Webster Tarpley
PressTV
May 30, 2013
Where are we in the unfolding of the current world
economic depression, and what can we know about the events that lie
ahead? The US Memorial Day holiday weekend provides the occasion to
venture some answers to these questions.
The current world economic depression reached critical mass in the
autumn of 2008. The world derivatives panic of that year and the
bankruptcy of the British and US banking systems was then followed in
2010 by a European banking panic, which has been disguised as a
sovereign debt crisis. That European banking crisis continues to the
present day, made worse by brutal and stupid austerity policies imposed
by the International Monetary Fund, the European Central Bank, and the
European Commission. With the US and European economies depressed, the
slowdown has spread across the world to impact Brazil, China, and India.
No country has so far been able to turn the corner from depression
to broad-based recovery. Japan is currently using high-risk competitive
evaluations to end decades of stagnation, but this has been punctuated
by signs of financial panic. The supposed success story of Iceland,
touted especially by Keynesians, has been exposed as a big lie by the
recent election there, which revealed a population driven to desperation
by a massive collapse of its standard of living – to the point where
voters were willing to bring back the hated right-wing parties
responsible for the pre-crash orgy of speculation.
The unfolding of the current depression is roughly parallel to the
development of the world economic crisis of the 1930s. Back then, the
depression was triggered when Lord Montagu Norman’s Bank of England
sharply raised the British discount rate in September 1929, sucking huge
amounts of hot money across the Atlantic from New York to London, and
resulting in the fabled US stock market panic of October 1929. That was
followed by a European ranking crisis in the summer of 1931, which
started with the Kreditanstalt of Vienna, then brought down the
Danatbank and the rest of the large German banks, and culminated with
the watershed default on gold payments by the Bank of England in
September 1931, which destroyed the pound-based world monetary system of
that era. The British debacle then provoked a panic run on US banks
which accelerated during the 1932 and into the spring of 1933. By the
time of Franklin D. Roosevelt’s inauguration in March of 1933, every
bank in the United States had shut its doors. The Roosevelt Bank Holiday
merely provided legal cover for those stricken institutions.
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