The End of the World As We Know It?

Glenn Stewart Coles, 9251 Yonge Street, Suite 8-924, Richmond Hill, Ontario, Canada, L4C 9T3

Text Box: On September 11, 2001 we all knew that the world had changed. As the towers came crumbling down, everyone on the planet realized that we had shifted to another level. Since then the world has quietly been at war. While everyday life continues for the average citizen, military efforts have dominated the news. Fear of terrorism allowed higher security and our freedom is more restricted. Over the past week another shift has begun. The financial crisis in the United States has started a ripple effect that could change society as we know it. In an attempt to rescue a financial giant caught up in a trail of paper losses, the US government takes over 80% of insurer AIG by investing 85 billion dollars. Creditors who want their money right away brought AIG near bankruptcy. Who are the creditors that are recalling their loans? In the same way that the banks manipulated the 1929 stock market crash when they demanded payment of short-sell loans, the crash of 2008 has been created intentionally. For over a century the banking industry has controlled the flow of money, continually seeking revenues and profits. Business philosophies have followed the same pattern, resulting in organizations that are efficient and productive while laying off staff and harming the planet. The desire to create higher return for shareholders has dominated the growth of our society. Following the old saying ‘it takes money to make money’, the rich have gotten richer every year. While the majority of humans live in poverty, a small number of people control unimaginable wealth. Though Bill Gates may be the richest man on earth, his assets are pocket change compared to the trillions managed by more anonymous faces. Our planet exists in extreme financial imbalance and things are beginning to change. The current crisis began with problems with sub-prime mortgages. In an attempt to gain paper assets, numerous mortgages were created through fraudulent means. The mortgages were then packaged with other mortgages (a process called securitization) as an asset for which shares were sold. While the problem is blamed on the realization of bad debt, the real issue is the changing of rules in order to reduce risk. In addition there is manipulation underway by large investors who are demanding cash at mortgage renewal time. Across the US, an estimated 2.5 million people are in danger of losing their homes to foreclosure this year as a result of the sub-prime mortgage crisis. Foreclosure due to the crisis? This means that the estimated value of the people’s houses has gone down and the bank plans on refusing to renew the mortgage. Though most of these families have kept up regular payments, they do not qualify for another mortgage because the qualification rules have changed. Based on its own fear of risk, the banking industry could cause its own collapse. The primary failure of the banking industry is that it exists to feed itself. As managers of money in our system, every transaction results in a fee. Money is borrowed from investors at low interest and loaned to borrowers at higher interest. Continually focused on profit, the banking system constantly changes it rules attempting to increase profits and reduce risk. Unfortunately, it is the character of banking itself that will result in its demise. Meanwhile, the US financial crisis may have impact on the entire world economy. As large mismanaged corporations reach the critical point, the US government steps in to help. Billions of dollars are spent to prop up the economy, keeping stock values at inflated prices and keeping collapsing organizations alive. Latest estimates have the US spending up to $1 TRILLION to handle the current situation. Where does all this money come from? Does the US government have a large savings account from which they draw the money? Has a foreign lender decided to give it to them? No, actually the money is simply printed. With access to their own money tree, the US calls on the Federal Reserve Bank (a private corporation) and suddenly another trillion dollars exists. Just like a company issuing new stock, the creation of new money dilutes the value of old money. The real crisis for the US (and the world economy) will come not from the increase of debt but from the devaluation of the US dollar. For decades, the US dollar has been the benchmark for international currencies; over the next year we may see its value drop dramatically. Will we see a redistribution of wealth, balancing economies around the world, or will we see a strategic move to gather more wealth by those already winning? The game has only begun. Song lyrics by the band REM state ‘It’s the end of the world as we know it and I feel fine’. With every end there is a new beginning. In order for humanity to progress there must be some dramatic shifts. The restructure of our financial system may be imminent. For a while the little guys may face even more restrictions, but in the long term the masses could benefit. Internal strength is encouraged when every citizen has a home. Eventually governments may take over the mortgage business, using finance to create their own stability. In chaos there is opportunity. © Copyright Glenn Stewart Coles, 2008 First Published September 21, 2008

Weekly Inspirations

The End of the World As We Know It?

The crash of 2008 has been created intentionally.

Reason Paying Tribute to the Emblems of Liberty and Equality

Reason Paying Tribute to the Emblems of Liberty and Equality Giclee Print
French School
Buy at AllPosters.com

The Great Pyramids, El Giza, Egypt Art Print
Koubou, Shashin
Buy at AllPosters.com

Yin-Yang Harmony

Yin-Yang Harmony Art Print
Faist, Rick
Buy at AllPosters.com

Children Holding Hands Around Globe

Children Holding Hands Around Globe Framed Giclee Print
Graphics, Dynamic
Buy at AllPosters.com