More than seven moths ago, I wrote an article describing, up to the very last point, what would happen to this (our country the USA), if we continued spending "Billions" (by now Trillions) of dollars in a futile war that should had never been started. All for a country that is not our country and whose problems we will never be able to resolve, nor is it our duty to resolve. This country, IRAQ, never represented a danger to the U.S., as it has been well established.
The money spent in this war, together with the housing market, and the deficit, is what has created the economic situation we are now facing.
Up to date, more than 90 banks, and many brokerage firms like Merryl Lynch, CityCorp, etc., are in serious trouble.
Just today, July 14th, 2008, hundreds of customers of the IndyMac Bank of Pasadena, California, with deposits in excess of the insured limits (100,000.), flooded The Bank branches demanding withdrawals of their money, or to get answers about the fate of their funds. For many of them, these funds represent their lives savings.
The officers of IndyMac shut down the California based Bank on Friday, and transferred control of it's assets to the Federal Deposit Insurance Corp. (FDIC). With the failed bank now under Federal control, these hundreds of people lined up before dawn, outside its headquarters branch in Pasadena.
IndyMac is the largest regulated thrift to fail, and the second largest financial institution to close IN U.S. HISTORY.
And let's not even mention the "Stock Market". This is another economic situation completely out of control. The one meter to measure the economics of a country, is by the performance of their Stock Market (or Bolsa de Valores in Spanish).
If the stock market keeps performing the way it has been doing for many months, a RECESSION is imminent. This is a terrible sign of falling into the Great Depression of 1929. If you are aware of the crash of 1929, you will notice the similarity in patterns.
There is a limit to what the Federal Reserve can do in this situation, even though the reserves of this country are the most powerful in the whole world. The members of the Federal Reserve Board are placed on that board to exercise their own minds and their own judgments, and not to blindly succumb to arguments that have little basis "according to them", and could lead to disastrous consequences.
This means, that according to them, it is never wise to follow placidly along when good judgment should dictate otherwise. There is a phrase that critics of economic Forecasting like to use: " Give an economist a result you want, and he'll find the numbers to justify it."
There is a saying that for every ACTION THERE IS AN EQUAL AND OPPOSITE REACTION. An ill advised half percent increase in the Federal Reserve Funds, can cost hundreds of thousands of jobs and absolutely devastate whole sectors of the economy. It is an enormous power that most not be exercised lightly.
When the Federal Reserve decides to raise rates, they can tell, fairly precisely how many businesses will declare bankruptcy, how many people will loose their jobs, how many homes will be foreclosed. Other consequences might arrive if they decide to lower rates. They have all the data, neatly bound, carefully studied.
Money is the root of all evil, or perhaps more accurately stated, THE LACK OF MONEY is the root of all evil.
Many people ignore that The Federal Reserve wire transfers out more than "ONE TRILLION DOLLARS PER DAY", to maintain its policies and to insure that the commercial banking system operates smoothly.
My question is, what will happen "IF' The Federal Reserve runs out of Money. This may very well happen, although there is a very slight possibility.
Therefore, if we do not stop spending Trillions of Dollars in the war in Iraq, stop helping other countries, (EXAMPLE MEXICO), who do not even deserve it, stop the deficit, stop manufacturing goods like computers, cars and other technology overseas like in India and China to save in the price of labor, increasing unemployment in the U.S., then there will never be a solution to our many problems.
On the other hand, workers here in the U.S. most stop expecting wages of $30. or $40. an hour, benefits, vacations, unions and so many other things that make factories move to other countries with cheaper labor.
But the worst part of this whole terrifying picture is that neither one of the presidential candidates for the next presidential elections, has the "brains" or expertise to deal with the extremely serious problems that are practically killing this country.
As a matter of fact, I do not believe there is any human being able to tackle these problems.. We would need GOD himself sitting in the White House and create a "MIRACLE".
WE MUS NOT FORGET TO THANK MR. BUSH FOR DESTROYING OUR COUNTRY. All we can do is pray.
Eva de la Torriente Diaz
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