There is a major cover up as to what started the economic collapse.

[Lint Head]

Lower income people are being blamed by the GOP for the economic disaster.
The Re-Pubic-Rats say poor and lower middle class people get loans from the bank they cannot pay back.
Predatory lending is never mentioned.

There is a major 'cover up' as to what started the economic collapse.

It's OIL Prices folks. Nothing was truly in peril until the oil prices were manipulated by the international hedge fund criminals.
Of course there was and always has been the usual wall street fraud.

Until the specifics of the secret meetings Cheney had with the oil barons is released this is a major cover up.

The Banks did not start this. World wide oil pricing did. That is a FACT! The time line is easy to follow. It is a cover up because the Saudis are involved and the truth would cause an international incident that could lead to more war.

Everything depends on oil. Fuel for cars, trucks, trains, airplanes and is even in the manufacturing of baby diapers.
Have you asked your local grocer why prices went up when the gas prices went up but have not gone down when the gas prices went down?
We are being hoodwinked by professional propaganda experts. We are considered boobs.

I hope my President Barack Hussein Obama will see the light and do something about this cover up.

http://www.dailymail.co.uk/news/article-1144999/Oil-companies-accused-profiteering-pump-prices-continue-creep-up.html

[thunder rising]

1. Wait, I'm confused, I thought it was unions and single moms with 14 kids ...

[merh]

2. Of course it was oil

that is why the prices dropped so drastically, without explanation - they tried to correct the problem but they were too late.

The "ripple effect" had begun and it couldn't be stopped, each ripple joined to form waves that overtook our economy - we were sunk.

Years ago many of us took part in discussions about the "new world order", those forces that wanted to take over the economies of the world - I naively believed that they wouldn't be successful because they knew they couldn't destroy the host - they knew they couldn't afford to cripple the USofA.

Greed is like drinking salt water, the more you drink it, the thirstier you become, you are never satisfied.

[dkf]

3. If you had read up on peak oil you wouldn't think it was a scam.

It just overshot on the upside and now on the downside.

If you think we will be at this price forever, think again. One day we'll be back up to where we were or higher.

[Lint Head]

4. I agree it will be higher. The issue is that basically oil prices

doubled and almost tripled in one year.
:dem:

[dkf]

9. We thought demand would outstrip supply.

The market was testing the price point at which people would start using less gas and we definitely found it bigtime.

And if the world is no longer producing as much goods, then less energy is used to produce those goods, ergo even less demand.

Seems like this will not be a nice easy progression but will be very volatile on the up and down side.

[Hannah Bell]

35. It's a scam, & what you call "overshoot" is the evidence.

Peak oil, schmeak oil, nothing to do with 300% price increases in a couple of months when 1/2 the oil is still in the ground.

If you'd followed the actual useage during the period, in no way did it account for the prices - & the same with all commodities. Remember "peak rice"?

Some DU-ers are still eating from their 60-# bags.

[Historic NY]

5. Yup it started with that kiss.

[cliffordu]

6. I noticed an odd correlation between the 'collapse' and the rise in gas prices

all last year.

[lifesbeautifulmagic]

7. i absolutely believe that oil prices had a lot more to do with it

than will ever get mentioned in the MSM. You simply cannot drive the price of gas up to over $4.00 a gallon, and not have the effects ripple through the country. When it goes from $25 to $75 to fill the tank, that is $50 not spent at Target, SBUX, Rite Aid or whomever. Times that by the millions of consumers out there, and no one can tell me it did not make a huge difference. It was a downward spiral of (not) spending, if that makes any sense. Once people figured out they could do without a triple carmel machioto on the way the mall, why should the spending start up again once the price of gas comes down. Add the price of gas to resetting mortgages, and the layoffs start - and won't even get into the food inflation I have been seeing, that the media seems to ignore as well.


The delusions the repukes have about this is amusing, in a sick way. It is kind of like the reasoning they have that it is ok to 'HAVE THE BIGGEST SPENDING BILL EVER" as long as we are bombing and invading another country, but not to spend the money in America building our roads and our schools and our bridges.

And they say the stimulus will not work, all while ignoring the fact that the " BIGGEST SPENDING BILL EVER " for our occupation of Iraq has done nothing to make this country safer, and quite possible will make the country unsafer, time will tell.

But back to your original point, the no matter what the denial, the oil prices certainly did play a major part of this meltdown.

[truedelphi]

24. What you are saying is so true.

people looking for work couldn't rely on part time jobs, as they might have in the past, because with the cost of gas, youneeded full time work to justify the commute.

And also the Repugs HATE subsidizing spending on transportation. Which strikes me as so stupid. Really stupid!

[UpInArms]

8. The subprime mortgage collapse for dummies

http://denisbider.blogspot.com/2008/04/subprime-mortgage-collapse-for-dummies.html

For all the hoopla about subprime mortgage woes, the media do a fairly bad job of explaining how this problem could even come about in the first place. These are complex phenomena that can be difficult to interpret, because they're so large that it's difficult to see the whole thing. It has taken me until recently to connect the dots and figure out to my satisfaction why it happened.

First, the core problem of the subprime mortgages is that many - many... many - U.S. mortgages were given away to people with incomes too low to repay them in the long run. The loans were made, however, because the people were able to pay them in the short run.

The reason why people were able to pay these loans in the short run were two-fold. First, some loan-givers offered introductory low rates that may have actually been loss-leaders. Second, interest rates throughout the U.S. economy were low.

Interest rates across the economy are determined by the central bank. In the case of the United States, the Federal Reserve was keeping interest rates low to stimulate the economy after the collapse of the Internet bubble, and especially after the September 11 attacks. When interest rates are low, businesses and individuals find it cheap to borrow money, but not very rewarding to save it. Therefore spending on consumption goes up, and spending on investment goes down. The Federal Reserve wanted this effect, because they feared that after September 11, everyone might stop their consumption in anticipation of possible worse attacks to come. If consumption did actually stop, this would produce huge problems in the economy, as all the infrastructure that is currently geared for a certain level of consumption and a certain level of investment would have to be re-geared for a different ratio of consumption vs. investment. If any such re-gearing took place, it would take the form of a severe depression, which the Federal Reserve wanted to avoid. The chances of everyone stopping their consumption out of fear of more terrorist attacks were low; however, there was a chance nevertheless, and the Federal Reserve felt that this was a good enough reason to keep interest rates low.

Now, because interest rates in general were low, interest rates for mortgages were also low. Add to that any loss leader discounts that may have been offered by lenders, and all of a sudden it turns out that people could borrow sums of money that they previously weren't able to afford. Not only that, but most people's willingness to buy a house depends not on the actual price of the house, but on the size of the monthly mortgage payment relative to their income. Since interest rates were exceedingly low, so were the monthly mortgage payments, and lots of people piled in to take advantage - maybe thinking that by the time they pay off their mortgage, real estate is going to appreciate even more, and they are going to be rich!

Now, this state of affairs was bound to change over time. Interest rates were bound to go up much sooner than most people were going to repay their mortgage. First, after an initial few years, any loss-leading interest rates that may have been in place were scheduled to be restored to an economically sensible - that is, higher - level. Second, the Federal Reserve was bound to stop being so concerned about boosting people's consumption, and to raise interest rates in the overall economy. For people who go for an adjustable-rate mortage, their monthly payments are going to vary in size depending on prevailing interest rates in the economy.

So, the interest rates were bound to go up. Meanwhile, lots of these loans were made to financially uneducated people who could never afford the increased payments, but they signed up for the mortgage anyway, because the agent encouraged them that "surely after a few years you will get a raise".

But, what made these agents want so desperately to sell these mortgages to people who could not afford them?

First, the companies who made the loans did not keep them. Instead of being responsible for each mortgage throughout its lifetime, the companies who made these loans instead resold them to other investors - hedge funds, banks - under a recently invented, much championed concept called Collateralized Debt Obligations (CDO). So the people who made the loans were only exposed to risk until they were able to resell the hot potatoes to someone else, and the risk was small in the initial period, because the monthly mortgage payments were still low at that time to begin with.

The second reason why the agents were selling these mortgages is because normally, if a person can't pay their mortgage, this shouldn't be a big problem for the lender. If you miss enough of your payments, the lender comes in, takes the property, and sells it to someone else, recovering their investment. They might take a loss because this process is not usually very efficient, but the whole idea is that the loan is secured against the property, so the lender can give you the loan to begin with, resting securely in the knowledge that they can come in and take the property if you default.

And normally, all of this wouldn't be a problem, if it wasn't for the fact that this lending to people who couldn't really afford it was done not just by one or two lenders, but was instead a widespread fashion that took place over a period of several years. For reasons I'll explain below, investors were actually willing to buy these CDOs, so it made a lot of sense for lenders to make money by relaxing their standards of lending. What else are you going to do, ignore the opportunity while your competitors make a killing? You do that and you're going to be replaced with someone who's going to do the job.

Thus, people were able to buy houses who otherwise could not have, entering the real estate market. Additionally, those who already could buy property, could now buy bigger and more expensive property. Demand grew larger for the same amount of real estate, which means that prices grew fast.

...much much more at link...

[dkf]

11. They did a really good piece on it at CNBC..."House of Cards"

The problem was the subprime mentality extended towards all real estate loans. By that I mean overloaning to everybody.

Basically you could get whatever sized loan you wanted because they were counting on being able to sell the danged place, not on borrowers being able to pay for it.

They had some guy who said he based everything on the fact that real estate hadn't gone down in an entire year since the great depression. That idiot should have taken a look at Japan or at Hawaii during the '80s.

[SoCalDem]

21. We can thank Andrea Mitchell's hubby... and of course GWB, too

By 2002-03, the ONLY thing "holding the economy together" was low-low interest rates and the "hosuing market"..Build a steady stream of Mcmansions, and you gotta have SOMEBODY "buying" them.. In order to GET people to "buy" them, interest rates MUST be inordinately LOW, and almost EVERYONE must be able to "qualify", or the whole thing would have copllapsed back then..

It was no accident that Greenspan suddenly quit, when he did.. he KNEW the whole thing as about to collapse, and he wanted it to happen on someone else's watch.

Our youngest son has FOUR young friends who "bought" dream houses during that period..NONE OF THEM COULD REALLY AFFORD WHAT THEY "BOUGHT",and of course they have all "lost" those houses by now, and have moved back in with their parents..

There was a "money-honey" on the air back then, who actually said this: ..."People earning less than $40K a year, really should not be looking at houses that cost more than $450K..."...as IF a person EARNING $40K a year could afford a house costing $400K...:grr:..

Then the Wharton Whiz Kid "traders", went nuts with the oil futures trading, and that may have been the match that lit the whole mess on fire..

Futures trading is all about jacking UP prices..not about securing a steady supply (as it once was)..and the ones DOING it, have no intention of EVER actually taking possession of what they "bought".. They are just commodity-flippers, and their only reason to exist, is to pocket huge sums of cash, as they manipulate prices that the rest of us have to pay.

[malaise]

28. That article explains it well but misses the most important

factor that facilitated that mess.
-------------------------
Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html

[IDemo]

10. I taped that photo to a gas pump during the $4.00 gas era

[CrispyQ]

15. Good one!

If that had been a dem president our media would have plastered it on every show 24x7 for weeks on end.

[smoogatz]

12. Two different crises. Three, really.

First, there's the banking credit/solvency crisis that was, in part, triggered by the real estate bubble. You have banks all over the world buying shares of bundled mortgages as a hedge against other kinds of investment risk. As a hedge, right? Those shares of bundled mortgages (mortgage backed assets) appear on their balance sheets in the "plus" column: tens of trillions of dollars' worth, worldwide. Turns out, though, that maybe as much as 30% of those bundled mortgages are either in default or underwater--the mortgage is bigger than the property value. Trouble is, nobody knows which ones, or how many are held by which banks, because of the way they're bundled and then the bundles are sliced and diced. A few smart guys on Wall Street realize that a hell of a lot of banks' balance sheets must be, in fact, fraudulent--there's no way they have enough assets to cover their combined liabilities. Trouble is, without looking at the books, you can't tell which banks are solvent and which are on the verge of collapse, so as word gets out, all the banks stop lending to each other. A huge problem: without interbank lending, commerce basically grinds to a halt.

Second, there's the consumer solvency crisis--and here's where the price of oil plays a part. Most Americans have way more debt than savings--but that's okay as long as the interest on the debt is low, you have a job and you're building equity in your home. Basically you're walking the razor's edge between solvency and insolvency, and tens of millions of Americans have done exactly that year in, year out for a generation now. But if any of the legs of the stool get pulled out--jobs, cheap revolving credit or property values--there's a good chance the stool will collapse. In the current crisis, all three were pulled out at more or less the same time: the real estate bubble (inevitably) popped, cheap consumer credit disappeared, and consequently the retail economy slowed way down and jobs are disappearing across many sectors of the economy. The recent high price of oil was another factor, though not the biggest one by any means, in the increase in consumer insolvency--just another shock to the average consumer's personal economy.

Who's to blame? Greedy lenders who lured people into the housing market who had no business being there; banking fraudsters who padded their bottom lines with worthless "assets," Alan Greenspan and George Bush for cheerleading the whole mess and misleading the American people into believing that "innovation" in the financial and real estate markets were a workable substitute for, you know, making stuff, the credulous media for believing any of it, and the millions of Americans who were dumb enough to vote for Bush in the first place.

[TwixVoy]

13. Wrong

All it did was prove that so many people were living so close to the edge that a relatively small increase (compared to the amount people have in take home pay) in the price per month of gasoline pushed them over the edge.

I fill up about 5 times per month. I would say that may be typical for most people who didn't buy a Hummer (in which case they got what they asked for)

Let's say right now fuel is $2/gal and it takes me 15 gallons to fill up. That is $150 monthly.

Let's say gas went up to $5/gal. That is $375/month. Does that suck? Yes. But that is $225 extra a month for how long did it last? Six months?

If an extra expense of $225 per month for six months is enough to push so many people over the edge that says a TON about just how many people are living pay check to pay check and making payments they can barely afford to begin with.

It wasn't high gas prices that causes this. It was high gas prices that demonstrated how close to the edge so many people were living.

[Bluenorthwest]

37. Five fill ups a month!!?

I have never in my life used that much gas and I used to live in Los Angeles. I now fill up once a month, 12 gallons or less. Five? Wow.
I'd add that while gas prices went up, so did the price of everything else, including food. So your formula about a rise in gas prices being all that...sorry. Everything went up at once. Forget you and me. Think "11 dollars an hour", and then look up the price of housing at the lower level, and tell me how most people could provide more of a cushion for themselves? They are not 'making payments' of any kind past essentials. They live paycheck to paycheck due to miserly paychecks, not due to over spending.11 an hour = 1760 a month. Less rent, taxes, food, heatlh care, car insurance, utilities...explain where you would be cutting back.
Your $225 figure comes to $1350 in 6 months, which is one month's take home pay for many workers. Could you add, without warning, an expense totaling one month's income every 6 months and be fine? If so, good for you.

[KharmaTrain]

38. Welcome To DU...It Was The "Ripple"

You are spot on about the effects the sharp rise in oil prices last year was the straw that tore this economy down. It was like a massive tax increase on everyone, especially the lower and middle class. And that price rise rippled and is still rippling across the economy. Anything and everything that was manufactured or shipped over the past 6 months bear those costs...prices for food, in specific, have risen dramatically and few have come back down. Yep...for those who were just getting by, this huge expense, not just in driving, but in virtually everything they bought took money away from paying re-set mortgage rates or to pay more than the monthly minimum on the card (then seeing rates shoot up 100% or higher on those rates). The end result was the collapse of the real estate market and the destruction of the credit market that has all but paralyzed this economy.

[unblock]

14. i disagree. that was merely one symptom of more systemic dysfunctions in our economy

moreover, the runup last year really heated up well after the credit crunch stated and even after we were already in recession.

of course, sustained oil prices since at least the iraq war started and actually for the bulk of shrub's presidency didn't help matters.

but the real problem, to the extent it can be condensed down to a single cause, was that everybody (individuals, corporations, and bank) all got overextended and the result was inevitable. exactly how it played out might have been different, but eventually everyone would have needed to tighten up so a contraction was inevitable.

[Festivito]

16. My take: The April 2004 SEC decision unbridling banks.

Instead of lending 10 dollars to every 1 dollar in the vault, they could lend as much as they wanted, creating a hundred million for every million they had. And they started with billions.

Putting those hundred millions to work was hard work. But, the more they sold, the more commission they made and the greater their holdings and status.

Plus they could take the good stocks out of retirement plans and replace it with the money they created. Yumm. Now they get to own the property the people once owned. Fantastic.

How much did they create? 6.9T$ was an estimate of late, and that JUST HAPPENS to be a 10 to 1 ration to the $700B$ they needed in order to make things happy again. Back to 10 to 1 with the taxpayer footing the seed money. Smarmily brilliant.

[Octafish]

17. That's the Corporate McPravda Sideshow. Reality: The Nation's Wealthiest have OFFSHORED the LOOT.

Since Pruneface Reagan, kkkonservative fiscal policy has been huge tax cuts for rich and hog-wild military spending on their corporations. Their accumulated loot has been moved through the Caymans to Switzerland. Remember Smirko's political capital going toward piratizing Social Security in January 2005? That was about the only money left. Today's story about the bank bailout is bogus, a way for the BFEE to rip us off again, for old time's sake. All We the People got is the IOUs on their bad debt.

[bertman]

27. Gotta go along with Octafish on this one. The uber rich are feelin' pretty happy about now.

[DearAbby]

18. Oil certainly was a big contributing factor

I keep getting this thought in my head, mind ya I am no kreskin, but I get the feeling this was all planned to crash our economy.

What if it were known on the "inside" the time towards the end of B* term, they would request and receive money for these "bad loans"

Then these loans would be better than money, they would be very valuable for a time. Sell them from one bank to the other, over and over...Knowing these loans will be backed by taxpayers.

Just another way to funnel the money from you and me, to breakdown our economy. Enough time passes, the people will be drooling for a new form of economy, a continent based economy. simular to the Euro.

[lifesbeautifulmagic]

19. another way to ask it is,

if oil had not gone up over $4.00 a gallon with the resulting inflation in not only basic transportation, and everything else (mainly food), would the population have had an easier time paying the higher reset mortgages, and credit card bills? I'm betting yes.

I don't think it was the only reason, but it played a part, no doubt about it.

[NashVegas]

20. The Reagan Administration Started It

With all their merger-friendly deregulation + neo-con friendly, Soviet-style specialization.

The ultimate result was our huge-ass multinational corporations that swallowed everything in sight so they could "compete in the global marketplace."

Add to that all the hyper-specialization of the last 15-20 years that leads to rigid, inflexible methods, including those at the top, who were too busy enjoying power lunches to see the groundswell beneath them.

[Still Sensible]

22. Oil has been a manipulated commodity for decades

and will continue to be so long as the supply in concentrated in so few hands. And while the oil barons took advantage of certain eventualities in the building economic crisis, they are not the cause.

The economic disaster was caused by the greed of big banks, credit card companies and mortgage firms. They had run out of ways to generate growth, which is what makes stocks soar. So, with deregulation they invented new ways to make money. The lack of regulation allowed them to come up with ARM schemes that allowed them to aggressively market to people that shouldn't have qualified. It allowed them to extend credit cards to people without qualifying. All so they would have new streams of revenue. And then they tightened the bankruptcy laws to protect them against the increased default rate they knew would come (and had built into their business models).

And then the coup de gras... They invented and started selling and reselling derivatives--bundles of debt that simply created more middlemen with everybody participating virtually creating (phony) value out of thin air! And leaving multiple entities ultimately claiming value from the same paper. In many cases now, you can't even trace the trail of toxic trades far enough to get you hands on an original mortgage note!

Make no mistake, the oil barons are despicable assholes, but they were too busy doing their usual market-manipulating to help the bankers and Wall St., who with mostly republican legislative help, created the bubble, the bust and the financial mess we now face.

[bvar22]

23. I believe the trigger was Katrina.

I owned property in New Orleans, and went there shortly after the storm.
My property was only mildly damaged (western suburbs).

I contacted a Realtor from a major agency to discuss prices. When she came out to the property, she was much more interested in the pre-storm appraisal than the actual condition of the house. She had a binder full of pictures of houses, and she would point to the picture of a house and tell me what it was worth. It made no difference to her that the picture she was pointing to was of a house that was destroyed. She told me that the pre-storm appraisals set the value of the property because THAT was what THE BANKS said they were worth.

I realized then (2005) that The Banks were holding tons of worthless paper...several square miles of worthless mortgages. I believed at that time that the crisis would be contained to the Gulf Coast. Never-the-Less, it scared me enough to cash out, move to The Woods, and plant a garden.

[Ilsa]

25. Yeah, the oil price "crisis" screwed the automakers. They should

have adjusted sooner, but the international hedge funds screwed them on a short term basis. And the rest of us got screwed also.

[malaise]

26. Sorry I'm going with Spitzer on this one

Check the date. 14th February 2008
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html

[Occam Bandage]

29. Not so much, but admirable in consistency.

Why bother thinking of new scapegoats when last year's will do?

[Holly_Hobby]

30. Here's my theory:

It's counterfeit fiat currency. A giant pyramid scheme. It has become too expensive to maintain.

[snot]

31. Um, no, this post is scary. It was the DERIVATIVES.

True, the bad mortgages are a small fraction of the problem.

Oil didn't help, but it wasn't the biggest part -- though it will play an impt. role soon.

The biggest part of the problem by far: the credit derivatives. They account for 90% or more of the current catastrophe. There have been lots of DU posts illuminating this. Sorry, it's not a totally simple subject. Here's some info, not the only or best, but may be helpful, esp. if you follow the links: http://c-cyte.blogspot.com/search?q=derivatives

[JHB]

40. Bingo...

There just aren't enough bad loans to account for the whole mess... but when you start using the loans as gambling chits...then do a "Producers" and use them as markers for a dozen gambles at once... and so on... then you have this ocean of vaporware debt, and none of the players want to be left holding the bag.

[Kablooie]

32. You're all wrong. It started when God said, "let there be light".

So there!

[GeorgeGist]

33. There is no cover-up ...

it just people like you, and Obama, who are apparently blind to the obvious: profit = theft.

[Hubert Flottz]

34. "even in the manufacturing of baby diapers."

I'll bet Dave Vitter is about broke! And I know he's as full of shit as his pampers!

[HamdenRice]

36. THANK YOU FOR SAYING THIS. It should be obvious but is rarely mentioned

Most families' budgets allow for very little wiggle room. Many people took out mortgages with a set of assumptions about how much they would spend on the mortgage, food, oil/gas, etc.

Then energy prices tripled or quadrupled -- and those costs filtered through the entire economy in an energy inflation of 2007-2008.

Of course, people fell behind and defaulted.

I'm amazed that this isn't discussed more in the mainstream or alternative media. The energy inflation of the last few years -- without any corresponding increase in wages -- was the root cause of both the mortgage crisis and the recession.

[whosinpower]

39. I have a different theory

It is the Iraq War stupid. It is the war that caused this whole thing to collapse. Thus far, the war cost America over 1 trillion dollars - that they(the government) had to somehow borrow from someone, or create out of thin air.
Bushco did not go to the taxpayer for this money - no.....he CUT taxes - another estimated cost to the Government to the tune of almost 2 trillion dollars.

The Iraq war had once immediate consequence in regards to oil - the supply of oil from the Iraq oilfields slowed to a trickle - prices began to inflate - due to demand being higher than supply we were told. I believe at that time, speculation greatly enhanced the price of oil - and it peaked at $145/barrel - brought on by a perception that $200/barrel oil was just around the corner. This is very good for the oil barons who were waiting to take over the Iraq oil fields and begin pumping.

How did Bush fund the war? Where did the money come from? In order for the US currency to encourage foreign investors, there has to be some way to ensure that the currency, or value of the dollar is stable, and that the US economy is sound and profitable. This is where the financial sector is so critical to your economy, because, as everyone has agreed - your manufacturing base has been gutted by free trade. You have a huge trade deficit, which means you import more than you export - America has an overal debt of over 40 trillion - so what could possibly keep your currency stable and be the global reserve currency? So.....the banksters basically sold out your mortgages abroad, telling investors that property was the best, safest investment in the world, that property values ALWAYS increase. This is for FOREIGN investments - and I firmly believe that if the Iraq war had never been initiated, the demand or need for Foreign investment would not of been as critical, that the oil prices would never have been speculated on such a scale....that the pressure on the US dollar would not have been so critical. That downward pressure on the dollar is immense, but somehow is being propped up.

As much as I think the Banksters were grossly wrong to do what they did - I think what has happened is merely a symptom of a far bigger problem. The Iraq war was the final straw.