POSITION #18 - 18 August 2007 the.buggers@sea-urchin.net

Normally speaking we would not give a rat's arse about the current bank crisis. Let banks sort out their own mess. We don't care for their dog-eat-dog world. But there are a couple of aspects of the current bank crisis which make it even more unsavoury than usual. In the first place, of course, the fact that the crisis has its origin in rip-offs of people who have next to nothing. The subprime mortgages given out by American banks, which lie at the root of the crisis, cheat people without means out of what income and possessions they have. First the banks take their money through high interest rates and then, when the money has gone, they take possession of their homes. As long as the prices of houses are on the rise, there is no risk involved for the mortgager: the lender ends up with the borrower's money and house, which by then is worth more than the value it has been mortgaged for. That is why subprime mortgages have always been lucrative deals for lenders. And that is how unscrupulous businessmen like Roland Arnall have made a fortune. A fortune that enabled him to buy himself the position of US ambassador of The Netherlands on the one hand and to buy off criminal prosecution on the other. A rat like that ought to have a price put on his head, or arse, if you think that part of the body will make a better investment.

A consequence of the subprime mortgages is that people are either forced to sell their homes at relatively low prices or that banks take possession of them and auction them. This rising amount of relatively cheap houses unsettled the already inflated housing market in the USA. When a couple of years ago the US housing market collapsed and the value of houses dropped, a crisis began to take shape. Subprime mortgages no longer guaranteed profit for the mortgagers, debts turned bad. Big banks and wholesale lenders had bought the debts from mortgagers when they were still considered profitable, repackaged them and sold them to Wall Street firms. These Wall Street banks and investment companies had further repackaged these debts and sold them to pension funds, hedge funds and institutions all over the world. So, once the debts of people with low incomes in the US had turned bad, the system was infected on a global scale. Some banks and funds suddenly faced huge financial losses, others became distrustful of making investments or granting loans to fellow-banks and funds. What is called a "credit crunch" is actually a flare of paranoia all around the dog-eat-dog world. Paranoia is inherent to this world. But it is ironical that failed rip-offs of the poor should kindle it. There is a sense of justice in this backfire. It is a cliché but in this case an appropriate one: "Dog" spelled backwards reads "God".

The past few weeks central banks all around the world have injected huge sums of money into the financial world to ease the paranoia. With private banks distrustful of one another and unwilling to make investments or give out loans - except against high interest rates - the financial crisis was beginning to spread to other areas of the economy: the shares of companies that do business with borrowed money dropped in value and stock markets around the world plunged. Today the Federal Reserve, the central bank of the USA, announced that it has lowered its interest rate with 0,5 percent. No doubt, other central banks will soon follow. Now when central banks start to intervene, the public should be wary. Central banks, the monetary institutes of our governments, can only produce money and grant loans at low interest rates at the cost of inflation. Thus, the trick by which the financial losses of mortgage banks and investors are being compensated by their big brothers, the central banks, is called INFLATION: they simply decrease the value of our money. In the end the bugger in the street will pay the bill. Fuck a duck! There is no god after all. There are only dogs and rats.

Also see: * MISSED ENCOUNTERS * The Buggers realise fictitious encounters between revolutionaries, artists, musicians, and freaks. Finally they meet!
<< position #17 pamphlets home >>