cross cascading bank defaults seem to be the most likely cause of the Gary North scenario.It seems quite convienent that Koskinen and his ilk always forget to mention the way banking is international and interconnected.

-- zoobie (zoobiezoob@yahoo.com), August 28, 1999

Answers

Zoob'

Do tell. Care to give a brief description of cross cascading to us economic illiterate?

Keep your...

-- eyes_open (best@wishes.net), August 28, 1999.

Here is a little story I remember seeing on Mister Rogers (or maybe Sesame Street) long ago.

Three of the Puppet characters are interacting. The first says to the second "Hey, here's the dollar I owe you." The second says, "how nice, because I owe number three a dollar". When number three gets the bill he says," I owe number one the dollar as well"l. Number one gets the bill back. How cute. Nobody is richer or poorer but they just eliminated $3 of debt.

The international financial community is balanced in a similar way. The problem is that "repayment" is usually based on "cash flow" - meaning a person who is cut off from their income source is at risk of delay in payment. If delay or default is expected to continue, the lender may require the "sale of an asset" to provide the funds. When there is is a large crunch, it is in the interest of those who owe to delay, thus depriving those who lent to access to their funds.

The "honest" lenders also have debts (derivative swaps etc.) so they also have to say "pay you Tuesday for a Hamburger today".

You dream up the rest

-- Thom Gilligan (thomgill@eznet.net), August 28, 1999.

for the same reason a "sermon" was distributed to pastors and 10 million(est.) are being spent in public relations to "keep the money in the bank" and "y2k OK " billboards.

It is more important to maintain the highest possible economic prosperity and control than to save lives. That being so makes it y2kok to lie. to rebuild we, the people must choose leadership with grit,even at the expense of what we may perceive as our agenda. It is the whole that needs this leadership, it should be supported by gays, blacks, whites, rich and poor, puerto ricans and women.

unless each INDIVIDUAL seeks the good of the whole before their own, it's over.SOONER rather than later.

Lets concentrate some of the effort on ethics, principles, the importance of truth and trust, our present victims. Rebuild those in the heads and hearts of the survivors and we'll go up the tube, not down.

thanks for a great question regards, jorge

-- jorge del valle (intlplastics@mindspring.com), August 29, 1999.

Zoobie,

I don't claim expert knowledge of the banking system but I would like to humbly add some fuel to this discussion. Are any of you familiar with the Herstatt risk? Please check out the latest research done by International Monitoring.

http://www.intl-monitoring.com/banking.htm

There is a brief excerpt as well as a 44-page .pdf file that intricately analyzes banking risk and the compounded effects of Y2K.

I have found myself particularly wary of the "banks are y2k ready" talk and I think this article points out some serious kinks in the international banking armor.

Regards,

-- devVB (devvisualbasic@aol.com), October 04, 1999.

The original American concept of the "social compact" was not one of putting aside one's own interest for the greater good. It was an equitable compact where everyone agreed to surrender only a small portion of their individual alienable rights - That right to individually judge and take action against someone who injured their health, safety, peace or property. Only the amount absolutely necssary for the greater good is surrendered. All else is retained by the individual.

In exchange for this individual surrender, a formal institution of "law" and civil government was errected to provide the same functions and purposes. We are a society under the rule of "law" and not men. The bargain to the individual was that in surrendering his individual alienable right, he obtained greater security of his health, safety peace and property. The "bargain" is an equitable one. Should society require an inordinate burden be placed on one for the greater good - such as a "taking" of private property, "equity" demands an equivalent of "just compensation" to restore the equitable balance.

Your statement is more in tuned with the European form of social democracy, which is much different than ours.

-- marsh (armstrng@sisqtel.net), October 04, 1999.

For the same reason nobody mentions the stock market mania going on now. We want to believe that we can become rich quickly. Having the dollar disconnected from the price of gold gave the people in power an ability to create wealth by printing paper. Money has no intrinsic value. We receive goods for money only because people believe it has value. Just as people believe they are wealthy because of the value of their stock portfolio. Stocks have no value until you sell them and purchase something physical. But to sell your stocks you will collapse the market and have very little wealth. By taking money out of the banking system you will collapse it. That is bankings dirty little secret. We will pay very little interest because we allow you to take out your money anytime that you want. But if too many of you want to do this at the same time we can't, because we have lent out your money to others hoping that too many of you won't come asking for it. That way we can make a lot of money for ourselves. There will be bank defaults just as the stock market will also collapse shortly. You cannot create wealth out of nothing and think that this illusion will last forever.

-- Harold Bihun (bihun@mb.sympatico.ca), November 26, 1999.