Last week, I let off a bit of steam about an article in the Times which reported that the public was blaming the banks for the state of the global financial system.

Today it was the turn of Ambrose Evans-Prichard, who bemoans the blame falling on Capitalism, and instead blames “governments.”

The collapse of today’s financial system really began the day Kennedy died. On the 4th of June, 1963, Kennedy had issued Executive Order No. 11110, which returned the power to issue currency to the US Government, rather than the Federal Reserve. With his death, the direction of US economic policy once again came under the control of politicians whose only allegance was to international banking, rather then the Constitution.

Subesquent governments ended up being run by “think tanks” such as the Trilateral Commission and the Council on Foreign Relations, who, having successfully destroyed the Breton Woods system through control of Nixon’s premiership, went on to promote a “controlled disintegration of the economy” as detailed in their joint “1980s Project.”

As the CFR say themselves, “As it turned out, the title of the project was a little premature; not until the 1990s did the issues explored truly dominate the international agenda. But many 1980s Project authors were by then installed in government policymaking positions, and when the Cold War came to its unexpectedly sudden end the Council had provided for the public record an impressive database for the global issues confronting coming generations.”

So the Nixon, Ford and Carter administrations and their counterparts here in Europe, all worked hard to lay the groundwork which would destroy the productive capabilities of their respective economies, turning them instead into a grotesque global monetary-financial betting shop.

This betting shop has allowed the top 2% of the population in terms of monetary income to make an unprecidented grab for assets. In the meantime, just enough of the profits have been thrown to the rest to keep us quiet.

As I said in that earlier post, though, while bankers and politicians are clearly corrupt, greedy, almost Satanic in their world view, they are not to blame for anything. Just in the same way Monsanto is not to blame for Aspartame becoming the most widely consumed food additive.

It’s the rest … the silent, “go along to get along”, “you can’t change the system” majority who sit and do nothing, who is responsible. Banks, governments, think tanks and “leadership training charities” only have power because we give it to them, and we’re so scared of losing our cheap, plastic, slave-built gadgets that we don’t want to act. The irony is, they’re shitting bricks in case any more of us waken up any time soon.

It feels like the summer of 1931. The world’s two biggest financial institutions have had a heart attack. The global currency system is breaking down. The policy doctrines that got us into this mess are bankrupt. No world leader seems able to discern the problem, let alone forge a solution.
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Were you around in 1931, Ambrose? [...]

According to an article in Sonntags Zeitung, the banks are only a quarter of their way through announcing their losses.

The story was based on a report apparently leaked from Bridgewater Associates, who call themselves an “investment company that manages $150 billion in global investments for a wide array of institutional clients.”

What’s interesting is that as time goes on the number just gets bigger. Back in April, the FT reported reported the figure as $1,000 billion. In June, the Telegraph had it at $1,300 billion. What next, you may wonder?

The Sonntags Zeitung story yesterday said:

Westport (USA) - The expected losses from the financial crisis will reach $1600 billion. Financial institutions have so far announced only $400 billion. This pessimistic forecast comes from a confidential study by Bridgewater Associates, the second largest hedge fund in the world.

“We are facing an avalanche of bad assets,” says the study. The biggest losses so far were with the U.S. credit banks. “We have big doubts that financial institutions will be able to raise enough new capital in order to cover the losses,” the authors write.

Bridgewater Associates in financial circles enjoy a first-class reputation, several central banks are among its customers. “Bridgewater are on the pessimistic side,” says George Magnus, Senior Economic Adviser at UBS in London, “but they have it absolutely right.”