As I said before the US is falling apart and is dragging the first world with it, because most countries have their reserves based in US dollars instead of gold.
The financial crisis that is shaking the foundations of capitalism in the world is not to be solved just by nationalising banks where the loses are being absorved by the tax payer to save fat cats. The help that governments of the first world have given to solve the problem soon will revert agaisnt the whole system making the crisis even worse.
It will revert because the actions taken are affecting directly the value of the dollar itself which means inflation and recession worldwide.
What is a stake is not just the bankruptcy of a few private banks but the collapse of the most emblematic capitalist economic state: The USA!
The US has socialised loses for around $950.000 billion and this is just the USA alone.
We all know that the value of any currency can be determined by dividing the total of money in circulation with the nominal value of assets and services produced by any country.
This means that if you increase the quantity of money supply you must increase proportionaly the gross domestic product (GDP) so this currency could keep its value.
If the money supply is not supported in that way, with an increase on the GDP then what we have is money produced out of thin air or inorganic money.
The US has been already in recession for a long time; therefore, the money supply given to the financial system is inorganic money produced out of thin air, its value is NIL.
The FED has been making money out of thin air for a long time already, which explains why the dollar has been so weak in recent years, and of course it meant inflation and devaluation.
The most sad part of this story is that the FED has no option but to continue until the system has collapsed.
The US has been producing money out of thin air, because the real money has been spent a long time ago. The US outgoing is higher than their income; they cannot cover their cost of living, the US Imports are higher than the Exports. Hence they have a gigantic budget deficit plus a massive foreign debt.
The US economy cannot be recovered. Everybody knows that. It hasn't collapsed yet because is not convenient for anybody so the whole planet is trying to help but this will only slow down the unavoidable. And it is inevitable because the economic problems in the US are within its own structure.
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