NZ financial SITUATION 2019

USA FED JUST KEEPS ON PRINTING MONEY ----

But whats the future look like as USA GETS FURTHER INTO DEBT

Who will finance a US budget deficit forecast to swell to$2.5trillion thisyear? US Federal Reserve chairman Ben Bernanke answer: the central bank itself will buy $US300 billion of US Treasury bonds and pay for them by printing the money.China's Premier Wen Jiabao is now worried about the safety of China's $US740 billion holding of US Treasury securities even more now Washington will end up using inflation to "monetise" away huge debts.

The Fed can only play a delaying game. Underlying the crisis is the huge black hole in the global financial system. Some say losses in the system of $50 trillion will occur, of which $30 trillion will be incurred by the US and the rest by other institutions worldwide. So what happens if the US dollar falls 40-50 per cent? easy many central banks will be losing huge amounts of money. But central banks, including Asia's Banks, are facing a dilemma as to what assets they should hold. The dollar is no longer safe, nor is the euro, which will also be hit by the recession. The yen is also tied up to the US. The Chinese yuan appears to be safer, yet China has yet to allow a free float of its currency. The Chinese leadership is very nervous over its huge dollar reserves and assets holdings. It now holds the world's largest reserves, at over $2 trillion.The Chinese monetary authorities are seeking to unwind their dollar positions in an orderly way to avoid disrupting the financial markets and have turned to buying in Japan.

But whoi is to blame. Its the banks themselves which got us into this situation. Instead of limiting their role to straight lending or providing financial products that are simple to understand and manageable, the banks and their financial heads went on a borrowing binge to leverage their balance sheets in order to maximise profits from trading and investment. The global banks and funds control most of the financial resources of this world. They issued crazy instruments, raised money on their own, invested money for their own gain and their were no brakes in place. They had absolutely no regard for the public's deposits, which they used freely to leverage their investments to eventually they had to seek help and this is the problem we are facing. TOTAL GREED yet after the factb these banks and financial institutions can still pay large bonuises to themselves for the delemna they have caused.

Quote: George Soros:

The New York Review of Books June, 2011 

I passionately disagreed with Treasury Secretary Hank Paulson’s plan to bail out the banks by using a public fund called the Troubled Asset Relief Program (TARP) to help banks take toxic assets off their balance sheets. I argued that it would be much better to put the money where the hole was and replenish the equity of the banks themselves. I worked closely with the Democratic leadership in Congress to modify the TARP act so as to allow the money to be used for the purchase of equity interests. I had many other ideas that I hoped would be put into practice when Obama became president, including a fundamental reform of the mortgage system, but that did not happen. I published a series of articles in the Financial Times but got little response from the Obama administration. I had many more discussions with Larry Summers before he became the President’s economic adviser than I did afterward. My greatest disappointment was that I was unable to establish any kind of personal contact with President Obama himself. 

The election of President Obama in 2008 sent a powerful message to the world that the US is capable of radically changing course when it recognizes that it is on the wrong track. But the change was temporary: his election and inauguration were the high points of his presidency. Already the reelection of President Bush had convinced me that the malaise in American society went deeper than incompetent leadership. The American public was unwilling to face harsh reality and was positively asking to be deceived by demanding easy answers to difficult problems. 

The fate of the Obama presidency reinforced that conviction. Obama assumed the presidency in the midst of a financial crisis whose magnitude few people appreciated, and he was not among those few. But he did recognize that the American public was averse to facing harsh realities and he had great belief in his own charismatic powers. He also wanted to rise above party politics and become—as he put it in his campaign speeches—the president of the United States of America. Consequently, he was reluctant to forthrightly blame the outgoing administration and went out of his way to avoid criticism and conflict. He resorted to what George Akerlof and Robert Shiller called the “confidence multiplier” in their influential book Animal Spirits. Accordingly, in the hope of moderating the recession, he painted a rosier picture of the economic situation than was justified. 

The United States has been a democracy and open society since its founding. The idea that it will cease to be one seems preposterous; yet it is a very likely prospect. After September 11, the Bush administration exploited the very real fear generated by the terrorist attack, and by declaring “war on terror” was able to unite the nation behind the commander-in-chief, lead it to invade Iraq on false pretenses, and violate established standards of human rights in pursuing and interrogating terrorists. 

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