The Great Crash of 2008 turning into the Global Depression of 2009

Several major U.S. firms have declared bankruptcy or begun liquidation, and it's expected that the list of casualties will mount as the final results of 2008 come in.

The Wall Street Journal quoted Mary Delk, a director in the retail practice at consulting Firm Deloitte LLP, confirmed, "This will go down as one of the worst holiday sales seasons on record."

Earlier this week, the top economist at the International Monetary Fund, Olivier Blanchard, warned that continued declines in consumer spending will set off a global depression.

Blanchard told the French newspaper Le Monde, "Consumer and business confidence indexes have never fallen so far since they began. …. It is imperative to stifle this loss of confidence, to restart household consumption, if we want to prevent this recession developing into a Great Depression."

A third of G8 banks bankrupt, closed or merged in 2009?

Financial analyst Ralph Silva of TowerGroup told CNBC that he expects no less than one third of banks to fail in 2009 and that anything up to a thousand could collapse if they don’t merge.

“In 2009 we’re gonna see one third of the banks in the G8 countries disappear, either being merged, forced or not forced, or completely disappearing,” said Silva.

The analyst predicted that rather than letting banks fail, governments will force them to merge, which would lead to “very few banks owning quite a bit more.”

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World Faces "Total" Financial Meltdown

The governor of the Bank of Spain issued a bleak assessment of the economic crisis, warning that the world faced a "total" financial meltdown unseen since the Great Depression.

"The lack of confidence is total," Miguel Angel Fernandez Ordonez , also a governing council member of the European Central Bank, said in an interview with Spain's El Pais daily.

"This is the worst financial crisis since the Great Depression" of 1929, he added.

[AFP]

The Neo-Alchemy of the Federal Reserve

Ron Paul writes: The updated, total bailout commitments add up to over $8 trillion now. This translates into a monetary base increase of 75 percent over the last two months.

This money does not come from some rainy day fund tucked away in the budget somewhere – it is created from thin air, and devalues every dollar in circulation. Just as alchemists of the past frequently poisoned themselves with the lead or mercury they were trying to turn to gold, today’s bankers are poisoning the economy with accelerated fiat money creation.

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World Bank predicts global gloom

The World Bank has forecast a significant decline in global economic growth in 2009 for both developed and emerging countries. The Bank said a deep global recession could not be ruled out.

The World Bank has also warned that some emerging economies are likely to face serious challenges, including bank failures and currency crises, even if global bail-out plans start restoring confidence in financial markets.

Even the fast-growing emerging giants, India and China, are likely to suffer from the slowdown.

[BBC]

$8.5 trillion of our tax dollars to be used to "rescue" the U.S. financial system

700 billion for the Wall Street bail-out. Another 200 billion there, and then on another given day 800 billion more committed. If you’re like me, you may be finding it hard to keep track of how many billions or trillions the government is spending to “rescue” us.

According to Bloomberg News, over the past 15 months, the US government has pledged anywhere from $7.7 trillion to 8.5 trillion (and counting!) to rescue the financial system! To say the least, “The commitment dwarfs the Treasury Department’s $700 billion Troubled Asset Relief Program.”

Most of the money, about $5.5 trillion, comes from the Federal Reserve, which as an independent entity does not even need congressional approval.

So much for transparency and oversight. So-called regulators continue to commit far more money than Congress agreed to, while refusing to disclose loan recipients or reveal the collateral they are taking in return.

The San Francisco Chronicle writes “Given the unprecedented size and complexity of these programs and the fact that many have never been tried before, it's impossible to predict how much they will cost taxpayers. The final cost won't be known for many years.”

How much is a Trillion Dollars?

Politicians and the media avoid startling us by explaining what “7 or 8 Trillion Dollars” denotes, and so we turn to the occasional blogger, myself included, who attempt to provide a handle on what these colossal figures represent. For example:

• If you had 7.4 trillion pennies, you would have $74,000,000,000, an amount sufficient to buy the New York Times Co. 86 times over.
• 7.4 trillion pennies would stack up 4,671,717 miles high. That's enough to go to the moon and back ten times.
• Just 1 Trillion dollars equals all the assets of all American banks.
• $ 7.7 Trillion is conservatively nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures.
• This amount could instead pay off more than half the country’s mortgages.
• Oh yes, and to come up with this $8.5 Trillion, each American citizen is involuntarily kicking in $27,851!
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OK, so you get the picture? Here’s another angle you shoppers might relate to.

Spending $1,000 per second, it would take almost three decades to spend 1 trillion dollars! (–And obviously 1 Trillion is only a fraction of $8.5 trillion being offered on our behalf.)

Applying a “trillion” to Time,

1 second multiplied by a Trillion = 31,700 years!

Might that be an indicator how long it may take the children of our children’s offspring to begin to pay off the National Debt?!

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