G20 - the possible end of world independence
Citibank and JP Morgan have been profitable in the first two months of 2009. The markets are recovering and the banking sector is leading the rally.
The worst is over – or is it?
Are there hidden reasons for the manipulation of the markets by whispers and insider information in order to change the psychology of the people, especially the members of the G20 for their meeting in April? Is that behind all of the urgent telephone calls and meetings including the first call from Obama to Cristina Kirchner of Argentina and the false eulogies?
If there is still no real understanding of the crisis and especially the fact there is still no generally accepted explanation of the 1930s depression then how can they have confidence in the recovery and a renewed stability of the 1st world financial system?
The answer is there cannot be a recovery in this timescale, or any time in the next few years, because a large part of the 1st world economy and the very major part of its tax income was dependent on ‘increasing’ increases in personal sector lending that had to continue to be spent with confidence in the economy in sectors with high elasticity, and also the effects of the recent and continuing unemployment have not been felt. This sector of the economy, which includes construction, auto manufacturing, restaurants, holidays, retailing and services including financial services, has been built up over 25 years since Financial Deregulation. The 1st world has increasingly spent its money in sectors that have no continuing economic value and this has produced distorted economies with salary levels, employment levels and personal lending that are now far too high and the prospect of continuing or new commercial deficits for the majority, including Germany and Japan. Equity values cannot survive in this environment with low economic activity, high costs and little confidence.
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G20 - the end of world independence | open Democracy News Analysis