Tuesday, 10 February 2009


This is a final "push" on views about the credit crunch and how it will affect the world beyond recognition. So far the solutions put forward to resolve it are part of the problem.
How it all started:
  1. 30 years ago financial products and accounting techniques were taking their time to mature. Silly Money was a small part of the economy and we lived a mostly creationist life.
  2. New products arrived, derivatives, funds, hedge funds... all generating Silly Money. Banks started cashing in. Evolutionism arrived.
  3. The internet arrived. Dealers and deals were multiplied by 100. Banks cashed in, governments cashed in, people in the loop (with capital) cashed in. Banks became investors with stakes in countless companies doubling and trebling their Silly Money, transforming it in "assets".
  4. Then, 8 years ago, financiers could wait no longer for time. The BS formula became the main tool and guess what; they cashed in even more as in 3.
  5. The world was awash with cash. But there are so many Ferraris you can buy (waiting lists extended beyond recognition), Palmira Islands, duplexes, triplexes, spas and branded clothing. High end creationism could not meet the demand. Still, banks needed to get rid of cash as they do. So they came out the loop, passed it on to the...
  6. ... middle classes. Everybody with a salary upgraded house, car, TV, HiFi, PC, IGadgets with credit. Everybody maxed their multiple credit cards.
  7. There was no one else to offload the Silly Money. Oh yes there was... NINJ, no income no job people aka as the poor. They got money against... houses.
  8. One fine morning, when arriving at their dealing rooms, financiers noticed that all computer screens were on "fireworks" mode, this time of the red kind. The decline was fast and banks blamed... the newest debtors... the poor, a bit like blaming goats for desertification after land being ravaged by intensive agriculture followed by cattle and then sheep. The same original intoxicating financial products were rebranded "toxic".
  9. There was no more Silly Money; even Real Money was not enough. Banks collapsed.
The End.

Yes it was the end of the biggest pyramid scheme/scam in modern history. But not to worry as there is no evil mind behind it, there is no Dr. No or even a laughing Dr. Strangelove (why are most baddies... Doctors?) with bank accounts in Liechtenstein or Cayman or Monaco showing a balance of $25 trillion ready to buy the world... twice! And there is a solution for this.

Some notes to President Obama

There are a few solutions that may save the USA, the UK and the world. What an easy task ahead! So what to do, what to do?
Stop! Stop Finance working for at least two weeks. No share dealing, no mortgages, no foreign exchange, no commodities. Freeze everything including interest and give the biggest Bank Holiday(s) ever. A hint though... only announce this after the US markets close around 9 p.m. in words like "This is an emergency and I have decided to close all finance trade with immediate effect!" Then, during this period take a deep breath and work hard by choosing at least 2 of the next solutions.
  1. War. This is the easiest solution and it has been used to great effect in the past. It is the best way to "balance" the books, to get rid of creditors and debtors. It also generates a 100% creationist economy called "war effort", people die, leaving more room, more houses, more land. A few countries have done in the past to great effect, Germany crops to mind, Imperial France, Imperial Britain, the Roman Empire, Yugoslavia, Rwanda, Iraq; pity this time there is no specific ethnic group to blame in the Western Financial Services, that could have been very "helpful". Can you imagine a world without Hitler, Napoleon, Haig, Julius Caesar, Milosevic, Saddam Hussein, Genghis Khan?... Even President 43 unwittingly postponed the credit crunch for 3 years by... going to war in Iraq. If we were in a different era I could say that the "ripest" country to start an "attrition" is Italy. It has the failing books and the "adequate" leadership.
  2. Change currency. This works! It was the Euro in 2002 that gave Continental Europe a good cushion to survive the credit crunch. They got loads of spare change by materially printing new money as a good amount of briefcases filled with Deutsche Marks, French Francs, Dutch Gulden, even Spanish Pesetas and Italian Lira got lost. No one swapped the cash for the new currency, either forgotten under floorboards, forest dugs... A few individuals could not go into a bank with the cash without going to prison next. In the process a few! billion were not exchanged, which literally paid for the entire process. However this went against the US Dollar and the British Pound as all Silly Money dealing was transferred for a long while into these two currencies. When the euro stabilised Silly Money kept on being generated in this way (USD and GBP). Changing the dollar for dollar i.e. new notes and coins could bring a FREE $300 billion to the US economy. The UK has a simpler solution... joining the Euro. Ah The US could also join the Euro for... a limited period (say 10 years?). That would make the ultimate cleaning process.
  3. Inject more money into the system... $900 billion. It will make a difference for 8 months. It will be spent in 8 months though.
  4. Default! This is my favourite. The US should default on its debt saying "We owe $20 trillion? Well we are not paying it!" Russia did it 10 years ago and no one bat an eyelid. Why is this the best solution? Suddenly the creditors would come out of the woodwork. We would know who they are and what they did and how they did it. We would know how they got the money. We would know how much is outside stacked away. We would know if there is a Dr. Strangelove, Dr. No, grey corporation, if there is some master plan. In my view there is no such person, only crass financiers, monopolist Finance regulations and an appalling widespread use of the Black-Scholes formula, the BS formula which is wrong! You would be surprised when the final list of "creditors" at your door would request... a couple of trillion only? Then the world could start again. Ah by the way... you could include in this process the entire Third World debt. That would be a definite win-win situation.
  5. Go to war like in 2. but this time make it a virtual one, a Play Station like game. WWIII virtual economy game, inserting all possible scenarios and making it happen for real for five years. No deaths, no destruction, no hard feelings. That would imply doing creationist activities, the "war effort" factor, and phasing out most of the Financial Markets influence for that period.
I find it hard to digest that people who were part of the problem are still being invited and paid as part of the solution. It will never happen, as their reasoning has not suddenly become clearer. The solutions are above and, believe me, there are not that many others left.
That's it. I hope this helps and wish good luck for us all. We are in need of it!

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