by Mike Robinson
for UK COLUMN
As I write this, in a real sucker punch, the FTSE is up 10% so far today. Hooray, the world is saved!
What could be behind this insane, hysterical reaction?
One reason is that late yesterday, the FSA called a halt to short selling of financial stocks in the UK. As a result, many (t)raders have had to get themselves out of short positions. That musta hurt!
The second, much bigger, reason is that the US Treasury Secretary, Hank Paulson, in collusion with the US Congress, is about to commit an act of blatant treason.
Instead of doing the right thing, which would have been to place the system in administratrion (bankruptcy reorganisation), he has decided to make the United States itself bankrupt.
The bankers are laughing up their sleeves.
What Paulson has announced is this: he will establish a Federal agency to buy up what will amount to trillions of dollars of bad debt. The debt will become the liability of the US taxpayer. The bankers will get off scot free. The US will also insure investors in US money-market funds, which have seen significant withdrawals in recent days.
The idea is that, in a reflection of the Resolution Trust Corporation, the debt will be warehoused so that it can get the chance “for much of it to recover a portion of its value.”
But make no mistake, as far as the financial system is concerned, this will achieve nothing, other than delay the inevitable once again.
The real benefit for Paulson’s controllers, is that long held goal of the financial elites - the end of the United States, and that pesky Constitution.
What about us, here in the UK? For us, there’s the small matter of the spectre of hyperinflation which will make Weimar Germany pale into insignificance.