The world waits to see what Congress will do about Dubya's $700,000,000,000 Bankster Rescue Plan. Will it approve it? Modify it? Or turn it down?
If Congress turns it down, Wall Street will almost certainly collapse.
There are many ways in which it could be modified, and I have received an interesting concept that introduces the ideas of Huber and Robertson. More later.
There is much to be said for using the money to buy back the actual houses that people are living in, and letting mortgage defaulters turn into tenants. A huge council house creation project. The Right to Rent.
I expect that in fact Congress will approve the Paulson/Bernanke plan, because they realise that a bank collapse means total global economic chaos. My prediction is that the $700 billion will go into Wall St, and after a mighty gulp and a belch, Wall St will go on to collapse just the same. Perhaps collapse isn't the right word for it. I am seeing the explosion of the Fat Man in the Monty Python film, where he had just one too many brandy snaps. Messy.
Anyway, I predict that Bush will give his bankster friends their lolly, and the money markets will still fall apart. Why? Because $700 billion is tiny. It represents 0.05% of America's total foreign (external) debt. The world economy is founded on an insane bubble of negative quantities, which is what debt is. Confidence cannot be maintained in a system that is based on something that is not there.
Debt is an inequitable power relationship between rich and poor. It causes divergence. It is an inbuilt cost into every commodity. It is how banksters make their astronomical wealth. Debt has created a vacuum monetary economy. It is a smoke and mirrors illusion. The time has come for the system to crash.
I do not relish this prospect. It is going to be painful, but necessary. An adjustment, as they say.
We can recover a sane green economics out of the ashes of this absurd, unstable system, through the Green New Deal and money based on real value, Gaian Value (see below) not on smoke and mirrors.