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TheBorg

Economy Watch

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It is becoming more evident by the day that the once-mighty U.S. economy is nearing collapse.

Huge chunks of the auto industry -- once the bedrock of the economy -- are going into bankruptcy.

The most recent casualty is Delphi – the largest auto parts maker in the world – which filed bankruptcy last week. Auto workers are facing huge pay cuts and loss of pensions and health benefits. There is concern that Delphi's collapse will topple GM as well.

The airlines are also teetering on the edge of the financial abyss -- Delta and Northwest airlines filing bankruptcy in recent weeks.

What is happening is that corporations are entering into the final phase of globalization. (The final phase being the destruction of the working class – the so-called middle class.) Companies are using bankruptcy as a means of permanently busting unions, outsourcing the last remaining skilled labor jobs in order to shed costly workers benefits and wages.

But perhaps the most significant recent bankruptcy is the one you may not have heard much about – Refco.

Refco – once touted as the world's largest derivatives broker – is now referred to as the new Enron.

Shortly after going public in August the company simply imploded. The company reportedly left open derivatives positions estimated to be in the range of $150 billion!

So far in the immediate aftermath of Refco’s collapse there is no apparent contagion, but derivatives trades are described as being in a state of suspended animation.

Derivatives are supposed to spread risk through out the financial system – but in reality they concentrate financial risks to a few players that hold enormous multi-trillion dollar obligations.

Here is a recent history of the growth of derivatives as reported by EIR.

It is also reported that the US now has to attract capital inflows of over $1,000,000,000,000 anually simply to offset the collapse of the US economy. Whereas, most of the inflows used to come from China and Japan recycling their dollars, now the inflows come from London and their off-shore hedge fund operations. (Many hedge funds are simply shells set up by huge banks to manipulate the markets and launder illicit monies. It would seem that the hedge funds are being used as a last gasp, end-game scheme to stave off the inevitable collapse a little while longer)

At any rate, with the underlying physical economy – upon which everyone depends – in an undeniable state of disintegration, and the gambler's side bets known as derivatives growing exponentially, it is only a matter of time before the financial system rips apart.

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Guest consa

So it is serious then, what about Asian countries diversifying their currencies away from the dollar, this will speed up the process and it has also been kept very quiet.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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