While the world is preoccupied with its acclamation of the Anointed One, other events have been continuing as usual.
In particular, the global financial crisis is spreading and deepening. For the past two days the New York Stock Exchange has sent out strong signals that it is not yet done with its discounting of Obama futures; the prospect of Whackanomics continues to depreciate the value of commodities and financial instruments, and is further depleting America’s 401(k)s.
Some European countries are notably in distress as a result of the mortgage and banking crises, with France the latest victim to report in. According to ANSAmed:
Mortgage Crisis: EU Go Ahead for French Credit Measures
BRUSSELS, OCTOBER 31 — The European Commission authorised a debt financing mechanism for the stabilisation of credit decided by France to oppose the financial market crisis. This was reported today by the EU executive, explaining that it is a “non discriminatory” mechanism, “limited in time and scope” and which stabilise “suitable” security measures to reduce competition distortion to a minimum.
The Commission, read from a note, concluded that the system constitutes “an appropriate, necessary, and proportionate means to fix serious turbulence in the French economy” and it is “compatible with EU regulations on testate, as delineated in the communication of their application to the banks in a time of crisis”.
The EU is re-capitalizing the French banking system by injecting liquidity into it — that is, they are giving the banks money, just as the Spanish and the Swiss have done within their own systems. This is an attempt to stave off a serious recession or depression, one that looks to be the worst in more than a generation.
This kind of paternalism guarantees that there will be more governmental interference in the operation of financial institutions, removing what little was left of an independent free market in the banking system. Once again, according to ANSAmed:
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PARIS, NOVEMBER 3 — French Prime Minister Francois Fillon has suggested today that the State intervene in banks’ capital if they do not re-open access to credit as they are obliged to do in exchange for a reinforcement in their funds, after benefiting from the rescue package. “If we feel that the banks are not doing the work needed there are two possibilities: the first is to take back the credit given them. The second is to enter into their capital and change their directors, to check their strategies” said Fillon during a TV interview to be broadcast this evening.
Global finance is a huge interlocking system, made up of national treasuries, central banks, and international institutions like the International Monetary Fund and the World Bank. To run smoothly, the system depends on the availability of credit, which has been seriously impaired by the collapse of assets based on subprime mortgages.
The IMF seems particularly hard-hit, and its plight has sent British Prime Minister Gordon Brown scurrying to the emirs of the Persian Gulf looking for hard cash to prop the institution up with. But you don’t get something for nothing, and Mr. Brown is, in effect, selling a large chunk of the IMF to the Arabs by offering its benefactors a significant share in the control of the organization.
According yet again to ANSAmed (if you want to find out what’s happening in places ignored by most of the MSM, ANSAmed is one of the best sources):
Mortgage Crisis: Brown Promised 790 Bln by Gulf Countries
DUBAI, NOVEMBER 5 — The visit of British Prime Minister, Gordon Brown, to petrol producing kingdoms (beginning in Saudi Arabia and concluding in Dubai) has brought promises of investment in the energy and construction sectors for a value of USD 790 million. The news was revealed by the British Trade minister, Peter Mandelson, in an interview with the BBC which was cited by Gulf News.
However, the UAE newspaper warned, it is difficult to quantify exactly how much Brown’s visit, which was aimed at getting financial assistance for the International Monetary Fund, yielded in total.
During his speeches, the British premier emphasised his support for a greater role for countries that contribute significantly to the resolution of the global crisis, including positions of responsibility in the leadership of the organisation. This hypothesis “should not be regarded as a favour”, the editorial of the Khaleej Times, a newspaper, pointed out. “Rather”, it continues, “it should be seen as a recognition of merit”.
Gulf News concurred on this issue, and noted how much the world has changed since the time immediately after Second World War, when the most important international organisations, such as the United Nations and the World Bank, were created. “The power of the emerging economies in India, China, Brazil and in the Gulf must be recognised and these countries afforded much greater responsibilities”, concluded the newspaper.
The results of Mr. Brown’s visit were “difficult to quantify”, but only until the “greater role” to be played by the IMF’s new investors was made explicit. The $790 billion gains the sheikhs a significant voice in the management of the IMF. Whether or not their stake will constitute a controlling share is not clear:
Financial Crisis: Brown in UAE, IMF Seats for Assistance
DUBAI, NOVEMBER 4 — Seats in exchange for assistance: British Prime Minister Gordon Brown, in a visit to the United Arab Emirates to ensure assistance to the International Monetary Fund (IMF) reserves, stated in a speech to the entrepreneurial community in Abu Dhabi that he “resolutely supported the argument that countries who contribute the most should be given more important roles in the management of the IMF”.
This was reported by the daily paper The National. The British Prime Minister started a mission to Gulf states on Saturday — Saudi Arabia, Qatar and United Arab Emirates — to urge the oil monarchies to play a key role in the recovery of the worldwide economy “which is slowing down more than expected”.
And the United States is practically begging the Arabs to rescue them from the consequences of decades of fiscal folly:
The British Prime Minister’s tour of the region comes only a few hours after the tour by the undersecretary to the US treasury, Robert Kimmit, who instead urged the countries of the Gulf Cooperation Council to invest more heavily in America and in the West. Brown, who will conclude his visit to the region in Dubai, yesterday met president Khalifa bin Zayed Al Nayah in Abu Dhabi, with whom, as well as the international financial crisis, he also discussed cooperation between the two countries.
With Barry Soetoro as the new CEO of the enterprise, it looks as if the transfer of the West’s capital stock to Islamic control is nearing completion.
Does anyone doubt that Sharia Finance will be a component of the new system that emerges from these deals?
Hat tip: Insubria.