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Economic crisis and proutistic solution
by Rishi Teckchandani M.B.A UCLA
Here is my continuation to last weeks article.
In my earlier discussion I explained a current crisis unfolding. I also mentioned that PROUT will be the solution but I do not see PROUT coming into activity until the current capitalistic solutions are not fully utilised.
For the time being the US Federal Reserve is experimenting with interest rate reductions and boosting liquidity to the banking system via short term loans. Most of the current illiquid debt ranging from sub-prime loans to LBO loans are sitting in major pools of debt under major US banking institutions. Their balance sheets have accumulated what many may consider 'toxic debt' Anything that cannot be sold and ceases to hold its original value in markets are now seen and commented by major newspapers as 'toxic'. The unwinding of this toxic portfolio has sent margin calls across international markets. As this debt continues to find no buyer, it ends up as a writedown. Unfortunetly these writedowns have created fear amongst many investors and is turning into an outright freeze in the overall credit system. Fear has led investors to believe that even worthy borrowers or prime loans and AAA rated corporate loans deserve more risk adjustments. Thus we have seen institutional investors lose hundreds of millions holding even municipal bonds. I believe this unwinding seems to be deteriorating on a daily basis. Whilst debt holders are trying to calm investors and the public it only creates more panic. And some hedge funds are taking advantage of this panic by betting against any resolution to the current credit crisis. Whilst I fully agree with this group of traders, I don't wish to speculate against it because of what I see happening next.
I earlier mentioned that commodity prices have spiked and speculators are betting on more spikes. This has sent weak signals about the US dollar across the world and in today's electronic trading environment, speculators have used every potential strength in the dollar to sell it harder. Nobody believes that the dollar can actually recover when an individual, household, city, state and country is facing a credit crisis and international investors (bailout funds) don't trust the re-orginization plan and thus demand a higher rate of interest. This crisis hasn't hit the safe haven US treasury market but I honestly would not be surprised to read a headline one day saying interest rates on the 30 year bond spike to 1985 highs or even higher. This is something that I would not consider impossible based on a trend I see happening. I would have personally prefferred converting my savings into Euro's last year and seeing a 16% return. and this year converting to the Brazilian currency for its commodity safetyness or the Indian Rupee for its potential economic growth in the next 10 years. Whilst this is just my opinion many others see it differently. I'm not here to write about how to make money. I consider that very easy in today's economic system if you can understand how this casino operates but I'm here to point of the defects. One defect today is many US dollar denominated investments have seen their values drop signifincantly and thus has led to a dollar credit crisis. It maybe that cheap interest dollars is more scarce to obtain then $1000 gold. We're in such a situation that the US federal reserve is scared of speculators attacking its main purpose to create financial stability solely because it makes profitable sense. The system cannot eliminate these speculators unless controls are placed into the financial system and thus government intervention will happen if staple food prices like Wheat, Corn and Soy Beans continue to double at already record rates. Its only a matter of time before headlines cross on famine and food shortages. How long will we all be able to tolerate rising gas, food and basic necessity item prices going higher? The speculators will sell you into a theory that the world is growing and China and India have rising demands that cannot be met. In China they will tell them that the US is still the number one consumer and so prices will continue to go higher. Overall rumours are best made by those with inherit financial interests. The game is about making money so until the going is good, the rumours will continue. At some point the government will not tolerate such activity and intervene. This intervention will send panic to traders and ultimately put rational in commodity prices. Rising famine for profits? I rather be on the side of PROUT then see commodity prices spike higher leading to hunger across those who live for under $1 a day (This will be what many individuals will think). I think we are near a point that this crisis will unfold and humanity will command greater scrutiny into the rising prices. For now it is only contributing to people wasting less food but over the next few years it will lead to government reforms. Do we all really want to amass hundreds of thousands of dollars? Will this amassing that leads to hundreds of millions of deaths do any good for you? I think capitalists need a class on PROUT 101 and then Ananda Marga Basic philosophy. Excess wealth leads to nothing but the degeneration of the mind.
PROUT should intervene when the global governments intervene on commodity prices. We cannot take any of the previous economic routes and PROUT will be the most common sense approach to solving humanity's economic crisis. Are you allowed to add a discusion section here? I would be interested to know what most of you think? I have a lot of trader insights and see a mega eclipse in the making from many sides. The current Federal Reserve chairman is under too much stress and the traders are taking advantage of his weakness. There is a trade for every outcome. They've bet on the most likely outcome which is inflationary but I think everybody will be hammered out as a trader when they realise what they have done to the suffering humanity. I feel bad seeing food prices rise. Many people cannot afford to feed their families in poor countries. Infact, even the US many die of hunger. This capitalist system is being exploited because its lost its usefulness and it is soon coming to a time for change. This change will be trigggered when we see record commodity prices that cannot be sustained due to humanities cries. As long as we pay and not complain to our government we will see speculators accumulate their wealth betting on higher prices. Lets see how long this happens. They are bluffing the Chinese government selling high priced commodities and sending rumours about demand in China through US media outlets. And weak growth in the US allows them to sell the dollar against it all and make money. We live in a horrible system that is controlled by Greed and Fear. Nobody is allowed to do Sadhana in peace witohout worrying about basic necessities. I wish one day all of us can do Sadhana- Our birthright- without any worry or any concerns. The current system concerns me. And the solution will come when all of us cannot tolerate this situation. The approach must be Proutistic and the timing must be accurate. PR Sarkar came to this world at the right timing and left us with a philosophy at the right timing. He will guide us to PROUT also at the right timing. and one day we will all see the essence of a Dharma.