Equitist
Gold Member
Offline
Australian Politics
Posts: 9632
NSW
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Indeed, some form of Govt stimulus was an essential circuit-breaker as the first of many GFC crises unfolded - and the Australian Govt's response was appropriate overall. However, I remain concerned that the American knee-jerk response was inherently ill-conceived and risky - and that it has simply delayed the inevitable mega-crash which is yet to come...
Notwithstanding that a GFC was predictable, in the context of unprecedented polarisation of income, wealth, opportunity, power - and debt...from the early days of the GFC, it was clear that: the severely under-regulated banking and finance parasites, who had made squillions in ill-gotten gains in the previous decade or so, were being propped up at the expense of their victims...
The toxic debt, that was underwritten by the US Govt and Federal Reserve, had been largely written under unfair contracts in the first instance - and repeatedly onsold under similarly dubious contracts, with successive parasites siphoning-off a cut of the artificially-inflated securities at every stage...
IM(not-so)HO, the US (and other Govts) lacked the necessary courage, to place the onus on the beneficial holders of these toxic loans to PROVE that good faith and due diligence had been exercised at every step of the way - and therefore that each and every one of the original loans were fair in the first instance. If the holder/s could not prove the legitimacy of their claim to enforce the original loan on the borrower, then the loan should have been written off, with the ownership of the associated asset automatically transferred to the borrower.
I know that the problems are complex and therefore that this approach would have created considerable turmoil - but the insult to the global community would have been once-off and the costs and risks to Govts (and their innocent citizens) would not have continued to compound over time. As things stand today, Govts have become severely indebted, to prop up unscrululous boards, executives and corporations while punishing their victims twofold - with the risks ongoing and even escalating.
Meantime, with the subsequent market bounce-back, their board members, executives and shareholders have been given an extended period of time to manipulate and/or ride the waves of market highs and lows so as to stealthfully liquidate (and, probably in many cases, offshore) their Govt-preserved assets at the expense of unwitting small-medium-time investors who have been lulled into a false sense of security and may yet loose everything...
The underlying systemic problems, of under-regulation and polarisation, have not been solved - and there has been no attempt to restore a semblance of progressivity into the tax systems that facilitated the exponential polarisation of income, wealth, opportunity, power and debt that predictably precipitated the GFC - rather there is ongoing talk of oxymoronic 'austerity measures' that will simply be a self-escalating injection into the downward spiral...
When the mega crash does come, it will hit in record time - is likely that us Aussies will wake to the news that: overnight, all stockmarkets have been placed in an indefinite trading halt and that all banking and financial institutions have stopped processing all financial transactions and shut their doors pending Govt intervention...
I, for one, will not be surprised if this occurs in the near future - what do others think?
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