are offered as an "aid" for maximizing this bonanza, for a $5000.00 annual subscription. These "aids," and there are many of them offered, are offered to help investors short the bond market, or the stockmarket, or to speculate on interest rates and gold prices. Some of these services are advertised as a sure bet, which some be. Inflation is most certainly going to hit the markets as all the major currency centers of the world, including Germany, Japan, and the U.S.A., are printing money on 'high speed' presses. Japan has begun to increase its money supply at an annual rate of 20%. This built in 20% inflation, as the growth in money supply far outstrips the 2% return that the economy generates, makes currency speculation appear like a sure bet. Except, when it comes to collecting on the bet, even the winners will go empty handed, as there not enough liquidity in a disintegrating system to pay out the sure bet claims. Perhaps it may be hoped by the private regulators of the currencies that their flood of new money will save the market from its impending collapse. In the short term it seems to do this. Except, the global reaction to this global crisis alters the reality of how liquidity is perceived. The problem is, that there isn't enough money in the universe to satisfy all the currently outstanding financial claims without the leveraged betting factored in. This liquidity crisis has been building up in the fictitious value system for over 15 years. It may be possible for a few investors to get out of the stock and bond markets before the great collapse begins. Indeed, many of the big brokerage houses and institutional investors are pulling out of the stock market, while the public is enticed to rush into the market and throw evermore money at it. Today's final rally of the greatest 'glory' days in the history of the stockmarket is evidently designed to finance the big boy's exit out of the game. The game will soon end and leave the general public to hold the bag when values tumble. The public's fortune, thus, cannot be saved. The last 'investors' to hold the bag will find the bag suddenly empty. Unfortunately, those will be the ones who can least afford the loss. The greater tragedy is, that whatever is keyed to this market will likely suffer the same fate. Just as it had happened back in the 1930s. A bank holiday may once again be declared, as values tumble, after which many a bank will never reopen. It is unlikely that today's government deposit insurance programs will make the scene any different than it was in the 1930s. The government's deposit insurance programs are designed to address isolated bank failures. They are meaningless in a systemic collapse where the losses become infinitely greater than any governments ability to offer compensation. Lyndon LaRouche projects that in a systemic collapse entire segments of the economy begin to shut down, most of which are at a precarious state even now, as the result of the globally bankrupt world-financial system. By the same token, not just the share values will disappear, but many of the companies that are traded, will vanish off the boards, never to be seen again. With this, whatever is left of employment will vanish, poverty will increase. The people will die as the result thereof. || - page index - || - chapter index - || - Exit - ||
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