.
Though nobody really knows how the world economic crisis is going to end but one thing is for sure that’ future historians would draw parallels between the current credit crisis with that of the Great Depression’ as there lies extreme analogies between the two. The last pour was the outcome of the First World War and set into motion the Second, just like today’s GWOT’ and changed on its way the realm of economic philosophical thinking and theories that governed the world’ while founding the specter of paradigm for Global Financial System’ whose reign lasted for 80 long years. Just like exceptional growth in the era starting off 2000’ Great Depression also dressed up under the windfall of splendid wealth and strikingly’ both triggered from the collapse of mortgage industry’ resulted in a Domino crumple of Banking and Insurance sectors that lead to today’s calls of sundering the two’ sounding very similar to Steagall Act of last century.
Economies work in a loop’ a closed cycle and its very intriguing that after having sniffed through all the ebb we haven’t yet learned its very bible! The world as we see today ignore and forgets every thing ‘critical might that be’ the moment it deluges into the Nova of pro tempore fringes. Call this greed, passion, ignorance or madness, but the fact remains that’ droves of such aspirations ruined this world over and over again. Shall we learn or should we learn’ sounds ineffectual and abortive without shedding light on causes’ those been botched and forgotten.
The Fed Chairman accuses saving spree of East’ being the prolific ground of fall of the West! But this is just a small fraction of the whole story. Regulators on the western coast foresaw this rising tsunami charging right in their direction and instead of reinforcements they made levies go thin rather melt’ despite incontrovertible evidence of the havoc it shrouded in its seemingly placate torso…and we saw it come, wreak, devastate and level what ever surfaced in its chase. Excessive glut attenuated the interest rates and flooded credit quality with high volatility’ thus ruining and deforming the plinth of global financial solvency. This whole specter of easy-credit got flared up under the shadows of extravagant demand both on the government and public level, catalyzed by the milieu of tampered and manipulated regulations. The sunken tower of yields and gains was already swaying vigorously under the unsustainable winds, but instead of bracing the very foundations’ callous voraciousness and stupendous irresponsibility made this structure go gangling. A fractional hike in Fed interest rate was the trigger that unleashed the unforeseen demolition, making the “statue of recklessness” fall and fall hard. But all the tremors and terminations of century old institutions of the likes of Lehmans and AIGs were just the tip of iceberg, the captain and crew of the struggling Titanic are still not sure of the extent of damage underneath, they are scuffling to save the sinking giant.
The great spill has already ruined the lush interior while devouring it’s the most priciest assets, the team in order to lighten the mammoth of toxic burden has already shifted, unloaded or destroyed tonnage of its ruptured engines. The cost of saving onboard assets has shot to a whooping Eight Trillion, still no effort seems effective enough to bud the great leak. Just a simple loitering has soaked up Fifty Trillion out of the global stock and equity market’ yet prognostication of even greater spoilage looms with blatant conspicuousness. The ripples of this seizure have already jostled shores of the entire world, but would this world come to rescue of struggling Captain and how would they trail the plunging sail? Is yet to be seen. Once out of the tumult’ would the debilitated enterprise be capable of steering the armada of nations or would others be willing to follow the fractured lead?
Muhammad Shafqat
Mar 2009
