The Continuing Crisis in the New World Order

Jacob Steelman
Lew Rockwell

The crisis continues in the new world financial order with no end in sight and no real solution being put forth. Ben Bernanke, the head of America’s central bank, admitted as much in comments before Congressional committees last week. Austrian economists, investors and analysts have been saying this since before and after the global financial crisis hit the world in mid-2007. More government regulation and more fiat currency will not fix what ails the world economy notwithstanding any of Bernanke’s comments to the contrary.

“We are ready and will act if the economy does not continue to improve, if we don’t see the kind of improvement in the labor market that we are hoping for and expecting.” Bernanke said in comments before the Financial Services Committee of the United States House of Representatives. This comes as concern continues in the halls of Congress of a Democratic bloodbath in November’s mid-term elections. The politicians are not concerned about the world economy and its impact on consumers and investors. The politicians and their staffs are concerned about their jobs, power and influence as unemployment continues to remain at 9.5% (using a broader government index the rate is 16.5%), the housing industry remains in a slump, the economy slows and fears of a double-dip recession accelerate notwithstanding the Federal Reserve and US government having spent $3.7 Trillion since July 1, 2009. Some international politicians have already been shown the door for their inability to handle the global financial crisis. Gordon Brown in the UK and Kevin Rudd in Australia are two major examples and the off-year elections in America indicate no better fate for many Democrats in Congress come November. Various governments in Europe are also under threat as the crisis spreads to governments which are effectively insolvent.

The GFC is a crisis in the ruling elites’ government-run and -supported financial system which threatens the world economy but it is not a crisis of the free market as so many pundits in the media suggest in their effort to place the blame other than where it belongs – government warfare and welfare expenditures, taxation and intervention in the financial system through central banks and fractional reserve banking. After having created and spent trillions of fiat dollars, pounds, euros and yen on bailouts, nationalizations and stimuli it still has not worked. Bernanke’s only tired solution is more of the same. The market wants a correction of the malinvestments caused by the excessive debt and spending which caused the problem in the first place. This is why unemployment remains high, the recovery is very slow and the threat of a double-dip recession looms on the horizon.