The question is not whether the current financial and economic crisis will ever be resolved. The question is when and in how many years this unsustainable house of cards will collapse with disastrous consequences for entire economies in Europe and the U.S.
The financial and economic crisis that has engulfed the developed world in Europe and North America is unprecedented in the history of humankind in terms of both depth and breadth of the problems that underpin the crisis. Never before in history has the world been so integrated with the financial markets truly global and every crisis predisposed to become systemic and engulf the entire system as it has happened today.
The severity of the crisis is being consistently downplayed and kept hidden from the public in the mainstream news media in the West. Unfortunately, citizens and taxpayers in both Europe and the U.S. continue to be under-informed and dis-informed with regards to the actual situation, the underlying causes and the ways and means out of the crisis.
Whatever has happened since 2008 has been only an introduction; the developed world in the U.S. and Europe are going to enter the main phase of this crisis and no matter what governments and central banks (The Federal Reserve in the U.S., the Bank of England and the European Central Bank) have been desperately doing, all their actions only amount to buying some more time and extending the problem into the future without fundamentally solving the underlying problems.
In the North American sector, if there has been a temporary respite from the raging crisis in the U.S. in recent months in terms of slightly better employment situation and signs of economic growth, they are by no means an indication that the crisis is finally coming to an end; it is merely the end of the beginning.
The only way that the U.S. and Europe have adopted in dealing with this crisis has been creation of endless money and credit and flooding the markets and banks with this money and credit. In other words, this crisis that is itself due to excessive debt is being dealt with by creating more debt (by the central banks which have the authority to create money out of nowhere) to prevent the deepening of the crisis only over the short-term. This is not the right solution; it only works over the short-term and leads to an all-out disaster in the long-run (within a 4-6 year time horizon) in the form of an eventual and inevitable collapse of the banking and financial system in the developed world.
Gradually but surely, the developed world is entering the main phase of this truly unprecedented crisis which would see accelerated impoverishment of the middle class in Europe and North America and greater concentration of political and - most important of all – financial power in the hands of the current financial-politico oligarchy and promoters of 'finance capital' who are proving to be unwilling to let go of power at any cost. The cost, as the case over the past three year, has been the destruction of entire economies and impoverishment of hundreds of millions of people. Now, let us delve into the details and dynamics of the current crisis.
This unprecedented crisis of today is characterized by a systemic (not systematic) failure of the global banking and financial system. In Europe, most of the banks are in actuality bankrupt and are in desperate need of being bailed out by the solvent countries such as Germany and the European Central Bank.
The temporary solution to these problems and put forward by the central banks (both the European Central Bank and the Federal Reserve in the U.S.) has been creation of endless money and credit. The Federal Reserve in the United States continues with its so-called 'quantitative easing', which, in actuality, is creating –out of nowhere - hundreds of billions of dollars in money and credit and spending it on buying bonds and treasury bills issued by the government.
Quantitative easing round I and quantitative easing round II have already ended with a combined money injection of more than $1.5 trillion into the U.S. economy especially into banks and financial corporations. As shown in recently de-classified documents and based on an audit of the Federal Reserve, it came to light that during the height of the crisis in 2008-09, the Federal Reserve made a staggering loan of $16 trillion dollars (almost one third of the world's GDP) to foreign banks and financial corporations.
If this was not enough, barely a few weeks ago, the Federal Reserve extended a loan of $1 trillion dollars to the European Central Bank which will be used to bail out the insolvent European countries and bankrupt banks. Technically, the European Central Bank is not allowed to 'bail out' any country or bankrupt bank as it is against the rules of the European Union. On the other hand, the Federal Reserve is not authorized to extend (dollar-denominated) loans to other central banks.
However, the trick that the Federal Reserve used was 'swapping' $1 trillion dollars for the same amount of Euro from the European Central Bank. This way both the central banks stayed within the confines of legality but were able to enable the embattled European Central Bank to engage in what amounts to bailing out of insolvent European countries such as Greece and Portugal.
These instances are enough to showcase the depth of the power of the global financial oligarchy that is ready to go to any extent in order to preserve the current system for a few more years. The same financial oligarchs on the Wall Street who control the Federal Reserve in the U.S. also control the financial system in the U.K. and are using the present crisis to further push for power and restructure the destabilized economies in Europe in favor of their own agendas of domination of more financial power.
The question is not whether the current financial and economic crisis will ever be resolved. The question is when and in how many years this unsustainable house of cards will collapse with disastrous consequences for entire economies in Europe and the U.S. When the time comes when the current system will be impossible to be kept together by any more creation of money and credit, then we will be staring the eventual collapse in the eyes. As it has been the case throughout history, economic destruction has always been in the company of great wars. If there will ever be a major global war, certainly, it will be closely tied to the current crisis that is reaching its climax in a few years time.
The economies in both North America and Europe continue to be in a deep recession with the sovereign debt crisis in the European Union now reaching the critical phase of ejecting a number of insolvent countries such as Greece out of the eurozone.
The real negative impact of the ongoing crisis is on the shrinking middle class in the U.S. and those European countries such as Greece, Italy and Portugal that are at the receiving end of Banking Mafia's tyranny. The middle class is being besieged and destroyed and the bankers need this in order to preserve the current system as long as they can. However, it is increasingly evident that they will not be able to sustain it for more than a few years and the day of reckoning is drawing closer when this giant house of cards will eventually collapse.